U.S. spurns AstraZeneca's nasal spray flu vaccine as ineffective

(Adds expert's comments)

By Ben Hirschler and Julie Steenhuysen

LONDON/CHICAGO, June 23 (Reuters) - U.S (Other OTC: UBGXF - news) . health officials have advised doctors not to use AstraZeneca (NYSE: AZN - news) 's FluMist in the upcoming flu season based on three years of U.S. data showing that the nasal spray vaccine is not effective at preventing influenza.

The decision, announced late Wednesday, was based on a review by the Advisory Committee on Immunization Practices (ACIP) - a panel of experts that advises the U.S. Centers for Disease Control and Prevention - showing the vaccine did not offer adequate protection.

As a result of the move, the CDC said it will be working with manufacturers throughout the summer to ensure there is enough alternative vaccine supply.

AstraZeneca said it would take an $80 million writedown on stocks of its FluMist Quadrivalent vaccine as a result of the decision. The loss of the vaccine may be a problem for some pediatric practices that have already ordered supplies for the upcoming flu season.

FluMist is currently the only licensed flu vaccine that does not require a shot, making it a favored choice by parents of young children.

In the past year, among children aged 2 to 17, FluMist was only 3 percent effective, meaning it offered "no protective benefit," the CDC said. That compared with conventional flu shots, which were 63 percent effective against any flu virus among children in this age group.

"Unfortunately, and for inexplicable reasons scientifically, the nasal spray vaccine has performed very, very poorly," said Dr. William Schaffner, an infectious disease expert from Vanderbilt University Medical Center, who attended the advisory meeting.

"ACIP decided it could not in good conscience recommend the use of this vaccine until the problem had been resolved and new data had been presented," Schaffner said.

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.

Schaffner said differences in the performance of the vaccine seen in the United States and other countries were puzzling. He said it may have something to do with the H1N1 component of the vaccine - the strain of flu that cased a pandemic in 2009 - or it may be related to the fact that U.S. children are more likely to be vaccinated for flu than children in Europe and elsewhere.

Since 2010, the United States has recommended annual flu shots for everyone aged 6 months and older. Young children and older adults are at the greatest risk for serious complications of flu, which kills between 3,000 and 50,000 people each year.

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

The CDC said FluMist made up about 8 percent of the total projected supply of 176 million doses of flu vaccine for the upcoming flu season, and it comprised a third of all flu vaccine given to children aged 2 to 17.

Schaffner said it was not clear whether practices that had ordered FluMist would get rebates, and many would have to 'hustle" to find vaccine. "There will be turmoil, confusion and grumpiness generally," he said.

The British drugmaker said it was working with the CDC to better understand its data and to make sure U.S. patients can receive the vaccine in future flu seasons.

In other countries, distribution and use of the vaccine "are progressing as planned," the company said in a statement.

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.

Deutsche Bank (LSE: 0H7D.L - news) 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 (Berlin: DI6.BE - news) in AstraZeneca gained 0.3 percent while the European drugs sector rose 0.4 percent.

(Reporting by Ben Hirschler and Julie Steenhuysen; Editing by Marguerita Choy and Andrew Hay)