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Acquisition Costs Offset Strong Sales at Chiron

October 30, 2003|Denise Gellene | Times Staff Writer

Chiron Corp. swung to a third-quarter loss because of acquisition-related expenses but its flu vaccine sales soared, the company said Wednesday.

The Emeryville, Calif.-based biotechnology company had a loss of $19 million, or 10 cents a share, contrasted with net income of $82 million, or 43 cents a share, in the year-ago quarter.

The company, a provider of vaccines and blood-testing equipment, took a $122.7-million charge on products in research and development at PowerJect Pharmaceuticals, the British vaccine company Chiron acquired in May.

Excluding the write-down and other charges, Chiron had quarterly earnings of $118.5 million, or 61 cents a share, above Wall Street's forecast of 52 cents, according to Thomson First Call.

Revenue rose 47% in the third quarter to $540 million from $368 million a year earlier. Chiron's vaccine sales more than doubled to $263 million from $125 million in the year-ago quarter, driven by strong sales of PowerJect's Fluvirin flu vaccine.

The $810-million purchase of PowerJect made Chiron the second-largest seller of flu vaccines in the U.S., next to Aventis.

Chiron said it expected strong vaccine sales in the fourth quarter but said that acquisition-related expenses and other costs would affect earnings. The company said it continued to expect full-year earnings per share to range from $1.40 to $1.50.

Chiron said that increased investment in its vaccine, blood-testing and oncology drug businesses would limit earnings growth in 2004, but that pro forma earnings per share would range from $1.80 to $1.90, an increase of about 20%.

Chiron said it was planning a late-stage human test of its experimental drug tifacogin in patients with severe community-acquired pneumonia. Tifacogin failed to work in a late-stage trial in patients with sepsis, but Chiron said an analysis of data from that 2001 test indicated the drug had an effect in pneumonia patients.

Chiron said 300,000 patients are admitted to intensive-care units each year with severe community-acquired pneumonia and one-third of them die.

The company also said Wednesday that it had discontinued tests of its interleukin-2 drug in breast cancer and high-grade non-Hodgkin's lymphoma patients for lack of efficacy.

Chiron announced its earnings after the market closed. In Nasdaq trading Wednesday, Chiron fell 15 cents to $56.65.

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