SEC Upgrades
Disclosure Probe
Involving Chiron
By DAVID P. HAMILTON
Staff Reporter of THE WALL STREET JOURNAL
February 14, 2005; Page B5
Chiron Corp. said the Securities and Exchange Commission has opened a formal investigation into possible violations of securities laws, upgrading an informal inquiry and turning up the heat on the biotech firm.
The SEC probe aims to discover whether Chiron fully disclosed to investors the vaccine-production problems at its plant in Liverpool, England.
In October, the SEC began investigating the Emeryville, Calif., company following Chiron's Oct. 5 announcement that U.K. health regulators had ordered the company to shut down its influenza-vaccine production plant in Liverpool. The shutdown deprived the U.S. of nearly half of the flu vaccine health authorities had been expecting for the 2004-2005 flu season, leading to shortages -- now mostly resolved -- and U.S. federal plans to ration the vaccine.
In October, The Wall Street Journal reported that Chiron had prepared in late September to tell investors and health regulators that it wouldn't ship any flu vaccine to the U.S. because its tests showed contamination at the Liverpool plant. A draft press release making that announcement was never released, and instead a day later the company publicly expressed confidence that it would ship the flu vaccine on time.
At the time, a spokeswoman said that the draft release was only a "contingency" and that test results appeared to show that Chiron had fixed the contamination problem.
The SEC investigation isn't Chiron's only concern. In October, federal prosecutors launched a grand-jury investigation and subpoenaed Chiron for information about its flu vaccine and the regulatory shutdown of the Liverpool plant.
Chiron said it continues to cooperate with the SEC probe.
Write to David P. Hamilton at david.hamilton@wsj.com |
