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Flu Manufacturer Chiron Will Produce Fewer Fluvirin Vaccine Doses Than Earlier Anticipated
Chiron now estimates that it will produce between 18 million and 26 million doses of FLUVIRIN vaccine for the 2005-2006 influenza season. The company now expects 2005 income from continuing operations to be between $1.20 and $1.45 per share on an adjusted (pro forma) basis and between $0.86 and $1.11 per share on a GAAP basis. As stated in its first-quarter 2005 earnings announcement on April 27, 2005, Chiron had expected to produce between 25 million and 30 million doses of FLUVIRIN vaccine for the 2005-2006 influenza season. The company had expected 2005 income from continuing operations to be between $1.40 and $1.50 per share on an adjusted (pro forma) basis and between $1.06 and $1.16 per share on a GAAP basis. The revised dose and EPS estimates assume that demand is sufficient to allow Chiron to sell FLUVIRIN vaccine through the end of November.
Chiron management uses adjusted financial statements to gain an understanding of the company's operating performance on a comparative basis. Adjusted guidance excludes amortization expense on acquired intangible assets related to the acquisitions of PathoGenesis, Chiron Behring, Pulmopharm and PowderJect Pharmaceuticals, totaling approximately $0.34 per share.
"Since March 2, when the UK regulatory authority reinstated our manufacturing license, we have worked to simultaneously continue our remediation of our Liverpool facility and begin our 2005-2006 FLUVIRIN campaign," said Howard Pien, CEO of Chiron. "As remediation has progressed, we have monitored numerous factors that affect FLUVIRIN production. While it remains possible that we will reach our previously announced range, the delays and other manufacturing issues have had an adverse impact on our ramp-up to full production, so we are updating our dose expectations and guidance range. We are committed to our goal of supplying influenza vaccine in time for the upcoming season, and we are working diligently toward that objective. We have made tremendous progress, and we are positive about our prospects for reaching our goal."
Chiron's revised estimated FLUVIRIN dose range and financial guidance are based on current production estimates. The number of doses Chiron will produce will depend upon the success of its remediation efforts, upon encountering no further adverse manufacturing or regulatory developments, and upon the major factors that determine production -- volumes, yields and timing. Chiron currently expects that the U.S. Food and Drug Administration (FDA) will conduct a full cGMP (current good manufacturing practices) inspection in July to determine whether deficiencies noted in its warning letter issued in December 2004 have been resolved. If Chiron fails to adequately address the matters discussed in the warning letter, the FDA may take further action that could reduce Chiron's ability to market FLUVIRIN vaccine.
Source: Chiron Corporation