Chiron Corp.’s vaccine division, which has been plagued with manufacturing troubles over the last two years, took another hit with the recall of its Morupar MMR vaccine for preventing measles, mumps and rubella in the developing world.

The Emeryville, Calif.-based company said it’s withdrawing the vaccine and recalling unused doses after routine pharmacovigilance surveillance in Italy showed a higher rate of adverse events following immunization with Morupar MMR compared to other vaccines.

Those events mostly included fever, allergic reactions and swelling of the glands, and did not pose long-term health risks for patients.

Chiron said it intends to work with the World Health Organization to conduct a risk-benefit analysis of the vaccine.

In 2005, the company supplied 5 million doses of Morupar MMR, mostly to developing world markets through the United Nations Children’s Fund and the Pan American Health Organization, with doses also supplied to the Italian market.

While hardly the company’s top-selling product - Morupar sales totaled about $10 million in 2005 - the news adds to the list of the company’s vaccine problems, starting with the 2004 failure to provide any of the projected 46 million to 48 million doses of its Fluvirin flu vaccine to the U.S. market due to contamination problems at its Liverpool, UK, manufacturing plant. Last July, Chiron said it would not be able to provide its Begrivac flu vaccine to German and UK markets for the year after some lots made at the Marburg facility in Germany failed to meet product sterility specifications. (See BioWorld Today, Oct. 6, 2004, and July 21, 2005.)

With the Morupar withdrawal, Chiron wrote off about $6 million of inventory in 2005 and recorded about $1.7 million of product returns. It also revised its 2005 earnings per share to $1.31, down from the $1.34 EPS reported Jan. 31.

Chiron shareholders are expected to meet next month to vote on an acquisition bid by Basel, Switzerland-based Novartis AG, which offered to buy out the 58 percent of Chiron it does not already own. If approved, Novartis would purchase remaining outstanding shares for $45 apiece in a deal valued at about $5.1 billion. (See BioWorld Today, Nov. 1, 2005.)

Shares (NASDAQ:CHIR) closed at $45.51 Thursday, down 19 cents.

Firms Combine In Vaccine Venture

Two other companies made news in the vaccine arena when they agreed to unite their respective businesses into a pure-play vaccine operation.

Avantogen Ltd. and Hawaii Biotech Inc. plan to merge in a 50-50 ownership deal to create an as yet unnamed company to focus exclusively on prophylactic and therapeutic vaccine development. The agreement stems from a previous collaboration between the companies involving Avantogen’s immunostimulatory adjuvant GPI-0100 licensed for use in Hawaii Biotech’s West Nile vaccine program.

Under the terms, Avantogen will bring to the mix its Pentrys cancer vaccine program, now in Phase II, and its Phase I-stage vaccine adjuvant program, along with the company’s senior management team and $3.5 million in cash.

Hawaii Biotech will contribute its vaccine research and development team, preclinical vaccine programs and facilities, grant funding and $1 million in cash.

The new company will operate out of Avantogen’s headquarters in San Diego and Hawaii Biotech’s vaccine laboratories in Oahu, Hawaii. Leonard Firestone, Avantogen’s CEO, will head the combined company.

Hawaii Biotech’s CEO, David Watumull, will serve as CEO of a spinout firm to continue work on the Hawaiian company’s anti-inflammatory small-molecule development business.

The deal is expected to close in late April.

To fund its share of the transaction, Avantogen plans to raise money through a shareholders non-renouncable rights issue. Proceeds are expected to total A$5.7 million (US$4.2 million).

Remaining funds will be used to complete the merger of Avantogen’s oncology program, RP101, with Innovate Oncology Inc., of New York. In that deal, announced last month, Avantogen agreed to contribute $1.1 million in exchange for 32 million shares of Innovate. At the transaction’s close, Avantogen will own about 54 percent of the oncology company.

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