more production increases coming??, page-7

Some comments.

The positives for bta are:
1. Significantly increased production of relenza
2. Strong demand for relenza and as a result
3. Prices for relenza are firming
4. Tamiflu resistance
5. LANI as a next generation antiviral


The negatives are:
1. Patent expiry time is now about 4-5 years and not over 10 years when relenza was initially approved.
2. Once vaccines are shown to be safe and effective, billions of doses will be manufactured and distributed initially to the primary relenza markets - developed countries.


Comments:

Relenza is a cash cow, what they do with it will determine BTA's value. The choices are:
Share buy back
Dividend
Invest in other biotechs

The main market for relenza is the window before vaccination occurs as well as govt restockpiling. If things go as planned, vaccination will cover most the developed world's population by mid to late 2010.

Vaccines are not 100% effective and a certain percentage of the population will still require antivirals.

Given that cases of tamiflu resistance are being detected only 3-4 months after the flu outbreak, the ratio of tami:relenza in stockpiles is expected to continue to move in R's favour. This is probably the main relenza market for 2011-2014. LANI will hopefully be in there somewhere.

Unless patent rights can be extended, OR tamiflu resistance becomes a major concern, OR the virus turns nasty, OR there are problems with the vaccine, I cannot see GSK upping production again for developed country-markets.

Has anyone heard anything recent about relenza production in China and India? When the flu hits these countries hard later in the year, I can see Chinese and Indian govts wanting to keep most (?all) relenza and tamiflu production for themselves.

BTA is in a choice position with what appears to be one of the few next generation flu antivirals that work. If results are confirmed, expect big upfront payments and high % royalty. If this is huge, PC may go from villain to hero. Note also LANI is targetted at the Japanese market. It is a long way from approval in the US.

The flu market is now big $, expect pharmas and govts to throw big $ at developing faster and greater vaccine capacity.

Antivirals are now big $ markets. More will be developed, but will take years to get tested and approved.

Mal