July 20, 2005

Chiron will not have flu vaccine outside U.S.

CHICAGO (Reuters) - Troubled flu vaccine maker Chiron Corp.
on Wednesday said it would not be able to supply flu vaccine
outside the United States for the 2005-2006 season, days after
reporting it would slash production due to potential
contamination at a German plant.

Chiron said it will not be able to make the Begrivac flu
vaccine, which is sold in non-U.S. markets, after last week
saying it would cut production by two-thirds and would possibly
delay shipments.

The vaccine shortfall will not change financial forecasts,
Emeryville, California-based Chiron said.

Analysts have lost confidence in the company following last
year's announcement that it could not provide nearly half the
supply of flu vaccine in the United States after regulators
found contamination problems at its Liverpool, England, plant.

"When will the bleeding stop?" Merrill Lynch analyst Eric
Ende asked in an investor note. He said that despite assurances
from Chiron that the company was still working with U.S.
regulators to restore production at its British plant, that was
not a given.

"We believe that there is still a risk that Chiron may not
be able to sell any vaccine to the U.S. market in the 2005-2006
season either," Ende, who has a sell rating on the stock, said.

According to Reuters' Estimates, 11 analysts have a "hold"
rating on the stock, six have an "underperform or sell" and
three analysts have a "buy" or "outperform" rating.

Last week, Chiron said it was forced to sharply cut
production at the German plant where the Begrivac vaccine is
made because of contamination concerns.

Chiron shares slipped 9 cents in morning Nasdaq trading.