Chiron’s Results on the Mend
Chiron Corp. on Tuesday said third-quarter net income nearly doubled from the depressed levels of a year ago, when the biotechnology company was forced to scrap its entire production of flu vaccine for the U.S.
As it released its financial results, Chiron said it had reached a “turning point” in its recovery from manufacturing problems that caused it to write off $91 million in vaccine inventory last October.
Chiron resumed vaccine shipments from its troubled factory in Britain last week and said Tuesday that it expected to deliver 5 million doses to the U.S. by the end of this month.
The company said it would deliver fewer than 18 million doses this year, one-third the amount it expected to ship in 2004 before contamination was found in Chiron’s Liverpool vaccine plant.
Chiron earned $51.3 million, or 27 cents a share, in the third quarter, up from $27 million, or 14 cents, in last year’s third quarter.
Revenue in the third quarter fell 9% to $479.6 million from $529 million a year earlier. Sales were hurt by manufacturing problems at a factory in Germany that forced Chiron to withdraw its entire production of a flu vaccine slated for European markets. The European flu vaccine had sales of $41 million in last year’s third quarter.
Chiron said that excluding special charges, the company earned $73 million, or 38 cents a share, compared with $53 million, or 27 cents, in the same period a year ago.
On that basis, Chiron missed analysts’ forecasts by 7 cents, according to Thomson Financial.
In a conference call, Chief Executive Howard Pien said the company did not yet know how much vaccine it would produce this season. He said it was taking time for new “processes and procedures” in Liverpool to take hold.
“It is like breaking in a new Maserati,” Pien said, adding that initially “you don’t step on the gas too hard.”
Public health authorities have said they do not expect a widespread shortage of vaccine despite Chiron’s continued problems. The national Centers for Disease Control and Prevention said at least 71 million doses would be available this year -- more than in two of the last five years.
Chiron said it had launched a clinical trial in the U.S. of a flu vaccine produced in genetically engineered cells instead of chicken eggs. The cell-based technique is considered potentially more efficient than the current method, in which one chicken egg is needed for each dose of vaccine.
Chiron’s results were released after the market close. In regular trading, Chiron rose 14 cents to $44.09. After hours, shares inched higher to $44.14.
