Chiron ( CHIR) is pulling its measles, mumps and rubella vaccine Morupar off the market, saying it was associated with a higher reported rate of adverse events following immunization than similar products. Because of the product withdrawal, Chiron will revise its 2005 earnings downward by 3 cents a share. Chiron supplied around 5 million doses of Morupar last year, mostly to developing countries through the U.N. Children's Fund and the Pan American Health Organization. Around 450,000 doses went to Italy, where the vaccine is produced. This isn't the first time the Emeryville, Calif., company has had problems with a product, but past issues have tended to be the result of manufacturing issues. In the case of Morupar, Chiron said it might have a higher rate of side effects than other measles, mumps and rubella vaccines. The episodes the company has noticed have often been those commonly associated with vaccines, such as fever, allergic reactions and swelling of the glands. Chiron said negative reactions to the vaccine are rare, but it wanted to take Morupar off the market as a precautionary measure. The company also said the problems it has found don't indicate any long-term risk for patients who have previously received the vaccine. Sales of the Morupar vaccine totaled roughly $10 million last year, just a fraction of Chiron's overall revenue of $1.92 billion. As a result of the product's withdrawal, as well as other adjustments the company has identified since its Jan. 31 earnings announcement, Chiron is revising its 2005 profit to $1.31 a share on an adjusted basis from $1.34 and to 94 cents a share from 97 cents when calculated by generally accepted accounting principles. Chiron has written off around $6 million of Morupar inventory because of the withdrawal and has recorded about $1.7 million of product-return reserves. The withdrawal of Morupar doesn't affect any of Chiron's other vaccines.
The company's fourth-quarter results were also revised down by 3 cents a share, to 78 cents on an adjusted basis and 68 cents according to GAAP calculations. Switzerland's Novartis ( NVS) owns about 44% of Chiron's common stock, and it's trying to buy the rest of the company for $45 a share, or $5.1 billion. At least
four significant shareholders are opposing the Novartis proposal. Manufacturing problems forced Chiron to cancel all sales of its Fluvirin vaccine in the U.S. during the 2004-05 season. Chiron returned to the market during the 2005-06 season, but with a sharply reduced supply of the vaccine. Shares of Chiron were down 10 cents at $45.60 Thursday.