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When MedImmune Inc. acquired Aviron in late 2001 for $1.5 billion in stock, the company assumed that Aviron's FluMist influenza vaccine would garner $500 million in sales within three years of launch and $1 billion within five years. Thus it paid three times expected 2005 sales and 1.5 times 2007 sales, assuming FluMist would be launched for the 2002-03 flu season.

The reality has turned out to be far different. FluMist was launched a year later than anticipated, and MEDI has estimated that once it figures out how much vaccine was actually sold, it may ultimately record (but not until 2004) 2003 FluMist revenues of about $30 million. ...