Chiron’s Vaccine Problems Escalate

The outlook for Chiron Corp.’s flu vaccine business worsened Wednesday when the company said it would ship no vaccine from a troubled German factory.

The announcement came five days after Chiron slashed production at the Marburg plant after finding bacteria in some vaccine.

On Wall Street, the latest round of bad news fueled uncertainty about Chiron’s ability to supply vaccine to the United States. Contamination at the company’s factory in Liverpool, England, forced Chiron to destroy its entire U.S.-bound production last fall, causing public health authorities to ration scarce shots.

Food and Drug Administration officials are inspecting the Liverpool plant, but the company isn’t expected to reveal inspection results until next month. Chiron can’t ship vaccine to the U.S. from the Liverpool facility without FDA approval of the site.

Merrill Lynch & Co. analyst Eric Ende said in a research note that there was still a risk that Chiron might sell no vaccine in the U.S. this year.

Jennifer Chao of Deutsche Bank Securities Inc. said in a note to clients that Chiron’s latest problem “calls into question management credibility as well as potential systemic vaccine manufacturing issues.” But she expected the Liverpool facility to pass inspection.

Chiron said its difficulties in Liverpool and Marburg were unrelated, and the company said Marburg’s problems weren’t connected to the redeployment last year of vaccine experts from Marburg to Liverpool.

The Marburg factory supplies vaccine to Germany and England. The plant was slated to produce 12 million doses this year but cut the figure to 4 million Friday and to zero Wednesday. Chiron anticipated that a factory in Siena, Italy, would make up the shortfall.

Chiron said its problems in Marburg wouldn’t affect earnings, but a number of analysts reduced their earnings forecasts for the company.

Chiron shares Wednesday closed unchanged at $35.89.