The company that makes half the U.S. supply of the influenza vaccine announced Tuesday it won't be able to provide any flu shots for the upcoming season.

Because of unspecified problems in its manufacturing plant in Liverpool, England, Chiron Corp.'s (CHIR) license was suspended by British health officials. Chiron makes the flu shot under the brand name Fluvirin (search).

"We profoundly regret — we profoundly regret — that we will be unable to meet health needs this influenza season," said Chiron's President, CEO and Chairman Howard Pien at a Tuesday press conference.

The news means the United States will face "a significant shortage" of flu vaccines, said Dr. Anthony Fauci, the National Institutes of Health's (search) infectious disease chief.

American vaccine experts suggested shots this year would likely be rationed.

British authorities suspended the California-based Chiron's license for three months because of problems at its vaccine manufacturing Liverpool plant, which primarily supplies the American market.

The action means the company can't supply any flu vaccine during that time, and Chiron said it would provide no U.S. vaccine this year.

British officials didn't explain details for the license suspension.

Flu shot campaigns usually start in October, a month before the flu season typically begins in the United States. In an average year, flu kills 36,000 Americans and hospitalizes another 114,000, mostly the elderly.

"Our immediate focus will be on making sure that the supply we do have reaches those who are most vulnerable," the U.S. Department of Health and Human Services (search) (HHS) said in a statement it released Tuesday.

It's unlikely that other manufacturers could fill the gap. Aventis Pasteur (search), which expects to supply about 52 million doses, said earlier that federal officials had asked it to make additional vaccine but that it already was at capacity and couldn't produce more until after November when existing orders are filled.

A third manufacturer, MedImmune (MEDI), which makes FluMist (search), a new nasal spray flu vaccine for use in healthy 5- to 49-year-olds, said it couldn't produce more than the 1.5 million doses it had planned to make for this year's flu season. That vaccine is made from modified live virus and isn't considered safe for the elderly or people with medical problems.

HHS said in its statement that it anticipated having about 54 million doses of the Aventis vaccine and one to two million doses of the FluMist nasal spray. The department said it had planned for a vaccine supply of about 100 million doses this season after last season's demand of about 87 million doses.

Chiron officials said the British action came because of broad concerns about standards at the Liverpool factory, not just worries about the safety of already-produced vaccine.

"We have worked diligently to solve this problem since it first arose," Pien said. "We reaffirm Chiron's long-term commitment to the influenza vaccine mark and will take all the necessary actions to ensure an adequate supply for the 2005-2006 season."

Pien said safety tests on its vaccine were nearly complete, safety concerns seemed to be resolvable, and the company had been talking with the U.S. Food and Drug Administration (search) and its British counterpart about shipping its vaccine.

"The FDA were generally comfortable," but the British agency "has come to a different conclusion," Pien said before Tuesday's news conference.

The company has no obligation to recall or withdraw any vaccine, but none has been released anywhere, and none will be this season, Chiron officials said.

U.S. health officials were caught off-guard, learning of the developments only during a midmorning phone call. "We need to regroup," Fauci said shortly afterward.

Chiron had planned to ship 46 million to 48 million doses, but that already had been delayed by a contamination problem discovered in August in the English factory where the vaccine is made. At the time, the company said only 4 million doses were tainted but that the entire supply would be held up and re-tested.

About 1 million doses already had arrived in the United States, but now even that won't be made available because of the British safety concerns.

"Clearly, the loss of the Chiron flu vaccine poses a serious challenge to our vaccine supply for the upcoming flu season," the HHS statement said. "The department has begun pursuing contingencies for this loss of supply."

Pien refused to identify the contaminant in Chiron's vaccine but said that "it relates to what amounted to human error in a relatively late step in a fairly complicated series of manufacturing procedures."

Less than two weeks ago, top U.S. health officials assured the public that close FDA monitoring of the rest of Chiron's supply suggested it was fine and that there would be plenty of supplies.

Dr. Walt Orenstein, formerly the top flu expert at the U.S. Centers for Disease Control and Prevention (search) and now the associate director of the Emory Vaccine Center (search), said the government may have to ration available vaccine.

"It's a very serious concern. We're already in October, which is vaccine season. If we have to ration at this stage, it becomes more complicated."

Worldwide, Chiron is the second leading flu vaccine manufacturer, behind French pharmaceutical company Aventis, which makes about 45 percent or 50 percent of the world's supply, said Dr. Klaus Stohr, the World Health Organization's (search) influenza chief.

Chiron, based in California, makes four influenza vaccines, including Fluvirin, the top flu vaccine in Northern Europe and the No. 2 vaccine in the United States.

Chiron Corp. officials cut the company's expected profits by more than half Tuesday. Trading in Chiron's stock on the Nasdaq Stock Market was temporarily halted Tuesday morning. Share price dropped $7.79 a share, or 17 percent, to $37.63 after trading resumed.

The timing of the license suspension is particularly worrying because vaccine production goes in cycles. The manufacturing cycle for the Northern Hemisphere vaccine finished in August and manufacturers are now gearing up to make the shots for the Southern Hemisphere.

Vaccine makers do not have a lot of spare stock because they produce on demand.

FOX News' Catherine Donaldson-Evans and The Associated Press contributed to this report.