Chiron Says SEC Inquiry Is Now a Formal Probe

Chiron Corp. said Friday that an investigation by the Securities and Exchange Commission into possible violations of securities laws related to its flu vaccine business had been upgraded from informal to formal.

Emeryville, Calif.-based Chiron came under scrutiny in October after British regulators, citing bacterial contamination, shut down its factory in Liverpool, which had produced 50% of the flu vaccine slated for the United States.

Later that month, the SEC opened an informal inquiry. In addition, federal prosecutors in New York subpoenaed documents related to the company’s Fluvirin flu vaccine and the Liverpool laboratory.

At the time, some speculated the SEC was looking into when Chiron learned of the impending action by the British, and at how promptly the company disclosed its regulatory woes to the public.

Calls to the SEC were not returned Friday, and it was unclear why the probe was intensified.

“We can’t really speculate as to the reasons for the change,” said Richard Tate, a spokesman for Chiron. “We are cooperating fully.”

Chiron released the news after the markets closed. Chiron shares rose $1.69 on Friday to $35.63 on Nasdaq. The stock has plunged 21% since Oct. 4, the day before the company announced the plant closure.