AstraZeneca takes $80 million hit as U.S. spurns nasal flu vaccine

[June 23, 2016]  By Ben Hirschler

LONDON (Reuters) - AstraZeneca said it would take an $80 million writedown on stocks of its flu vaccine Flumist Quadrivalent, which is sprayed into the nose, after U.S. health authorities decided they would not use the product.

The U.S. Centers for Disease Control and Prevention (CDC) ruled the vaccine should not be used in any setting, based on U.S. data indicating a marked drop in effectiveness in children over the last three years.

The decline in Flumist's efficacy in the United States is puzzling, especially since CDC experts had recommended it preferentially in 2014 over injectable flu vaccines in children, citing its superior efficacy.

Flumist is often given to children because they can be immunized without the need for injections.

AstraZeneca said the CDC data contrasted with its own studies as well as preliminary independent findings by public health authorities in other countries suggesting the vaccine was 46 to 58 percent effective overall against flu strains during the 2015-2016 season.

U.S. sales of Flumist in 2015 totaled $206 million, or just under 1 percent of group revenue.

"AstraZeneca is working with the CDC to better understand its data to help ensure eligible patients continue to receive the vaccine in future seasons in the U.S.," AstraZeneca said in a statement on Thursday.

"The distribution and use of the vaccine in other countries are progressing as planned for the forthcoming influenza season, pending the annual release process from relevant regulatory authorities."

Despite the setback, AstraZeneca said it maintained its 2016 financial outlook of a low-to-mid single digit decline in revenue and core earnings, at constant exchange rates.

However, Deutsche Bank analyst Richard Parkes said the U.S. vaccine problem would likely drag down consensus earnings forecasts for the current year by around 2 percent and there was a 1-2 percent risk to future forecasts, if the issue was not resolved.

Shares in AstraZeneca lagged a firmer European market, gaining 0.5 percent by 0940 GMT, while the European drugs sector rose 1 percent.

(Reporting by Ben Hirschler; Editing by Jason Neely and Susan Fenton)

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