Working Feverishly for Spray’s Approval

Aviron still has to untangle problems with federal regulators before it can market its promising nasal-spray influenza vaccine, FluMist. But the Mountain View, Calif., biotech company got a needed shot in the arm last week when it concluded a collaboration agreement with Wyeth Lederle Vaccines for distributing FluMist once it clears regulatory hurdles.

The deal could be worth as much as $400 million to Aviron during the next decade if the company reaches a number of milestones toward marketing the live vaccine. Once the company satisfies the Food and Drug Administration, the product is expected to win wide acceptance, especially among children and other injection-shy individuals--people who would rather risk the flu than be stuck with a needle.

Wyeth, part of American Home Products Corp. of Madison, N.J., is paying $15 million upfront for the exclusive right to market the vaccine outside the U.S., except for a handful of countries where Aviron has separate agreements. In the U.S., the two companies would both market the vaccine, sharing revenues under a formula that would bring royalties of 40% or more to Aviron. The agreement includes additional payments to Aviron if FluMist gains FDA approval and achieves other goals, such as a positive recommendation from the American Academy of Pediatrics.

Wyeth is one of three companies already producing influenza vaccine for use in the U.S., and its stature and sales force mean a lot to Aviron, which has yet to market a product.

News of the agreement prompted Morgan Stanley Dean Witter’s biotech analyst, Douglas D. Lind, to upgrade his view of the stock to a “strong buy.”

Last year, the FDA asked Aviron to do an additional study of FluMist after the company shifted the site for mixing the vaccine. The company expects to resubmit its application for approval this year.