European drug companies are getting ready to work on new
medicines and ramp up production of existing ones to be ready to
help combat the possible worldwide outbreak of a new deadly flu
strain.
Europe's leading vaccines makers said Monday they are ready to
start developing a vaccine against the swine flu virus that emerged
in Mexico last week, while Roche Holding AG (ROG.VX), the maker of
an existing flu treatment, said it could quickly ramp up production
of its viral drug Tamiflu if necessary.
Swiss drugmaker Novartis AG (NVS) has been contacted by the
World Health Organization about the development of a vaccine that
would protect against the deadly flu strain that emerged in Mexico
last week, a company spokesman said.
The Basel, Switzerland-based drugmaker has already received some
preliminary information about the swine flu virus, but will need a
sample of the virus to get started on developing a vaccine,
Novartis spokesman Eric Althoff said.
"The WHO and the CDC have reached out to us, and we are in
contact with them and other health authorities about the
development of a vaccine," he said.
Novartis expects to get the virus strain soon, enabling it to
start work on a vaccine.
It typically takes between three and six months to produce a new
vaccine, but it is too early to tell how long it will take to get
one for swine flu, Althoff said.
The Swiss drugmaker has developed pre-pandemic vaccines that
could easily be converted into a new one, but these products were
based on the H5N1 bird flu strain which spread in Asia a few years
ago. This virus was widely believed to be a likely root for a flu
pandemic.
Given the recent outbreak of a deadly flu strain in Mexico, this
new virus - which is based on a different strain known as H1N1 -
now looks like the biggest risk for a pandemic.
In Paris, Sanofi-Aventis (SNY) Monday said it "stands ready to
assess its capabilities to support public health efforts should the
WHO and other health authorities request support from influenza
vaccine manufacturers," a spokesman said.
So far, Sanofi hasn't been asked to start developing a human
vaccine against swine flu, he added.
The two drug companies benefitting most at the moment from
spreading pandemic flu worries are Roche Holding AG (ROG.VX) of
Switzerland and U.K.-based GlaxoSmithKline PLC (GSK).
Each company has an antiviral drug in its portfolio, which can
shorten the duration of the illness and can possibly also help
protect people against contracting flu in the first place. Sales of
these drugs started skyrocketing in late 2005, when health
officials worldwide worried that a strain of bird flu that had
emerged in Asia could result in a global epidemic.
At 1300 GMT Monday, Roche shares were up CHF5.30, or 3.8%, at
CHF144.90, while shares of GlaxoSmithKline were 32 pence higher, or
3.2%, at 1039 pence each. The European healthcare sector as a whole
was 1.7% higher.
In the U.S., shares of Gilead Sciences (GILD), which initially
developed Tamiflu and receives royalties from its sales, were up
4.3% to $47.75.
Earlier this month, Gilead reported that royalties on Tamiflu
dropped to $33 million for the first-quarter 2009, from $93 million
in 2008. Roche had seen a similar slump in demand for its flu drug,
because governments had largely completed their stockpiling of the
product in preparation for a possible flu pandemic.
Roche has the key ingredients in place to quickly ramp up
production of its antiviral drug Tamiflu, which may help contain
the damage of the spreading swine flu virus, spokeswoman Martina
Rupp said.
Roche's Tamiflu drug appears to be effective in the swine flu
strain that emerged in Mexico, the World Health Organization said
over the weekend.
Roche, based in Basel, so far hasn't yet received any new big
orders for its drug, spokeswoman Martina Rupp said.
Such orders will probably hinge on how the WHO classifies the
new flu outbreak, she added.
A WHO panel will convene Tuesday to consider whether to raise a
global pandemic alert, a move that would signal that a new virus is
causing large outbreaks and that governments should prepare for
widespread transmission.
Roche had scaled up Tamiflu production a few years ago when
health care experts feared a new bird flu strain that emerged in
Asia could develop into a deadly disease for humans.
Back then, governments started to buy Tamiflu in bulk, because
the drug doesn't only shorten the duration of the disease but it
also can help protecting against getting it in the first place.
At the peak, Roche had the capacity to produce 400 million
packages of Tamiflu a year, but that capacity has been scaled down
recently after demand for the drug declined sharply.
Roche, however, kept big stocks of the drug's key ingredients,
which will enable it to ramp up production quickly, Rupp said.
Still, because of the complicated manufacturing process, it
takes about eight months to produce the drug from scratch, she
added.
In 2008, Tamiflu generated sales of around 609 million Swiss
francs ($535 million).
Analysts estimate that the drug generated around CHF4 billion in
pandemic sales in 2006 and 2007. Roche declines to provide specific
numbers, saying that many governments prefer to keep the size of
their orders confidential.
GlaxoSmithKline declined to comment immediately on the possible
impact on production and sales of its flu drug Relenza from the
current flu outbreak.
In Australia, Biota Holdings Ltd. (BTA.AU), the original
developer of Relenza, ended 81.6% higher Monday.
Company Web Site: http://www.novartis.com
http://www.roche.com
http://www.sanofi.com
-By Anita Greil, Dow Jones Newswires; +41 43 443 8044 ;
anita.greil@dowjones.com
(Geraldine Amiel in Paris and Sten Stovall in London contributed
to this article)