The Centers for Disease Control has finalized itsrecommendation, first announced in February, that all infantsbe routinely vaccinated against hepatitis B.

The action could boost revenues of vaccine developers ChironCorp. (NASDAQ:CHIR) and Biogen Inc. (NASDAQ:BGEN). TheNational Center for Health Statistics estimates that 4.2 millionbabies were born in the United States in 1990.

Chiron of Emeryville, Calif., has licensed its recombinantvaccine technology to Merck, Sharp & Dohme. Cambridge,Mass.-based Biogen has licensed its technology to SmithKlineBeecham. Merck and SmithKline have a cross-licensingagreement.

According to the CDC, the incidence of acute hepatitis Bincreased by 37 percent from 1979 to 1989, and an estimated200,000 to 300,000 new infections occurred annually duringthe period of 1980 to 1991.

For Chiron, which is developing a hepatitis C vaccine, theendorsement of infant vaccination is even more important thanany anticipated increase in hepatitis B royalties, saidspokesman Larry Kurtz. "When we launch the hepatitis Cvaccine about five years from now, this opening of the marketwill help us," Kurtz said.

Neither company breaks out its hepatitis B royalties, but Kurtzsaid Merck and SmithKline sold more than $200 million worthworldwide in 1990. Chiron estimates the market for hepatitis Cwill be about the same as for hepatitis B.

"The question is when the government will fund it and howmuch money they'll put in the budget," said Kenneth Bates,Biogen chief financial officer. -- KB

(c) 1997 American Health Consultants. All rights reserved.