Americans face that decision every winter, and a lot of them choose the latter.

But officials at MedImmune Inc. (NasdaqNM:MEDI - News) are betting that given a choice, folks will opt not to go the flu-shot route.

Any day now, the firm expects the OK from the Food and Drug Administration (news - web sites) for FluMist, a nasal-spray version of the flu vaccine. The possibility has the Street abuzz.

"It should come with quite a bit of fanfare because of the new modality for administration," said analyst Robert Parente of Leerink Swann, which has no relationship with MedImmune. "Instead of a shot, it's just two puffs up the nose."

The drug's sales potential is still unclear, though analyst Stefan Loren of Legg Mason takes a cautious line.

"We view it as a consumer product, not as a prescription drug," he said. "Not only will it be vying with other consumer products in a hard economy, but it won't necessarily work better than the competition, which is cheaper."

Indeed it is. Flu shots run around $10 to $15 each, but FluMist will cost about $40 a dose. It's a touchy substance that has to be frozen. Once it's defrosted, it must be used right away.

Hurdles To Clear

Loren also worries about safety issues stemming from the vaccine's makeup. It contains a live, though weakened, virus. Particularly in a setting with children around, Loren says, there's a chance of the virus being transmitted and mutating into variant strains.

Another possible caveat is that FluMist will probably be endorsed only for those ages five to 49. That's the group an FDA committee recommended for approval back in December, after reviewing the clinical data. Efficacy for older patients wasn't proven, the group said.

On the plus side, the drug's distributor will be Wyeth - an experienced marketer, analysts say.

"Wyeth will go to work to grease the skids for the upcoming flu season," Parente said. "(They'll be) educating the physician network (and use) a more direct consumer campaign . . . differentiating the FluMist vaccine from the traditional needle vaccine."

It might take time for consumers to jump on board.

"I think it's going to take many years to build the market, largely because the age range within which they can operate typically isn't vaccinated on a routine basis," said Lazard Freres analyst Joel Sendek, who has no relationship with MedImmune. "They really have to create a market from scratch."

Time is on MedImmune's side because it already has a blockbuster under its belt. In 1998 it released Synagis, which wards off respiratory syncytial virus - a bug that mainly affects children and infants.

Synagis has become one of the best-selling pediatric prescription drugs of all time, Parente says. Last year the product's worldwide sales hit $668 million, up 29% from the year before.

The trouble is, MedImmune has become nearly a one-drug show. Although it has four others on the market, Synagis generated 79% of the firm's 2002 revenue.

And the Synagis business is maturing. Analysts expect its sales to grow 10% to 13% next year, a notable slowdown.

The firm has a pipeline of drugs for various ailments: human papilloma virus, Epstein-Barr syndrome and psoriasis, among others. But nothing's close enough to FDA approval to bring in revenue before 2006.

Knowing it needed a second act soon, MedImmune decided to buy one. In January 2002 it bought Aviron, the firm that was developing FluMist.

"The acquisition was pretty much all about FluMist," said Loren, who also has no connection to MedImmune. "They got their big-ticket product, and the other things came along for the ride."

Steady Profits

The one problem with adding FluMist is that it's bound to make MedImmune's earnings even more seasonal than they are already, analysts say.

Since respiratory syncytial virus is a winter phenomenon, the firm almost invariably loses money in the second and third quarters. Influenza is also concentrated in the winter.

Still, MedImmune has had no problem turning a profit the last half decade, though last year's results show its need for diversity.

Earnings in 2002 declined 38% from the year before to 42 cents a share - in part because of lower margins. Sales were up 37% to 848 million.

MedImmune officials declined requests for comment. In the fourth-quarter earnings release they blamed the lower margins on increased royalty payments and higher promotion expenses for Synagis, as well as higher research and development expenses.

Things look better this year. First Call analysts expect 2003 earnings to more than double to 90 cents a share. They see a steady growth trend over the next several years.

Planting Seeds

Another move that might pay off in the long term is last year's formation of a venture-capital unit. A lot of drug makers are forming these units to develop biotechnology, Loren says.

"(Chief Executive) Dave Mott is a very smart manager," he said. "He has many times done the right thing at the right time. This may well turn out to be a good move down the road."