Chiron (NASDAQ:CHIR)
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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.
About Chiron
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.