Chiron subpoenaed over contaminated flu vaccine

Chiron, the biotech company, has become the subject of a federal grand jury investigation in the US after British regulators last week issued a surprise suspension on the export of its flu vaccine from its Liverpool plant to the US.

Chiron, the biotech company, has become the subject of a federal grand jury investigation in the US after British regulators last week issued a surprise suspension on the export of its flu vaccine from its Liverpool plant to the US.

Chiron revealed in a stock exchange filing yesterday that it has received a subpoena to hand over "documents and materials" to the US attorney's office for the Southern District of New York. It said it would co-operate fully with the investigation.

Members of the US justice department are seeking more details about the events that led to the suspension of Chiron's licence to manufacture in Liverpool a vaccine called Fluvirin by Britain's Medicines and Healthcare Products Regulatory Agency, according to a filing with the Securities and Exchange Commission.

Chiron, which has its headquarters in California and manufactures drugs in a number of locations around the world, shocked the market when it revealed it would not be able to export nearly 48 million flu vaccine doses this month, accounting for nearly half of the expected demand in the US.

Since then, there has been speculation about the way the problems with Chiron's Liverpool plant emerged.

A former SEC lawyer, who is not involved in the case, said the justice department could be concerned about whether there was any delay in the disclosure of the flaws in Chiron's manufacturing processes. The investigation may also look at whether there were any suspicious share trades in Chiron before the announcement of the suspension.

Chiron's shares slumped more than 16 per cent on the day after the export of its vaccine was blocked. Analysts slashed Chiron's profits forecasts by 50 per cent on the news. The vaccine made up about 25 per cent of its annual sales.

The timing of the freeze on Chiron's Liverpool operations, which will last for three months, appeared to take US regulators by surprise. The Food and Drug Administration (FDA) was still deciding on whether to allow the release of the flu vaccine when British authorities stepped in to block the drug being shipped.

A US FDA team was due to visit Chiron's British vaccine plant to carry out its own inspection when the Medicines and Healthcare Products Regulatory Agency made its ruling.

Regulators had focused on Chiron after it warned British and US regulators that its vaccine had been contaminated with a bacteria called Serratia. Both the FDA and the Medicines and Healthcare Products Regulatory Agency inspected Chiron's plant and had telephone contact with the company.

Lester Crawford, the acting commissioner for the FDA, said at the end of last week that the body would probably have come to the same conclusion as the British regulators.

The decision to pull the drug prompted anxiety among American officials because of the country's reliance on Fluvirin.