A Meriden-based company's $147 million plan to use caterpillar ovary cells to make swine flu vaccines ran into a little hitch last week when a federal advisory panel warned there isn't enough information available for the company's vaccine to be declared safe for use.

A Protein Science Corp. official responded by warning the company could take its caterpillars and its production of the vaccine called FluBlok outside the United States — something that wouldn't make Connecticut officials at all happy and could cost the company a whole lot of federal money.

"Clinical trials of our swine flu vaccine went very well in Australia," the company's chief operating officer, Manon Cox, told Agence France Presse. "What can I say? We will probably do licensure in Australia."

But a spokeswoman for the U.S. Department of Health and Human Services said progress toward getting federal approval of the vaccine is "the essential requirement" for Protein Services to get the rest of its $147 million in federal funding.

The Federal Drug Administration's advisory panel found the company's clinical trials weren't large enough for the committee to reach a finding that the vaccine was safe.

That raises the sticky question of what might happen to the company's $147 million in federal contracts if it didn't get the approval of the Federal Drug Administration. Apparently Protein Science officials didn't feel like answering that. Repeated requests for an interview concerning this story went unanswered.

Experts say the FDA usually follows the recommendations of its advisory panels. It was unclear whether the company would have a chance to offer more evidence demonstrating the safety of its vaccine. Even if Protein Science's vaccine is approved, it wouldn't be available for use in this year's flu season. It could theoretically be ready for 2010.

Pat El-Hinnawy, a spokeswoman for the FDA, said failure to achieve licensing by her agency would mean the vaccine couldn't be used in the U.S. "If it's licensed in Australia, it can be used in Australia," she said.

El-Hinnawy said she couldn't comment on what will happen next with Protein Science. "In general, there's always an ongoing consultation or dialog between the FDA and a company to try and move things forward," she said.

Dr. Michael Cappello, a professor of pediatrics and public health at the Yale School of Medicine, said most pharmaceutical companies and vaccine producers "look to the U.S. as the primary driver" in the market.

"The challenge is that in this country we have a very rigorous process for evaluating safety," Cappello said.

The company has received a $35 million federal contract to develop and test the vaccine. The contract could be extended over five years and would then be worth $147 million.

Part of that $35 million was intended to expand the Protein Science's Meriden facilities.

"The contract requires [Protein Services] to develop plans for building a domestic manufacturing facility capable of manufacturing, testing, packaging and releasing the first lot of pandemic vaccine within 12 weeks" of the start of a flu pandemic, HHS spokeswoman Gretchen Michael said in an email.

Protein Science is one of a number of firms attempting to come up with faster ways to produce flu vaccines than the old-style system of using chicken eggs to grow the virus. The egg system has been blamed in part for the shortages of swine flu (H1N1) vaccine in the U.S. and other nations.

The Protein Science system produces a vaccine within two months by injecting flu genes in an insect virus, which is then incubated in caterpillar ovary cells. The program is reportedly capable of producing 100,000 doses of vaccine a week.

"The technique holds great promise," Cappello said.