Chiron's Mythical Flu Vaccine

In Greek mythology, Chiron was the last of the centaurs, a race of half-man/half-horse creatures. He was also the father of medicine and healing, and it is to him we owe thanks for words such as chiropractor, chiromancy, and chirurgery. During the Battle of the Lipithae, Chiron was accidentally wounded by one of his own poisoned arrows, and rather than live a life of eternal agony, he relinquished his immortality to Prometheus and died.

While Greek mythology is always fascinating, the story of Chiron resonates today with its namesake Chiron (Nasdaq: CHIR), the beleaguered manufacturer of half this nation's flu vaccine. It, too, is a healer that has been wounded by one of its own poisoned arrows: a factory so contaminated that every dose of the flu vaccine it manufactured had to be destroyed, the factory shut, and its license to manufacture revoked.

The question facing it, though, is one its mythological counterpart never had to consider: Are investors relegated to an eternity of agony holding its withered shares, or will it at last heal itself?

The pharmaceutical company's stock has declined more than 30% since the vaccine debacle began. English authorities originally suspended its manufacturing license for three months, and then extended it for another three in an effort to give the company a chance to fully comply with the requirements to reopen. While the ban could be lifted sooner, it could also be made permanent. And if Chiron wants to be able to meet its flu vaccine obligations for 2005, it needs to begin operations by early spring.

While speaking at the J.P. Morgan (NYSE: JPM) Healthcare Conference yesterday, Chiron CEO Howard Pien withheld predictions of when -- or whether -- Chiron would be allowed to start manufacturing again. He noted it would not be until after the first quarter ended in March that it would become clear. That may be too late for flu sufferers since it takes at least six months to manufacture the egg-based vaccine.

But it might not be too late for competitors. Aventis (NYSE: AVE) already supplies the other half of this country's 100 million vaccine doses. Roche Pharmaceuticals and MedImmune (Nasdaq: MEDI) are already stepping up production of their vaccines, and much greater impetus has been given to manufacturers of cell-based versions, such as those made by Crucell (Nasdaq: CRXL) and ID Biomedical (Nasdaq: IDBE).

Chiron is starting a remedial plan that it will implement in stages so that if approval to manufacture is given, the company will be able to begin producing vaccines right away. However, in a display of candor, Pien noted, "We are going to try, but we may not succeed. If we succeed, we may not be able to sustain it. And if we sustain it, we may not enjoy a market position."

We'll need to wait until March, at least, to see whether Chiron, like its legendary equivalent, relinquishes its life, thus allowing investors to invest another day. If not, they may be chained to a rock like Prometheus to live out a life of eternal agony.

Fool contributor Rich Duprey is fascinated by Greek and Roman mythology. He does not own any of the stocks mentioned in this article.