Bugs in Flu Drug Hit Chiron

Updated from August 26

Chiron(CHIR Quote - Cramer on CHIR - Stock Picks) shares fell early Friday after the company late Thursday said it has found some problems with the production of its Fluvirin influenza virus vaccine, which will cause a delay in the product's reaching the market until early October.

Chiron said its quality control program detected "a small number" of products that failed to meet sterility specifications. Because it continues to investigate this matter, Chiron won't record any sales during the third quarter. The delay won't change the company's earnings-per-share prediction for the full year of $1.80 to $1.90 a share. But it said the EPS result will be at the low end of the range. (On a GAAP basis, the company expects an EPS $1.50 to $1.60 per share.)

In premarket trading Friday, Chiron's stock fell $3.64, or 7.7%, $43.85. The annoucement came after the markets closed Thursday.

"Chiron is committed to protecting people. These extra checks will ensure that the quality, safety and effectiveness of our product meet our rigorous standards," said John Lambert, president of Chiron Vaccines. "We currenty expect Fluvirin doses to be available in early October, in time to meet public health needs for this influenza season, and we expect to provide even more Fluvirin doses this season than last season."

Last month, the Emeryville, Calif.-based company said it was on schedule to deliver an estimated total of 50 million doses of Fluvirin to the U.S. market this season and that it had delivered its first 1 million doses to U.S. distributors.

"Assuming satisfactory results from ongoing release testing," the company said it now expects to deliver between 46 million and 48 million Fluvirin doses to the U.S. market beginning in October.