i speculate...

Is it just me or does anyone else think the market still doesn't believe the 50-60m doses per annum isn't spoken for?

Looking closer at the announcements from GSK we see the following.

On the 1st of May GSK lift production to 50-60m doses per annum within weeks(likely their maximum capacity at the moment due to comments later in the release relating to looking for partners to increase production further)...

"GSK has therefore contacted governments around the world to ascertain demand for Relenza, including those countries most affected by the virus, such as Mexico and the USA. As a result, GSK has put in place a series of measures this week to manage existing stocks of Relenza and raise production levels:

- GSK has increased production levels for Relenza and is now set to produce between 50-60 million treatment packs of Relenza per year. The company expects to achieve this rate of output (5 million treatment packs per month) within the next 12 to 14 weeks. "

http://www.gsk.com/media/pressreleases/2009/2009_pressrelease_10048.htm

But then later on the 15th of May we see GSK announce they are in discussions to increase capacity FURTHER!

"GSK is continuing discussions with other governments and public health authorities to increase production and supply of its anti-viral medication, Relenza. Relenza can both treat influenza (flu, infection caused by influenza virus) and reduce the chance of getting flu in the community and household settings. The flu is a highly contagious and potentially fatal disease caused by influenza types A and B. While some antiviral medications only protect against influenza A, Relenza is effective against both influenza A and B. Relenza is approved for the prophylaxis and treatment of influenza in children and adults. "

http://www.gsk.com/media/pressreleases/2009/2009_pressrelease_10054.htm

I speculate that the 50-60m doses per annum are already spoken for in some capacity. I further speculate that if GSK announces they are lifting capacity further then this will be due to government demand i.e. some sort of order.

Further, if they announce a hard production level like 200m doses per annum then the BTA stock could go nuts as analysts suddenly realise that both the 50-60m p.a. announced 1st of May was spoken for and the rest is also spoken for!

All speculation and the best case scenario... but then we are talking big royalty figures. 60m doses is around $100m and 200 over $300m. Wouldn't that do wonders for the stock price!

Keep a close eye on GSK's public announcements. They are the key IMHO. If WHO increases to the final pandemic phase could that trigger the extra production in preparation for the northern hemisphere winter? And then we have another little known compound called LANI...