Global Processing

Flu a windfall for some drugmakers, shares jump

April 27, 2009
The threat of a pandemic triggered by a new flu strain that has killed more than 100 people in Mexico will provide a windfall for some makers of drugs and vaccines, according to Reuters. Switzerland''s Roche Holding AG and Britain''s GlaxoSmithKline Plc are the two big pharmaceutical groups set to benefit most as governments and corporations step up orders for their drugs Tamiflu and Relenza. Shares in the two companies rose 4- and 3-percent respectively in early trade, while stock in Australia''s Biota Holdings Ltd, which licensed Relenza to Glaxo, soared 82 percent. But analysts cautioned that the commercial impact would be muted by the fact that many governments had already placed substantial stockpile orders because of the previous threat posed by avian flu. Relenza, known generically as zanamivir, and Tamiflu, or oseltamivir, have both been shown to work against the new flu strain, which has spread to the United States and as far as New Zealand. Roche said it was working on scaling up production of Tamiflu but noted that the lead-time for the drug from synthesis of the product to packaging was eight months. The World Health Organization (WHO) has not yet asked Roche to deploy 3 million treatment courses it has as a "fire blanket" to use wherever a pandemic breaks out, a spokeswoman for the company said. The WHO also has an additional 2 million packs that Roche donated in the past for use in countries that are not so well prepared for a pandemic. Demand has historically been greatest for Tamiflu, which is given as a convenient tablet, while Relenza must be inhaled. Recently, though, Glaxo''s product has been winning more business as buyers diversify their medicine reserves. In the first quarter of 2009 sales of Relenza into government stockpiles -- notably Britain and Japan -- outstripped those for Tamiflu. The flu outbreak, which poses the biggest risk of a large-scale pandemic since avian flu surfaced in 1997, will also fuel demand for vaccines from major producers like Sanofi-Aventis SA, Glaxo, Novartis AG and Baxter International Inc., although making shots against the new strain will take months.