July 16 (Bloomberg) -- Demand is so great for swine flu vaccines that some manufacturers are rejecting orders and will be able to sell as much as they produce, said Robert Parkinson Jr., chief executive officer of Baxter International Inc.

Baxter, based in Deerfield, Illinois, has contracts with five countries for 80 million doses and has stopped taking new orders that it may not be able to fill, Parkinson said today in a call with investors. The swine flu pandemic will be a boon to the company this year and mutations in H1N1 and other strains may create a lasting new business for the company, he said.

The illness is sweeping the southern hemisphere during its usual flu season as tens of thousands of patients test positive for the virus in Australia, Argentina, Chile and other countries, the World Health Organization said. Swine flu isn’t yielding as much vaccine in labs as a typical seasonal strain, hindering efforts to meet expected needs in October when the outbreak pushes north, Parkinson said.

“There will be demand for whatever we’re able to produce,” Parkinson said today in the conference call. “What we’re able to produce in the long term -- it’s too early to quantify that.”

Baxter rose $1.65, or 3 percent, to $54.74 at 4 p.m. in New York Stock Exchange composite trading.

Companies working on swine flu vaccines include Sanofi- Aventis SA, based in Paris, GlaxoSmithKline Plc and AstraZeneca Plc, both based in London, CSL Ltd. of Melbourne and Novartis AG, based in Basel, Switzerland.

Industry Challenged

“The industry at large is challenged,” Parkinson said. “The world is in the process of recognizing that the threat of pandemic is with us and will likely stay with us.”

Baxter has received pre-approval for its vaccine production method, and additional tests of the vaccine in humans will be necessary, Deborah Spak, a Baxter spokeswoman, said today in a telephone interview. The company doesn’t have any contracts to sell the vaccine in the U.S.

Most manufacturers make the vaccine by injecting chicken eggs with an approved version of the virus to provide nutrients for the virus to grow and multiply. The amount of virus that grows in the egg and can be turned into shots is called its yield.

The yield from the pandemic flu is lower than that from typical seasonal varieties, according to Baxter’s Parkinson and Len Lavenda, a spokesman for Sanofi. Lower yields make vaccine production more difficult and may lead to shortages in the fall, they said.

Injecting Eggs

Sanofi will continue to inject more eggs with the virus, hoping the virus will become better adapted to growing in eggs, Lavenda said. Sometimes additional passes through eggs produce higher yields, he said.

Sanofi has received two orders of vaccine from the U.S., totaling about $251 million, Lavenda said. That doesn’t buy the U.S. a specific number of shots. Instead, it secures the country access to raw vaccine materials. The number of shots produced will vary by the amount of virus it takes to vaccinate a person and whether an additive that enhances a vaccine’s effectiveness, known as an adjuvant, can be used.

Sanofi said today it received an order from France for 28 million doses, with an option for 28 million more doses.

About six of every 10 Americans believe that it is at least somewhat likely there will be widespread cases of swine flu with people getting very sick during the next flu season, according to a poll released today at the Harvard School of Public Health in Boston.

Americans Prepare

That suggests most Americans will support preparations for a pandemic, said Robert J. Blendon, professor of health policy and political analysis at Harvard. So far, the U.S. Health and Human Services Department has spent about $1.88 billion to develop ingredients for a pandemic flu vaccine, according to an agency statement on July 13.

The U.S. government took the unusual step of purchasing all of the swine flu vaccine for the country. Patients probably will require multiple shots to provide immunity from the new virus, health officials said at a meeting on June 26 at the U.S. Centers for Disease Control and Prevention. The agency estimated that clinical trials will begin in August, and at least 50 million vaccine doses will be available in the U.S. by Oct. 15.

To contact the reporter on this story: Tom Randall in New York at trandall6@bloomberg.net.

Last Updated: July 16, 2009 16:10 EDT