The acquisition of leading vaccine producer Chiron continues Swiss drugmaker Novartis' expansion in the growing Chinese vaccine market. Chiron will now be known as Novartis Vaccine. The company will focus its efforts on providing vaccines to Shanghai.

Starting in 2007, Novartis will introduce flu vaccines developed specially for older and high-risk patients, as well as the latest cell-culture flu vaccine and an H5N1 avian flu vaccine for humans in China.

Novartis Vaccine and the Shanghai Institute of Biological Products are the only two providers that won the city's health bureau 2005-06 flu vaccine bid.

Last year, Chiron provided 30,000 flu vaccines, only a small portion of the 300,000 needed. But as fears over bird flu continues to escalate, the global need for flu vaccines has increased 30 percent, and vaccine manufacturers have increased their output.