Clearing the path to manufacture flu vaccine for the 2005-2006 influenza season, Chiron Corp. received the green light from the FDA to produce Fluvirin at its Liverpool, UK, facility.

But the Emeryville, Calif.-based company might now find itself facing more competition: The FDA approved GlaxoSmithKline plc's Fluarix Wednesday, and ID Biomedical Corp.'s Fluviral is under review.

Chiron failed to provide the U.S. with 46 million to 48 million flu shots last year because British health authorities shut down the manufacturing plant over sterility issues. The suspension left the U.S. with a serious shortage of flu vaccine, forcing doctors to ration it out to those at risk, and giving competitors an opportunity to step in. (See BioWorld Today, Oct. 6, 2004.)

Since then, Chiron has worked with the FDA and the UK Medicines and Healthcare products Regulatory Agency (MHRA) to address the manufacturing problems. The MHRA lifted its suspension in March. (See BioWorld Today, March 3, 2005.)

Now, the FDA has given its approval after conducting a Good Manufacturing Practices (GMP) inspection of the Liverpool facility in July. The agency said in its report that Chiron's proposed corrective actions are "generally acceptable."

That means Chiron can produce Fluvirin for the 2005-2006 season from Liverpool - the only site approved to supply the company's vaccine to the U.S. But the supply expected this year will be half of what was expected last year - only about 18 million to 26 million doses.

In addition, Chiron made several improvements to its Fluvirin vaccine facilities, equipment and processes, which will require the company to get supplemental FDA approvals before it supplies the vaccine to the U.S. market. The MHRA also might choose to inspect the Liverpool facility once more before Chiron can ship any Fluvirin vaccine.

Chiron's stock (NASDAQ:CHIR) rose 31 cents on Wednesday to close at $36.44. Analyst Jennifer Chao, of New York-based Deutsche Bank Securities Inc., said in a research note that an FDA nod "represents an incremental positive." She estimates Fluvirin sales of $160 million (22 million doses) in 2005, and $260 million (32 million to 35 million doses) in 2006.

"That said, as a result of Chiron's major manufacturing misstep in the 2004-2005 [season] and subsequent entry flu vaccine players, including ID Biomedical and Glaxo," Chao said, "Chiron's U.S. flu vaccine business may face significant competition in the longer term."

Last year's shortage highlighted a U.S. need to diversify vaccine suppliers. ID Biomedical, of Vancouver, British Columbia, has supplied more than 75 percent of flu vaccine to the Canadian public market with its product, Fluviral. The company began expanding its manufacturing site last year so it could enter the U.S. market. Fluviral is a fast-track product in the U.S. If approved, ID Biomedical expects to produce about 20 million to 25 million doses for the U.S. market next year and about 40 million doses in 2007.

The FDA on Wednesday approved London-based GSK's Fluarix, making it the first vaccine approved using the agency's accelerated approval process. That process was created so that products treating serious or life-threatening illnesses could be approved based on the achievement of an endpoint that likely would predict ultimate clinical benefit.

About 200,000 people in the U.S. are hospitalized from flu complications each year, and about 36,000 people die from the infection.

Fluarix has shown safety and efficacy in four clinical studies involving about 1,200 adults. GSK expects to conduct further clinical studies to verify Fluarix's clinical benefit.

"FDA's approval of Fluarix is a big step toward providing adequate supply of flu vaccine for the American public," said Mike Leavitt, secretary of Health and Human Services, in a statement. "Having more manufacturers of influenza vaccine licensed in the U.S., and having more vaccine dosages, is critical to public health."