Chiron Ekes Out a Profit
Beleaguered biotechnology company Chiron Corp., still smarting from two high-profile failures to deliver flu vaccines in the United States and Europe, essentially broke even in the second quarter and badly missed Wall Street expectations, the company reported Wednesday.
Chiron also said the Food and Drug Administration last week finished a nine-day inspection of the company’s vaccine plant in Liverpool, England -- a factory that was at the center of a public health crisis last year because of Chiron’s inability to deliver 48 million flu shots.
The company, which hopes to win FDA approval to deliver 18 million to 26 million shots for the upcoming flu season, declined to release further details about the inspection.
For the second quarter, Emeryville, Calif.-based Chiron said it earned $49,000, or less than a penny a share, compared with $35.3 million, or 18 cents a share, in the same period last year.
Chiron said the U.S. flu debacle cost it $27 million in lost sales, factory upgrades and legal expenses in the second quarter. The company also wrote off $15 million in the quarter because of its inability to deliver a second flu vaccine to the European market.
If not for those costs, Chiron said, it would have earned $15.6 million, or 8 cents a share.
On that basis, the second-quarter results missed by 8 cents the average forecast of analysts surveyed by Thomson First Call.
Chiron reported results after the close of trading. Its shares fell 33 cents to close at $36.08 but then gained 47 cents in after-hours trading.
One analyst said the poor quarter was expected and that there was optimism that Chiron would get FDA approval to reenter the flu vaccine market. What’s more, the company’s main products -- blood tests and other vaccines -- showed increased sales.
“We didn’t have high expectations for this quarter,” said Eric Schmidt, an analyst with SG Cowen & Co. “At this point, it’s a cheap stock that is undervalued.”
In October, British regulators barred Chiron from shipping to the U.S. some 48 million flu shots, called Fluvirin, made in its Liverpool factory because of contamination concerns.
Despite the flu vaccine problems, Chiron’s revenue rose 10% to $419 million from $380 million, primarily because of increased sales of its other products such as travel vaccines and blood testing kits.
