British regulators gave the go-ahead yesterday for Chiron to resume production of flu vaccine, ending a five-month suspension that caused...

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NEW YORK — British regulators gave the go-ahead yesterday for Chiron to resume production of flu vaccine, ending a five-month suspension that caused widespread shortages in the United States. Chiron’s stock jumped more than 6 percent.

The company said it plans to begin production immediately in anticipation of getting clearance from the U.S. Food and Drug Administration so it can have vaccine available for the flu season starting this fall.

In October, Britain’s Medicines and Healthcare Products Regulatory Agency (MHRA) barred the Emeryville, Calif.-based company from shipping to the United States some 48 million doses of its Fluvirin flu medicine made in its Liverpool, England, factory because of contamination concerns.

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Chiron had been expected to supply nearly half the U.S. vaccine supply for the flu season. The resulting shortage prompted U.S. health officials to put restrictions on who was eligible for flu shots.

The MHRA said inspectors believed improvements had been made and the facility now met satisfactory standards.

“The company has been informed and is now free to recommence full manufacturing of the vaccine,” on the condition that it continue to make improvements at the plant, the agency said.

Chiron said it would provide weekly updates to the regulatory agency. Chiron spokeswoman Alison Marquiss said full production at the Liverpool facility was expected to resume immediately.

“In this new beginning we remain focused on continuing to remediate and improve so Chiron can successfully deliver on the results required to supply influenza vaccine for the 2005-2006 (flu) season,” said Chiron Chief Executive Howard Pien.

Chiron’s shares rose $2.27, or 6.4 percent, to close at $37.69 yesterday.

“Obviously this is positive. And it is quite surprising,” said Eric Schmidt, an analyst at SG Cowen. “Yesterday I thought there would only be a 30 percent to 40 percent chance Chiron would be on the market this year. Now it is up to 80 percent.”

Chiron isn’t out of the woods yet. While U.S. FDA officials has been working closely with British regulators during their inspections, the agency will conduct its own comprehensive review of the facility. It said it considered the actions by British regulators an “extremely important milestone in Chiron’s efforts to supply influenza vaccine for the U.S. market but work remains.”

Standard & Poor’s said Chiron will remain on CreditWatch with negative implications because “this is only a first step toward Chiron’s return to the U.S. influenza vaccine market.” The ratings agency said it was by “no means certain” that Chiron would be back on the market this year.

But Marquiss said the company is proceeding as if it will receive clearance from the FDA, and will begin production. Experts said the company would need to be in production by April to be ready to distribute shots for the 2005-2006 flu season.

Tom Shrader, an analyst with Harris Nesbitt Gerard, said last year’s debacle will likely continue to haunt the company as its problems paved the way for more competitors in the market and the likelihood that fewer people will opt to be vaccinated.

“No one got the flu vaccine this year and no one got the flu,” said Shrader, noting the mild flu season. “It really is a fiasco.”

Shrader worries that may cause fewer people to get the flu shot, which could cut into sales.

This year there may also be new competitors into the flu-vaccine market, which was dominated by Chiron and Sanofi-Aventis. Shrader said more competitors mean lower prices.

Both GlaxoSmithKline and ID Biomedical said they are negotiating with the FDA to sell their respective flu vaccine in the U.S. Glaxo hopes to get approval under an expedited review and sell between 10 million and 15 million doses in the U.S. this year. The company is negotiating with its distributors to sell its vaccine if it is approved.

IB Biomedical spokesman Dean Linden said the company is discussing the prospect of an expedited review that would allow its vaccine on the market this year but said projecting that would happen is “optimistic.” It has signed agreements with three U.S. distributors to sell its vaccine when it is approved.

Last month, Chiron reported a sharp drop in its fourth-quarter and full-year results on the back of the flu-vaccine crisis. For the quarter that ended Dec. 31, the company lost $22.9 million, compared to a profit of $121.8 million a year earlier.