Meningitis Vaccine Vaults Stock
by Kristen Philipkoski
1:15 p.m. March 1, 2000 PST
A meningitis vaccine approved Wednesday in the U.K. has vaulted shares of
biotech company Chiron shares by almost 20 percent.
The British government has granted Chiron a US$100 million contract to
supply Menjugate, a vaccine against a type of meningitis called
meningococcal C disease. Meningitis is a bacterial infection of the lining
of the brain and spinal cord that is often fatal.
The Emeryville, California, company predicts sales of the drug will bring
it $100 million this year.
The approval, along with a positive forecast from a Wall Street securities
analyst, helped boost the stock by 12 points to 62 on Wednesday. Dennis
Harp, an analyst at Deutsche Banc Alex. Brown, said he was giving Chiron's
stock a "buy" rating and a 12-month target price of $74.
Harp also predicted that Chiron's earnings per share would grow 25 percent
annually in "the foreseeable future" due to the biotech company's patent
holdings, promising blood-testing franchise, and the approval of the vaccine.
Chiron also holds several patents on nucleic acid tests for detecting
viruses in blood supplies -- possibly making them the leader in a market
with a worldwide potential of up to $1.2 billion, according to Harp.
Chiron is looking into prospects of marketing the meningitis vaccine in the
U.S. and other countries, said Andria Langenberg, senior director of
clinical research and development at Chiron.
Individuals above 12 months old are now eligible to receive the vaccine as
part of the U.K.'s campaign against meningococcal C disease. Chiron (CHIR)
hopes the drug will soon be approved for infants under one year or age as
The Chiron vaccine, unlike most vaccines currently used for meningitis, is
effective on the immune systems of infants and children under two against
the bacterium that causes the disease.
Studies have shown that the drug is well tolerated and stimulates
long-lasting immunity, the company said.
American Home Products developed the only other vaccine effective on
children under two called Meningitec, which was approved in the U.K. in
On Tuesday the company also announced it had been granted two new U.S.
patents on gene delivery vectors, called alphavirus replicons, that are
being used to develop vaccines targeting hepatitis C and human
immunodeficiency virus (HIV).
The company said the alphavirus replicons are used to deliver genes that
have been shown to stimulate an immune response to protect an individual
against future infection by the disease-causing agent.
Chiron said it was previously issued three similar patents, bringing its
total to five.