Chiron: shrinks estimate of flu vaccine production
submited by kickingbird at Jun, 17, 2005 8:37 AM from Chiron PRNews
|Chiron Revises Production Range for FLUVIRIN Vaccine and Updates Financial Guidance; Delays in Reaching Full-Scale Production Expected to Reduce Doses and EPS; Full FDA cGMP Inspection of Liverpool Manufacturing Facility Expected in July|
EMERYVILLE, Calif.--(BUSINESS WIRE)--June 15, 2005--Chiron Corporation (Nasdaq:CHIR) today announced revisions to its production estimates for FLUVIRIN(R) influenza virus vaccine for the 2005-2006 influenza season. Due to delays in start-up procedures for ramping up to full production and normal manufacturing issues inherent to the complexity of influenza vaccine production, Chiron will produce fewer FLUVIRIN vaccine doses than earlier anticipated. Accordingly, the company has also updated its 2005 financial guidance.
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.
Chiron delivers innovative and valuable products to protect human health by advancing pioneering science across the landscape of biotechnology. The company works to deliver on the limitless promise of science and make a positive difference in people´s lives. For more information, please visit www.chiron.com.
This news release contains forward-looking statements, including statements regarding earnings and sales growth, supply of FLUVIRIN(R) influenza virus vaccine that Chiron expects to deliver to the U.S. market in future influenza seasons, and improvements to manufacturing facilities, that involve risks and uncertainties and are subject to change. A discussion of the company´s operations and financial condition, including factors that may affect its business and future prospects that could cause actual results and developments to differ materially from those expressed or implied by forward-looking statements, is contained in documents the company has filed with the SEC, including the Form 10-K for the year ended December 31, 2004, and the Form 10-Q for the quarter ended March 31, 2005, and will be contained in all subsequent periodic filings made with the SEC. These documents identify important factors that could cause the company´s actual performance to differ from current expectations, including, among others, additional adverse developments resulting from the suspension of Chiron´s UK license to manufacture FLUVIRIN vaccine from October 5, 2004, through March 2, 2005, the announcement of such suspension and the litigation and investigations relating to those matters, the outcome of clinical trials, regulatory review and approvals, manufacturing capabilities, intellectual property protections and defenses, litigation, stock-price and interest-rate volatility, marketing effectiveness, and the severity of the 2005-2006 influenza season. In particular, there can be no assurance that additional issues with respect to FLUVIRIN vaccine or Chiron´s manufacturing generally will not arise in the future or that Chiron will successfully address matters raised in a warning letter from the FDA with respect to its FLUVIRIN vaccine manufacturing facility or resume sale of FLUVIRIN vaccine for the 2005-2006 influenza season. In addition, the company may face additional competition in the influenza market in the future and challenges in distribution arrangements as a result of the recent FLUVIRIN vaccine developments. In addition, the company may engage in business opportunities, the successful completion of which is subject to certain risks, including approval by Novartis AG, shareholder and regulatory approvals, and the integration of operations.
Chiron does not undertake an obligation to update the forward-looking information the company is giving today.
NOTE: FLUVIRIN is a trademark of Chiron Corporation.
CONTACT: Chiron Corporate Communications & Investor Relations
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