Chiron Scales Back Its Flu-Vaccine Production Plan

Chiron Corp. disclosed Wednesday that it planned to sharply scale back flu vaccine production this year, raising concerns about another season of shortages.

Chiron said it would produce 25 million to 30 million doses of vaccine, about half the amount it had hoped to supply in 2004 before regulators temporarily closed the company’s factory in Britain. Wall Street had expected Chiron to ship at least 35 million doses this year.

Though other vaccine makers could fill the gap left by Chiron’s move, Eric Schmidt, an analyst with S.G. Cowan & Co., said total vaccine supplies for next flu season could be light.

Chiron gave an update on vaccine production as it announced its first-quarter earnings. The Emeryville, Calif.-based company said it lost $9 million, or 5 cents a share, contrasted with net income of $27 million, or 14 cents, in the year-earlier quarter.

Problems at the Liverpool vaccine factory affected results. Chiron said plant remediation costs came to $16 million and the legal tab was $10 million.

Excluding costs related to acquisitions, Chiron had net income of $7 million, or 4 cents a share, compared with $43 million, or 22 cents, in last year’s first quarter.

Revenue rose 7% to $407 million from $380 million.

Last October, regulators in Britain suspended Chiron’s license in Liverpool after inspectors reported bacterial contamination and sloppy manufacturing at the plant. The suspension eliminated half the anticipated U.S. supply of flu shots. The license was restored in March after Chiron pledged improvements and shook up plant management.

Chiron’s results came after regular Nasdaq trading, during which the company’s stock price rose 48 cents to $34.43. The shares sank in after-hours trading to $32.82.