CHIR Chiron (MM)

Chiron Corporation (NASDAQ:CHIR) today announced that it has entered into a supply contract with the UK government for pre-pandemic influenza vaccine(1) for a stockpile based on the H5N1 avian influenza virus strain. Health authorities have identified H5N1 avian influenza as a strain with pandemic potential. Under the UK contract, Chiron has agreed to supply the British government with H5N1 avian influenza vaccine containing Chiron's MF59 adjuvant. An adjuvant is a substance that is added to a vaccine to boost the body's immune response to the vaccine's active constituent, called the antigen. Delivery of the stockpile remains subject to internal and regulatory release procedures. The UK stockpile vaccine is based on an inactivated influenza strain similar to the H5N1 avian subtype that has circulated throughout Southeast Asia and more recently in Central Asia and parts of Europe. Chiron will produce vaccine for this stockpile at its manufacturing facilities in Italy. As part of its avian influenza vaccine strategy, Chiron expects that it can manufacture avian influenza vaccines during the traditional break between seasonal influenza vaccine campaigns, finishing these activities in time for the seasonal influenza vaccine production to avoid interruption of the normal manufacturing cycle. As with other influenza manufacturers participating in stockpiling efforts, Chiron has also submitted a "mock-up" file for pandemic influenza vaccine containing its MF59 adjuvant to the European Medicines Agency (EMEA). The mock-up file lays the groundwork for potentially a more rapid approval of a vaccine once a pandemic occurs. As part of this process, Chiron has submitted to the EMEA information on its regulatory and development work for a pandemic influenza vaccine. Chiron's mock-up file is based on previous avian influenza vaccine clinical studies and will be augmented with an upcoming study of H5N1 vaccine to take place in Italy this year. All of the studies for the mock-up file involve Chiron's MF59 adjuvant. Assuming the mock-up file gains approval, in the event of a pandemic Chiron could submit a revision to the mock-up file for the relevant pandemic strain. About Chiron Chiron delivers innovative and valuable products to protect human health by advancing pioneering science across the landscape of biotechnology. The company works to deliver on the limitless promise of science and make a positive difference in people's lives. For more information, please visit www.chiron.com. About Chiron Vaccines Chiron Vaccines, the world's fifth-largest vaccines business, is headquartered in Oxford, United Kingdom, and has facilities located throughout Europe, the United States and Asia. Chiron Vaccines is the world's second-largest manufacturer of flu vaccines and has important meningococcal, pediatric and travel vaccine franchises. The company's portfolio of products includes vaccines for influenza, meningococcus C, rabies, tick-borne encephalitis, Haemophilus influenzae B (Hib), polio, mumps, measles and rubella (MMR) and diphtheria, tetanus and pertussis (whooping cough). This news release contains forward-looking statements, including statements regarding development and manufacturing of pandemic influenza vaccines and adjuvants, revenue from stockpiling programs, production and release of stockpile H5N1 vaccine for the United Kingdom, regulatory approvals, and the successful and timely completion of the internal and regulatory release procedures, which involve risks and uncertainties and are subject to change. A discussion of the company's operations and financial condition, including factors that may affect its business and future prospects that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, is contained in documents the company has filed with the SEC, including the Form 10-K for the year ended December 31, 2004, and the Form 10-Q for the quarter ended September 30, 2005, and will be contained in all subsequent periodic filings made with the SEC. These documents identify important factors that could cause the company's actual performance to differ from current expectations, including, among others, litigation and investigations relating to influenza vaccines, the outcome of clinical trials, regulatory review and approvals, manufacturing capabilities and issues, intellectual property protections and defenses, litigation, stock-price and interest-rate volatility, and marketing effectiveness. In particular, there can be no assurance that additional issues with respect to influenza vaccines or Chiron's manufacturing generally will not arise in the future, or that Chiron will be able to successfully develop, manufacture and receive approval to market new products (including H5N1 and other pandemic influenza vaccines), or achieve market acceptance for such new products, or that the internal and regulatory release procedures for the UK stockpile will be completed timely or successfully. The company may face additional competition in the influenza market in the future and challenges in distribution arrangements as a result of vaccine developments. Chiron does not undertake an obligation to update the forward-looking information the company is giving today. (1) The stockpile vaccine is for government supply and is not approved for general sale.