NEW YORK, Aug 26 (Reuters) - Chiron Corp. is delaying shipment of its flu vaccine, Fluvirin, because lots containing 4 million vaccines, do not meet product sterility standards, the biopharmaceutical company said on Thursday .

Additional tests on new shipments will cause a delay on releasing the product until early October, the company said.

Chiron, the No. 2 maker of flu vaccines, supplied 38 million doses of vaccine for last year´s flu season and said it will have between 46 million and 48 million Fluvirin doses on the U.S. market in October.

Last month, the company, whose other products include treatments for multiple sclerosis and cystic fibrosis, said it was on track to deliver 50 million doses of Fluvirin to the U.S. market this season.

John Vavricka, vice president of North American commercial operations, said the company is retesting its manufacturing process as a "cautionary principle."

Chiron said its internal investigation has indicated "no wide spread issues with the manufacturing process."

"By identifying these eight lots that showed up and had a contamination issue, we look at the success of our process," Vavricka said. "Our process was able to identify this and pick this up. No product was released."

Michael King, Banc of America analyst, said Chiron´s ability to find a flawed batch of vaccine is helpful.

"It is better than having the FDA find it because of an adverse reaction," King said.

"It doesn´t sound like there´s going to be any danger of shortage," said King, who has a "buy" rating on Chiron. Chiron is also a Banc of America Securities client.

If the flu season strikes early, the Centers for Disease Control would probably set guidelines for people with high flu risks to get the vaccine first, he said.

Last year´s flu season struck very early with an epidemic in the Western United States at the end of November that lasted into December. Most flu seasons peak late December through March.

Chiron also said it expects to be within the range of proforma 2004 earnings per share estimates of $1.80 to $1.90, but at the low end of the range assuming the timely release of the vaccine in October.

Chiron´s earnings forecast excludes costs of 30 cents per share from amortization of intangible assets related to the company´s acquisitions of PathoGenesis, Chiron Behring, Pulmopharm and PowderJect.

King said this problem could benefit MedImmune Inc.´s (MEDI.O: Quote, Profile, Research) FluMist nasal spray vaccine "a little bit."

"You don´t want to see something like this helping FluMist," King said. "You don´t want to make people afraid of getting vaccinated."

The flu vaccine is usually made up of three inactivated strains of the influenza virus selected by the Centers for Disease Control and either protects people from contracting the virus or mitigating its effects.

About 10 to 20 percent of U.S. residents get the flu each year it causes 36,000 deaths and 114,000 hospitalizations annually, the Centers for Disease Control said.