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Chiron Lowers 2004 Profit

March 09, 2005|From Associated Press

SAN FRANCISCO — Biotechnology company Chiron Corp., still struggling to recover from its high-profile failure to deliver half the nation's flu vaccine last year, said Tuesday that its 2004 profit was $6 million less than reported.

Chiron, based in Emeryville, Calif., said earnings were $54 million, or 28 cents a share, instead of the $60 million, or 32 cents, it had reported in January.

Chiron said "material weaknesses in internal controls over financial reporting," including the improper recording of second-quarter sales, were prompting the company to revise the last three quarterly financial reports of 2004. It also said it had mishandled the reporting of taxes and legal expenses.

The company faces federal investigations and investor lawsuits because of its failure to deliver about 48 million flu shots last year. Regulators barred Chiron in October from shipping Fluvirin from its Liverpool, England, factory because of contamination concerns. The mishap cost the company an estimated $300 million in lost sales, and Chiron took a $91-million charge in the third quarter last year.

British regulators have authorized Chiron to resume making vaccine. Chiron said it was optimistic the Food and Drug Administration would allow it to ship Fluvirin for the flu season.

Chiron announced its restatement plans after regular trading. Shares fell 90 cents in extended trading after finishing the regular session 62 cents lower at $38.01 on Nasdaq.

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