Chiron will be unable to meet its own production targets for the influenza vaccine Fluvirin this year because of lingering problems at its manufacturing facility in Liverpool, UK. The news prompted the company to trim back its 2005 financial forecasts.
Chiron had its manufacturing licence suspended last October by the UK Medicines and Healthcare products Regulatory Agency after contamination problems were uncovered at the plan' [[06/10/04b]]. And with 48 million doses of Fluvirin destined for the US market, fully half the country’s total requirement, the halt in production led to shortages in the 2004-2005 flu season.
Chiron was given the go-ahead to resume production in early March, and said in April that it would be able to deliver 25 to 30 million doses before the 2005-2006 flu season. But yesterday the company said its output would be in the 18 to 26 million dose range, which prompted it to cuts its earning forecasts from $1.06 to $1.16 to $0.86 to $1.11 per share in 2005. The suspension last year has already contributed to a $304 million dollar reduction in sales at the firm last year. Chiron also had to write off the entire Fluvirin vaccine product inventory in the third quarter of 2004, resulting in a $91 million charge to cost of sales [[28/01/05e]].
The US company attributed the shortfall to “delays in start-up procedures for ramping up to full production and normal manufacturing issues inherent to the complexity of influenza vaccine production.” Vaccines are often more costly to produce than drugs because they are made from live viruses, instead of chemicals. Making a vaccine can require hundreds of steps, each subject to stringent sterility guidelines. The US Food and Drug Administration scheduled to inspect the Liverpool plant next month and rule whether it will be able to ship Fluvirin to the US for the coming flu season.
Chiron’s problems extend the window of opportunity for companies, such as GlaxoSmithKline and MedImmune [[10/12/04d]], [[25/10/04e]], that are aiming to break into the US market for flu vaccine, formerly shared fairly evenly by Chiron and France’s Sanofi-Aventis. The USA managed to secure additional supplies from these suppliers last year, but was still left with a 39 million-dose shortfall. In the end, thankfully, the flu season proved mild and supplies were adequate. For this year, the US Centers for Disease Control and Prevention has said it has ensured that it will have enough stocks of flu vaccine – with or without Chiron’s contribution.