The chief executive of
said Thursday that although he is optimistic Chiron will provide flu vaccine for the upcoming U.S. flu season, he cannot predict how much vaccine will be produced.
Consequently, Howard Pien said he won't be able to provide 2005 financial guidance until perhaps April.
Pien commented on Chiron's prospects one day after British health regulators lifted their ban on the Liverpool plant where Chiron makes Fluvirin, the flu vaccine that was supposed to have provided half of the U.S. flu vaccine during the current flu season.
The restoration of the plant's license came five months after Britain ordered Fluvirin production halted
because inspectors found contamination in some of the vaccine. The manufacturing problems were sufficiently widespread that Chiron canceled all Fluvirin production. (Chiron's production of several other flu vaccines for foreign markets was unaffected.)
The big questions for Chiron now are how quickly the FDA will approve its Liverpool plant operations, how much vaccine it can produce and what arrangements it can make with distributors.
Pien said it will be several weeks before Chiron can get an idea of how much Fluvirin it might make. Meanwhile, Chiron is "actively continuing discussions with distributors," he said.
In a telephone conference call with analysts, Pien said that although Chiron is going "full force ahead" with production, "we are mindful of the remaining remediation steps" needed to secure FDA approval. "This is not the end of the story," said Pien. "It's the beginning of another chapter."
Despite the plant's clearance by British health regulators, a top FDA official said Wednesday that "work remains" on giving the plant a clean bill of health. The FDA and its British counterpart "will continue to closely monitor Chiron's progress as manufacturing proceeds," said Dr. Jesse Goodman, the FDA's director of the Center for Biologics Evaluation and Research.
"When all critical stages of manufacturing are in full swing, and needed corrective actions can be fully evaluated, the FDA plans to conduct a comprehensive inspection" of the Liverpool plant "to assure Chiron can produce a safe and effective vaccine," he added.
Pien said Thursday that Chiron will provide weekly updates to the FDA'a counterpart in Britain.
Financial analysts aren't sure how much Fluvirin Chiron will make. Some analysts had figured Chiron would likely be out of the U.S. flu vaccine market for the upcoming year. Now, Wall Street's Fluvirin estimates are all over the place. For example, Standard & Poor's predicts 25 million doses, while A.G. Edwards estimate calls for 30 million to 40 million doses for the U.S. market. Other investment-banking firms aren't willing to guess yet.
The consensus EPS estimate among analysts polled by Thomson First Call was $1.42 for 2005 and $1.90 for 2006. Last year, Chiron earned 70 cents a share from continuing operations, 13 cents below the average analyst estimate.
The Thomson First Call estimates for 2005 and 2006, compiled before Chiron's comments on Thursday, included reports from some analysts who had predicted Chiron wouldn't return to the U.S. flu vaccine market this year. That's why the First Call predictions for 2005 range from $1.02 to $1.72 and the 2006 estimates range from $1.53 to $2.34.
One example of how events changed estimates comes from Alex Hittle of A.G. Edwards, who raised his 2005 EPS to $1.75 from $1.35. Hittle told clients Wednesday that he was keeping his 2006 prediction at $2.10 and his hold rating on the stock. (He doesn't own shares; his firm is a market maker in the stock.)
Chiron's stock slipped 12 cents to $37.57 in midday trading Thursday.