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Biotech / Medical : Biotech Valuation
CRSP 54.85-3.7%12:07 PM EST

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To: Doc Bones who wrote (13374)10/7/2004 9:14:31 AM
From: Doc Bones  Read Replies (2) of 52153
 
Contagious Turmoil

Closing of Flu-Vaccine Plant By British Regulators Took Chiron, U.S. by Surprise

More on the trans-Atlantic spat [Another brewing - Airbus vs. Boeing]. Where's Henry James when you need him?

;-)

Doc


By JEANNE WHALEN, SARAH LUECK and BETSY MCKAY
Staff Reporters of THE WALL STREET JOURNAL
October 7, 2004; Page B1

British authorities' abrupt shutdown this week of Chiron Corp.'s flu-vaccine plant in Liverpool was prompted by evidence that the "whole production process" needed to be overhauled for safety reasons, a top British regulator said yesterday.

Britain's Medicines and Healthcare Products Regulatory Agency "did not notify the [U.S.] Food and Drug Administration about the pending suspension until we were in a legal position to do so, in other words when the suspension happened," the MHRA's chief executive, Kent Woods, said in a telephone interview.

Mr. Woods's comments help explain why U.S. officials are privately grousing that they were "blindsided" by the British officials' decision to halt work at the Chiron plant. The action immediately raised questions about U.S.-British cooperation on securing an adequate vaccine supply for the U.S., where annual flu fatalities are estimated to total 36,000.

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Shutting the Liverpool plant cuts in half the number of flu-vaccine doses that will be available in the U.S. this flu season.

Though the Chiron plant provides 10% to 20% of the United Kingdom's flu vaccine, the MHRA said in a statement that Britain wouldn't see a flu vaccine shortfall this season. "We have arranged for an extra 1.2 million doses to be available to doctors' surgeries by the end of October and a further one million by mid-November," it said.

The statement didn't say where the doses would come from. GlaxoSmithKline PLC, the U.K.'s largest drug maker, said it would be able to provide some extra doses in Britain but its ability to do so is limited, given the complex process involved in making flu shots.

"It's very difficult to produce flu vaccines in the short term," said Glaxo spokesman Chris Hunter-Ward. He added that the company doesn't have a license to sell flu shots in the U.S.

Chiron, based in Emeryville, Calif., learned that U.K. regulators were revoking the Liverpool plant's license on Tuesday at 3 a.m. Pacific time and issued a statement almost four hours later. It was Chiron Chief Executive Howard Pien who first told top U.S. health officials, in early calls that day.


The problem began in August, when Chiron discovered contamination that had occurred in the final stage of the manufacturing process and affected four million doses.

The contamination, suspected to be a bacterium called serratia, halted shipment to the U.S. But British officials cited much broader problems in shutting down the plant, a Chiron official said.

"They made a very strict and rigorous judgment call," said Bryan Walser, head of strategy and corporate affairs for Chiron. He added that the company has been investing in the plant to improve its manufacturing practices. He declined to elaborate on the reasons cited by the health authorities. "They're doing this in the belief that more rigorous processes will prevent the human error we think was the root cause of the contaminated lots," he said.

The Chiron fiasco is yet another reminder that the market for vaccines is malfunctioning. This is the ninth time since 2000 that the U.S. has experienced a shortage of an important vaccine.

Shortages of vaccines for diphtheria, tetanus, chickenpox and measles have occurred since then, and this is the fourth year out of five that the U.S. has had a flu-vaccine shortage.

A blue-ribbon panel of the Institute of Medicine warned last year of calamities such as this one, caused in part by the small and dwindling number of suppliers. The panel recommended better financing mechanisms and limited legal liability to encourage more producers. Nothing has changed, however.

Sara Rosenbaum of George Washington University and an IOM panel member, said, "There is huge demand and no suppliers. There is no market around vaccines."

At the time of the Liverpool plant's shutdown, U.S. officials had been waiting for more information from Chiron and U.K. authorities about the problems at the Chiron facility. After the August discovery that some vaccine batches at Liverpool were contaminated, company officials thought the problem was limited. And U.S. officials at the time had decided to wait for the results of a British inspection of the plant -- but weren't expecting the British to shut down the facility, at least not without first talking to U.S. regulators, said officials at the Department of Health and Human Services.

In August, U.S. officials had discussed contingency plans for a possible vaccine shortage but didn't anticipate that Chiron's entire contribution would be wiped out.

A team of FDA scientists was scheduled to leave last night for England, where they will meet with regulators and Chiron officials and tour the Liverpool plant. The scientists will look into whether any of the Chiron flu vaccine is usable, including more than a million doses that already are in the U.S.

"It does not look promising at this point," said HHS Secretary Tommy Thompson.

Mr. Woods of the MHRA confirmed that the vaccine had been contaminated with serratia and said the British regulators didn't make their decision lightly to shut down the plant. "We are very conscious of the public-health implications of this action. We have considered very carefully the implications this has in the U.S., the U.K. and Europe," he said.

He added that the MHRA doesn't "anticipate this [problem] being resolved for the current year but hopes the Liverpool factory can be up and running for next year's season."

As recently as last week, when Chiron's Mr. Pien testified at a congressional hearing on flu and the elderly, the company was making optimistic public statements.

"We profoundly regret that we have caused uncertainties in this year's flu-vaccine supply," Mr. Pien said, according to a transcript. But he said he expected Chiron would ship 46 million to 48 million doses to the U.S. this month.

Write to Jeanne Whalen at jeanne.whalen@wsj.com, Sarah Lueck at sarah.lueck@wsj.com and Betsy McKay at betsy.mckay@wsj.com

online.wsj.com
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