by Michelle Fay Cortez and Jason Gale

“This was infected with a bird flu virus,” Rosenberger said. “There were some people from the company who handled it.”

The material was intended for use in laboratories, and none of the lab workers have fallen ill. The incident is drawing scrutiny over the safety of research using the H5N1 bird flu strain that’s killed more than three-fifths of the people known to have caught the bug worldwide. Some scientists say the 1977 Russian flu, the most recent global outbreak, began when a virus escaped from a laboratory.

The virus material was supposed to contain a seasonal flu virus and was contaminated after “human error,” said Christopher Bona, a spokesman for Baxter, in a telephone interview.

SANITIZED

Baxter “moved very quickly to sanitize and protect employees,” Bona said. “Labs have been sanitized, potentially contaminated materials have been destroyed and employees were tested and considered not to be at risk.”

Baxter gained 93 cents, or 1.6 percent, to $58.27 at 4 p.m. in New York Stock Exchange composite trading, and has lost 2.3 percent over the last 12 months.

The Austrian health ministry reported the incident to the European Union and is conducting its own audit, Rosenberger said. In response, Baxter said it has put in place “preventive and corrective” measures that the ministry found satisfactory. The vaccine has been destroyed, according to Rosenberger.

The World Health Organization “is aware of the situation and is consulting with the ministers of health of the countries involved to ensure that all public risks arising from this event have been identified and managed appropriately,” said Gregory Hartl, a spokesman in Geneva.

EUROPEAN AGENCIES

The European Medicines Agency has no immediate comment, said Monika Benstetter, an agency spokeswoman. The U.S. Centers for Disease Control and Prevention, which distributes seasonal flu viruses to companies for vaccine manufacturing, isn’t investigating or providing consultation, said Tom Skinner, a spokesman for the Atlanta-based agency. The CDC is staying in touch with the European Centre for Disease Prevention and Control regarding the incident, Skinner said.

The H5N1 strain of avian flu has been monitored by health officials around the world for more than a decade for signs it could mutate into a form that is easily spread among humans. Currently, it passes mainly among infected poultry.

A flu pandemic of avian or other origin could kill more than 70 million people worldwide and lead to a “major global recession” costing more than $3 trillion, according to a worst-case scenario outlined by the World Bank in October.

H5N1 has infected at least 408 people in 15 countries since 2003, killing 63 percent of them, according to the Web site of the Geneva-based WHO.

FLU PANDEMIC

BioTest s.r.o, a Czech biotechnology company, was conducting research for a company called AVIR Green Hills Biotechnology using materials supplied by Baxter. The company was “supposed to get non-infected testing vaccine, which was by mistake of the supplier contaminated with the H5N1 virus,” BioTest said in a statement last week.

AVIR Green Hills monitored its lab workers for signs of illness and got access to Roche Holding AG’s Tamiflu antiviral in case of infections, said Birgit Kofler-Bettschart, a spokeswoman for the closely held, Vienna-based company. AVIR Green Hills sanitized its laboratories, destroyed potentially contaminated samples, and told health officials, she said in an e-mail today.

Three influenza pandemics, including the 1918 Spanish flu that killed more than 50 million people, have occurred since 1900.

THREATS

Another three pandemic threats — situations where a global epidemic is close to occurring — have occurred.  One was the Russian flu of 1977.

The H5N1 virus, “even if it were let out of the lab, would be only lethal for birds in its present state,” said Ilaria Capua, a veterinary virologist, whose laboratory in Padova, Italy, handles some of the avian-flu screening for the World Organization for Animal Health. Capua said she has no knowledge of the situation. “In Europe, we can react fast” to outbreaks of the disease in animals, she said.

Baxter, the world’s largest maker of blood-disease treatments, is one of the companies working on a vaccine to be used in case of a flu pandemic. The European Medicines Agency recommended approval of Baxter’s Celvapan, the first cell culture-based vaccine for bird flu in Europe, in December.