Chiron Recalls, Withdraws Measles Vaccine
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EMERYVILLE, Calif. - The biotech company linked to recent flu shot shortages
said Thursday that it was recalling and withdrawing a measles, mumps and
rubella vaccine it supplies to developing countries and Italy because of a
higher rate of adverse effects than similar vaccines.
Chiron Corp. said about 5 million doses of the Morupar vaccine were
distributed to developing countries in 2005, and about 450,000 doses were
distributed in Italy.
The company said the side-effects included fever, allergic reactions and
glandular swelling, which occurred just after inoculation.
Chiron said in a statement the reactions do not indicate any long-term risk
and that the recall and withdrawal were a precaution.
The recall does not affect its other vaccines, Chiron said.
Emeryville-based Chiron set off a public health panic in 2004 when it failed
to deliver half the nation's expected 100 million flu shots after British
regulators discovered contaminated vaccine at its Liverpool, England,
manufacturing plant.
Last fall, Chiron Corp. again said it wouldn't be shipping as many flu shots
as it initially had hoped, saying production delays and decreased output
occurred after it made repairs at its Liverpool plant.
Chiron has said it delivered 13 million flu vaccine shots in 2005, well
below the 18 million to 26 million doses it had initially planned to make.
Chiron said it will work closely with the World Health Organization to
conduct a risk-benefit analysis to see if the measles, mumps and rubella
vaccine should be rereleased in limited quantities.
The recall prompted the company to lower its fourth-quarter results by 3
cents per share.
The company revised its earnings to $138 million, or 68 cents per share,
from $144 million, or 71 cents a share, for the fourth-quarter, and to $180
million, or 94 cents per share, from $187 million, or 97 cents a share, for
the year. Chiron reported results in late January.
The Morupar vaccine booked $10 million in sales for 2005. Chiron wrote off
about $6 million of Morupar inventory for 2005 and recorded $1.7 million of
reserves for anticipated product returns.
Shares of Chiron fell 6 cents to $45.64 in midday trading on the Nasdaq
Stock Market.
The Federal Trade Commission has approved the company's acceptance of a
$45-per-share buyout offer from Swiss drug maker Novartis AG.
Novartis already owns 44 percent of Chiron and has offered $5.1 billion in
cash for the rest of the stock. The two companies hope to close the deal in
the first half of this year, but four shareholders owning a combined 17.5
percent of the company oppose the deal as too cheap.
One of those shareholders, ValueAct Capital, said Wednesday it will call for
the ouster of Chiron Chief Executive Howard Pien if he backs Novartis' bid
and the shareholders turn it down.
"If Howard Pien is going 'on the road' to argue for the appropriateness of
the Novartis offer, we can only conclude that our confidence in him has been
betrayed, and that he has chosen not to accept responsibility for maximizing
shareholder value," ValueAct partner G. Mason Morfit wrote in a letter to
Pien and the Chiron board.
