WHO chief warns H1N1 swine flu likely to worsen

* Chan says H1N1 could mutate in "unpredictable ways"

* Japan relaxes flu measures, but prepares big aid project

* U.S. gives companies $1 billion to start vaccine

* Gene analysis shows virus lurked undetected

(Updates with vaccine news and genetic studies)

GENEVA, May 22 (Reuters) - The world must be ready for H1N1 swine flu to become more severe and kill more people, World Health Organization chief Dr. Margaret Chan said on Friday.

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