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Here’s the entire text of the Q&A from Medimmune’s (ticker: MEDI) Q3 2005 conference call. The prepared remarks are here. We recognize that this transcript may contain inaccuracies - if you find any, please post a comment below and we’ll incorporate your corrections. And please note: this conference call transcript is a Seeking Alpha product, so feel free to link to it but reproduction is not permitted without the explicit permission of Seeking Alpha.

Question-and-Answer Session

Operator

Thank you sir, ladies and gentlemen.

OPERATOR INSTRUCTIONS. And your first question come from Ian Somaiya, with Thomas Weisel Partners.

Ian Somaiya

If you allow, I thanks for taking my question. Just a question on that inventory, How do you plan to manage inventory allow wholesalers transition to the liquid similar? Should we expect any write-downs for the life like products?

Armando Anido

Yeah, this is Armando, we are actually working very closely with wholesalers distributors right now and taking a look at their inventory and trying to work down the line, by authorized material is, rapidly as you can get out to physicians offices and hospitals and as that starts going down, we will start back filling in with the liquid product and that should be occurring sometime probably over the next few weeks.

Ian Somaiya

Okay thanks.

Operator

And your next question will from Jeff Roger with Stanford Bear Stearns.

Jeff Roger

My question is about FluMist. It looks as though the cost of goods is about 100% there and I just wondered if you could tell little about the future first of all David, if you could not expand the labels for 0 to 5 year old, would you terminate the product or out-licensing or selling it, and if that occurred, could you talk a little about how about would effect SG&A and other expenses going forward? Thanks.

David Mott

Yes Jeff, this is Dave, we’ve pretty consistently said that our strategy with FluMist CAIV-T is to develop it as a differentiated Flu Vaccine. Particularly one preferred by Pediatricians, our hope is that, we can demonstrate that in the head-to-head comparative study that we planned, to un-blind sometime in the fourth quarter of this year. If it merely ended up being a nose spray Flu Vaccine with no other differentiation then that frankly is less strategically interesting in our portfolio and while we’ve said, over the past conference call and we discuss this is it, If that were the outcomes and we would out licensing or selling the asset. You asked, today whether if we couldn’t expand the label to include kids under five, whether we would also considered that, the answer to that would be, yes we would, and we’ve also in the past indicated that the estimate that we have to a spending something on the order over $100 million a year right now to support the Flu infrastructure that in our manufacturing activities as well as the commercial activities in that business, so where we to exit it, you could do the calculations on that.

Jeff Rogers

Thanks very much.

Operator

And your next question will come Lee Young, with Banc of America.

Lee Young

Thanks for taking my question, the rest of the Synagis, is that a fewer fluctuations in stocking or does it tell you a stronger in RSV season in a south hemisphere and if so, would that be the indicator for the stronger season in the domestic market?

Armando Anido

This Armando Lee and actually we don’t sell that much in the southern hemisphere, this particular point our Abbott international does not sell, it’s actually primarily that they are improving their inventories in anticipation of continued strong growth in the rest of the world, where they are.

Lee Young

Thank you.

Operator

And your next question will come from Joel Sendek, with Lazard Capital Market.

Joel Sendek

Hi thanks, I have the question for load on that $360 million intangible asset, can you just tell over again the amortizations schedule specifically in how many years, could you significant amount hope on that?

Lota Zoth

I am sure we have suggested that we would anticipate the launch of Numax for the 2008, 2009 season. And I suspect that launch to be probably a little bit similar to the launch of liquid Synagis this year and that we would ensure that we had a, well I would call the soft launch and so we would expect have may be some Synagis sales in that season and as I mentioned before we has set our amortization schedule such that, until we actively stop, actively marketing and selling Synagis that’s, we estimated our amortization to run over that time period, so we basically up to sometime during that 2008, 2009 season.

Joel Sendek

This straight line?

Lota Zoth

No its proportion to Synagis sales.

Joel Sendek

Okay Thank you.

Operator

And your next question will come from Craig Parker with Lehman Brothers.

Craig Parker

Good morning, I mean you clearly have to be much more obnoxious because (4640). A question on the CAIV-T, phase III trial, have you told us what differences in effectiveness to study with power detect overall in the study from Matched strains and for mismatched, I can’t understand, will you?

Edward Connor

Yeah this Ed, the primary end point for the trail is comparison of CAIV-T and TIV full match strength, the secondary endpoint look at mismatch strains. And we are looking at, it depends on what the sample size assumptions that review to generate, those assumptions, look at ranges of improvement around 34%, so we look at a bunch of different ranges and pick a size that is going approximately give a reasonable cover to look at differences that occurred in previous trials. Obliviously that’s also depended on what the actual rates are, and influence in any of the age of the treating groups.

Craig Parker

But, obliviously we are overall better than 90% effectiveness between the two groups on average, so I mean that difference kind of 70 versus 90 is that kind of how you are going to be thinking about it? 70% effectiveness in the TIV on 90% in the CAIV-T, which would roughly get you there?

Edward Connor

While just the way we look at it is, given our experience with Placebo control trials with FluMist and CAIV-T where we’ve seen between 80 and 95% efficacy, that’s where our assumption is and then back down from their 30% better then CAIV-T and you can start to see where we are expecting the results to come out.

Craig Parker

Okay, thank you

Operator

And your next question will come from Elise Wang, with Citi Group. Please proceed.

Elise Wang

Hi thank you to take my question, just on to dig a clarification given the stocking that’s occurred, via Abbott for international market, how should we be thinking about the fourth quarter than if you are doing the stocking now has the potential impact on their buying patterns for the fourth quarter and then if you can just comment on what the CAIV-T cost of goods, would be relative to implement?

Lota Zoth

I surely all I will try to help you with both of those questions, I think with respect to the stocking, I think the difference between last year and this year is a really a second quarter, third quarter, climbing and as for as we know we would expect this fourth quarter to be somewhat comparable to last year. So, I think it’s really if we try to describe it in the second quarter as well as now, it’s just a year-over-year comparisons between those two quarters, with respect to the CAIV-T cost of goods sold, obliviously, we continue to work towards making manufacturing improvements that we will reduce our cost of good sold, I think we even articulated that we had some impact that even in this season. But, what we historically said is that, we do believe that there would be, our fixed production cost would remain basically the same as they are today but our variable cost might rush it up just may be a $1 or so those of CAIV-T. But again we continue try to, reduce the overall cost to goods sold for Flumist or CAIV-T.

Elise Wang

Okay, thank you.

Operator

And your next question will come from Mark Schoenebaum, with Bear Stearns. Please proceed.

Mark Schoenebaum

Hi every body thanks for taking my question. Just enough to one more question on CAIV-T on the trial, could you help us understand as it related to prior question, can you help us understand when you are making your sort of go, no go decision whether or not you move forward in the CAIV-T and when you look at that the result from the trial period to find differentiated for us?

Edward Connor

I mean I can take a shot at, what I think is, obliviously what we have been looking at in the trial, as I mentioned before in the sample price calculations are based on a bunch of ranges down flow about 30% to above 30% and the sample size in the trial we believe, we will cover that appropriate range of showing that there is a medically important difference overall in benefit now we seen before in the two previous CAIV-T trails that why has it done. Ranges of benefit against match strength that were in the range of 30% to 50%. So, that obliviously the percent that show us what we might be able to see in these kinds of study.

Mark Schoenebaum

What is the mismatched, and miss the match 10 point hit the mismatched the 10 points?

Edward Connor

Yeah, I think is that, well we calculated everything on were based on the match strength, it is obliviously that scientifically powerful both logical primary endpoints. So, obliviously from a practitioner perspective, it’s the overall benefits of vaccination one vaccine over another that’s an ultimately drive the use of vaccine I think. So, we enter in both of those of things were important from a technical trial perspective, match strength of the primary endpoint from a practical perspective is the overall benefit of vaccination can be afford to that. I think we’ve to be careful when you said miss the primary influence with match strain, because the trial have certainly covered and the initial analysis for non-periodic, which we fully well to be extremely powered to be able to show, 99% power to show that. So, the question is that I think if we hit that non-periodic then, we will look at the mismatch data and if you see significant superiority there, is that formula for a differentiated product.

Mark Schoenebaum

Understood thanks a lot.

Edward Connor

You are welcome.

Operator

And your next question will come from Mack Tufee (ph) with Black Diamond Research. You may proceed.

Mack Tufee

Good morning and thanks for taking my talk. staphylococcal molecule I want you to give us some ideas in terms of time line and development goals and that one of you know précised to data and what your overall development goals for those molecule?.

Edward Connor

Now, I think the process now are obliviously doing with get transfer and associated with molecule and information that coming from GSK and previously from buyers were excess that, I think the next step for us to make from material for clinical trial and then to begin to look in phase II at optimal growth because of lot studies are with us so for obliviously provides some information about that but we need to go back and understand the optimal those thing for the molecule, and I don’t have, you may comment more about those?.

Armando Anido

For expectation is that will be in a position to make additional supply in 2006 and then be in a position to run the phase II trial. So hopefully we can get thru that and be in a position to follow on with the selection of the dose and moving into Phase III.

Mack Tufee

And then how about the I think is your previous phase II a trial that was on going we didn’t see data from that?

Edward Connor

The SGS, GSK already completed one phase II study when they look it several different doses and I think we need to refine that based on the Parma genetic data we obtained in that study.

Mack Tufee

Edward was asking we had a plan for publishing that data?.

Edward Connor

That data is currently being analyzed right now for final analysis, been underway to GSK, the transparent that data to us which final study reports to be done. And after that we would anticipate remaining to relevant needing for publication of those results probably sometime next year.

Mack Tufee

May be TIS next year something like that?

Edward Connor

I think that may a little tough makers be a stress aspect in line is the beginning of December 1st

Mack Tufee

Right, thanks very much.

Operator

And your next question will come from Steven Harr with Morgan Stanley.

Steven Harr

There is you see a lot of end license activity obliviously, a really stage drugs and you have a phase 3 activities that is coming to us next year, do you expect see any phase Q3 in licensing and what area did you target and how much that would cost? Going forward.

David Mott

Sure Steve its Dave, as it is serious has rather run before corporate development assumptions. So, we are not going to spend that properly comment on that. We as you know have been pretty consistent in our message that we are prepared to be patients and long-term in our focus, we are pretty and lyrical about how we evaluate these segment in this market place and frankly over the last several years we had found most later stage programs to be from our perspective over price, when they are available and we look at pretty much everything that moves on the horizon and put in the proposals on many of them, but if they over priced we prepare let them go and that’s why the majority of ours had been relatively early stage, we did acquire the Phase 2 program from GSK which we think as the essential move relatively quickly and we are currently looking at additional Phase 2 which and even later programs that are out there. But, they really have to be thanked that we were convinced our NTD positive and not over priced in the market place. So, we will keep poking around, looking for the things, we are prepared to be patient and analytical, our view is that we have a great commercial base in place now with our four marketing products, we are excited about the opportunity to re-launch any further formulation and expanded label and differentiated CAIV-T in the follow of ‘07, very optimistic that we could be in a position to launch Numax in ‘08 and then we’ve a number of Phase II programs now, with Vitaxin with the GSK molecule the IL-9 program moving forward. But, even frankly some earlier kind of program it could be quite the like the Interferon program that give us a number of shots on goal for the ‘09 or ‘10 or ‘11 windows to introduce some new products and then with in back filling beyond those with a dramatic increase in our earlier stage pipelines. I think in the last 12-months, we’ve licensing required a 11 new validated targets, for products development. Almost all of those being antibiotic targets and probably, half been oncology and then the remainder being flip between infectious disease and inflammatory disease. So, I think at this point over the last couple of years we really created a very balanced portfolio with the commercial product that late stage, R&D portfolio several mid stage product and our ability to hit that thru ‘09 to ‘11 kind of window and then a burdening portfolio to earlier stage opportunity. So, we don’t feel like we need to see over aggressive and over pay for late stage programs.

Operator

And your next question will come from May-Kin Ho, with Goldman Sachs. Please proceed.

May-Kin Ho

Hi, the question about CAIV-T and let’s assume that, in your study it turns out that indeed 30% or so better than the traditional vaccine, what are you thinking in terms of pricing strategy, in view of the improvement as well as the increasing prices of the traditional vaccine and tied to that question is how many doses you need to sell in order to break event?

Armando Anido

May-Kin this is Armando, I think that the 30% plus in improvement and efficacy comparable in terms of safety balance to safety, will allow us to maintain the price differential that we currently have at this particular point and we will hopefully, continue to see the growth in the price TIV pricing and with that we will continue to increase our price.

Edward Connor

You will remember making our strategies from the time we made the decision to bring this back from the way up and take a shot of ticking the product profile was to, initially doing during the CAIV-T developmental stage during the price down to that $16 a dose level and then gradually bring it up over time to level and we thought was the right place to be commercial when we had am improved product profile and that in the mid 20’s. And we are currently just under 20 years, we are moving towards that objective of bringing to back up there. So, we are right on that plans and we don’t see any meaningful change in if any CAIV-T is moved up to little faster then we expected which might give us little more upward potential there.

May-Kin Ho

So at mid 20’s how many doses you need to sell the break even?

Edward Connor

It’s in the depending on exactly high or low cost and all that in this 6 to 8 million dose range 6.5 to 8 million doses.

May-Kin Ho

Thank you.

David Mott

May-Kin has pointed that the actual calculated sample size as we when look at the trials and relative rate. Targeted at about 30% and we will look at everything up for about 50% the actual 7,000 patients would give us about a 95% powers are located attack rate, the attack rate was 4% and if the 40% with the rate of two different. So that gives you estimated current were we ended up with the numbers of total trial.

May-Kin Ho

So, actually 50% improvement would you price that higher?

David Mott

Let me wait and see, and go on to do some primary research when we have the actual product profile and then make decision off of data instead off conjuncture, I think that we’ve seen that movie before.

Operator

And your next question will come from Philip Nadeau, With Sg Cowen. Please proceed.

Philip Nadeau

Good morning thanks for taking my question another question CAIV-T said in your prepared remarks, you reference to what that the regulatory bodies would think in determining whether you going to keep CAIV-T or license it. We take from that you would be to secure superiority level for CAIV-T in order to consider differentiated product and what have you discussion with the regulatory bodies suggest this necessary data to secure superiority in level? Thanks.

David Mott

No we have actually made a quite clear all the way the along that we don’t expect that we would end up with a superior larger claim in the labeling for the product, that is sort of anti-public health message to actually efficient to declare products superior to the other products. Our expectation is that we be able to say that it was shown to be effective against these range and would actually had an economical trial section of our label, the data which would show that in this particular study is the superior against these strains, hopefully we will also have the data from the 5.14 and 5.15 studies conducted by YF, which also showed that was statistically and clinically superior to the vaccine and then in that body in evidence will enable recommending bodies which is obvious to decide what they think of the overall product profile. But, we do not expect actually had a label that would some stage that is superior versus the injectable vaccine. In fact the FDA told as that. You will get a superiority claim, in the label.

Philip Nadeau

So, would you need a superiority or differentiated recommendation from the ACIC. It is one I am struggling with this market doesn’t seem to be very data drive its is really consumer and a general practice in the market. So I am hesitant to think anyone would actually read the label too closely?

David Mott

Well I think correctly Connor like make some comment about that what will you with pricing this 50% better. I think it really understand how could can we proceed and what kind of statements from health authorities and like to go to be required to drive the demand. We need to have a clearer idea of what product profile is and were hopefully not more than just a few weeks away from understanding that with the 8,500 patient head to head prepare about this study. So lets get that take a look at it. See how powerful it is and from that we will have a much better ability to hypothesis how pubic health authorities recommending bodies and doctors going to make prescribe decision. Why don’t we make run over time a bit earlier one of we takes one more question and then we rap it up for today.

Operator

And your final question sir will come from Laine Holman with Sigma Capital.

Laine Holman

Hi guys I was just wondering in the 600 cases of flu that you know you saw that the trials. Do you know yet, how much was influenza A and how influenza B and if you don’t know that, do you know just during the season in the locations were the study was done, which was the predominant cause of disease?

David Mott

That we actually, the way that study was setup, over 250 clinical centers set nasal swabs to four central laboratories, they then test results swabs for the present influenza and that’s were the 600 number comes from they then also screen for A & B and it turned out that they were probably little over half islets were B, other little under half were A. So, we do know that at this point we had not we don’t really know the distribution of H1, H3 within the A and don’t know the match miss matched ratio yet.

Laine Holman

Okay. Thanks very much.

David Mott

Okay well terrific, we know that the we had a awful lot comments today in the call. So, we’ve gone little over with that frankly, because we have been awfully busy here in the Company over the last quarter and so far in 2005 and we are frankly very, very pleased with the diligent in execution of our employees year over the course this year and I want to thank them for the extraordinary efforts in driving forward on achieving our business plan and we were pleased to get continue support from you all shareholders and we see that plan come together. So, thanks for this time we look forward to talking as we have a further events for the rest of the year. I have a great morning.

Operator

Ladies and Gentleman thank you so much for the participation in today’s conference and does thus concludes our presentation. You may now disconnect, have a great day.


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