France cuts swine flu vaccine order from Novartis

ZURICH (Reuters) - France has canceled 7 million doses of swine flu vaccine from Novartis, just under half the amount ordered, the Swiss drugmaker said on Friday.

The French government said on Monday it aimed to cancel 50 million of the 94 million doses ordered from Sanofi-Aventis, GlaxoSmithKline, Novartis and Baxter International because of over-supply, adding it was discussing the cuts with suppliers.

Demand for the H1N1 pandemic vaccine has been lower than expected across Europe due to skepticism about the need for immunization among the general population and that fact that a single dose, rather than two, is required for immunity.

France had originally ordered 16 million doses from Novartis, company spokesman Eric Althoff said.

"Novartis will evaluate government requests on a case by case basis within the framework of the contractual agreements which we consider binding," he said.

France's decision comes after Germany, Spain and Switzerland also took steps to try to cut deliveries, return unwanted stocks to suppliers or sell them on to other countries due to a low uptake at home.

Novartis last year forecast H1N1 vaccine sales of $400-$700 million in the fourth quarter after booking sales of $17 million in the third quarter.

The group will give an update on figures when it reports its fourth-quarter results on January 26.

Sales of H1N1 vaccines have been a windfall for drugmakers since mid-2009 as governments have built up stockpiles, with Glaxo expected to be the single biggest beneficiary with anticipated sales of some $3.5 billion by the end of the first quarter of 2010, according to industry analysts.

The latest cancellations in Europe could trim those numbers, but there is still strong demand from other parts of the world.

"Apart from (France) there have not been any other firm cancellations. The U.S. is on track for its 2009 order. Novartis has not bought back any vaccines from governments," Althoff said.

"Novartis is still seeing significant worldwide demand for vaccines -- especially from Latin America, Asia, the Middle East, central European countries and some of the former Soviet countries that did not order last summer," he said.

At 1210 GMT, shares in the group were trading 0.9 percent higher, outperforming a near flat European pharmaceuticals sector.

(Reporting by Katie Reid; Editing by Hans Peters)