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Glaxo’s Relenza Beat Rival Tamiflu in Stockpile Sales (Update4)
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By Jason Gale, Trista Kelley and Simeon Bennett

April 27 (Bloomberg) -- GlaxoSmithKline Plc’s flu drug Relenza beat Roche Holding AG’s Tamiflu in sales to governments for the first time last quarter, a sign authorities are seeking a broader range of medicines to protect against a pandemic.

Government orders of Relenza were 20 percent higher than those for Tamiflu in the first quarter, according to data from both companies released before the current swine flu outbreak.

Demand for Relenza was stoked by reports of widespread resistance of H1N1, a common seasonal flu virus, to Tamiflu. The U.K. and Japan increased orders for the drug to prepare for a possible influenza pandemic on concern Tamiflu-evading seasonal flu could exchange genes with a pandemic strain, making that pill a weaker weapon against a global contagion. Almost all H1N1 samples tested last winter were resistant to Tamiflu, the World Health Organization said.

“Governments are balancing their stockpiles” by including more Relenza, said Stephen Rea, a spokesman for London-based Glaxo, in an April 24 phone interview. “Our expectation would be that other governments would follow suit. Our view would be the U.S. government would also be persuaded.”

Glaxo shares gained 57 pence, or 5.7 percent, to 1,063 pence in London, the most in five months. Roche climbed 4.9 Swiss francs, or 3.5 percent, to 144.5 francs in Swiss trading, the most since March 10.

Shares Gain

Biota Holdings Ltd., which earns royalties on Relenza sales, jumped 82 percent today, the biggest gain since October 1987, on speculation sales will gain as concerns mount that the flu may spread. Biota closed at A$1.58 in Sydney trading, valuing the Melbourne-based company at A$276 million ($197 million). The shares closed at their highest price in 2 1/2 years after the WHO called swine flu a “public health emergency of international concern.”

Governments ordered about 220 million pounds ($322 million) of Relenza in the three months ending in March, Rea said. That compares with orders for Tamiflu of 304 million francs ($266 million), Basel, Switzerland-based Roche said April 17.

Total sales of Tamiflu in the first quarter, including revenue from doctors’ prescriptions of the drug for seasonal flu, were 401 million Swiss francs, compared with 222 million pounds for Relenza. Seasonal sales of Relenza were “a couple of million” pounds in the quarter and sales for stockpiles were the “vast majority” of the total, Rea said.

Additional Reserves

“Based on the information we’ve got so far, governments are tending not to be reducing their Tamiflu,” said David Reddy, head of Roche’s influenza task force, in an April 23 telephone interview. “Some governments are buying some additional reserves of alternative antivirals to manage cases of resistance.”

Fears of a global influenza outbreak sparked by the H5N1 strain of avian flu prompted governments around the world to store millions of courses of Tamiflu that could be used to prevent infection in health-care workers and others performing critical job functions. That demand spurred Tamiflu sales of 2.6 billion Swiss francs in 2006 and 2.1 billion francs in 2007.

Those stockpiles may be deployed if the flu outbreak that’s killed more than 100 people in Mexico and sickened others in the U.S. and Canada sparks a global pandemic. Mexico’s government has so far confirmed that 20 of the 103 deaths in that country were caused by swine flu. Both Relenza and Tamiflu are effective against the pathogen, according to the Geneva-based WHO.

Recommend Relenza

The U.S. Centers for Disease Control and Prevention recommends that patients take Relenza, or an unspecified anti- viral drug combination, rather than Tamiflu, Martin Meltzer, a senior health economist at the CDC, said at a meeting in Cannes, France, today.

Glaxo’s Rea said today that the drugmaker is producing Relenza at “full capacity.” Glaxo is “urgently assessing mechanisms to increase production of Relenza,” the company said in a statement, adding that its antigen-sparing technology may also be useful in developing a vaccine against the virus.

“We’re currently reinitiating the activities that we had in 2005-2006 when we scaled up production,” said Martina Rupp, a spokeswoman at Roche. “We’re looking at all the production processes to see how we can expedite the ramp-up if needed.”

Roche hasn’t yet received any requests to boost output, she said.

“Once we have full-scale production up, it’s 400 million treatments, which is equivalent to 4 billion capsules per year,” Rupp said. She declined to say what current output is.

‘Strategically Positioned’

Homeland Security Secretary Janet Napolitano said 25 percent of U.S. antiviral stockpiles are being released. The Defense Department “has procured and strategically positioned 7 million treatment courses of Tamiflu,” Napolitano said. In all, there are 50 million courses, she said.

The H5N1 avian flu virus isn’t resistant to Tamiflu, though the pill’s potency could be lost if the virus recombines with the Tamiflu-resistant H1N1 strain, Robin Robinson, director of the Biomedical Advance Research and Development Authority in Washington, told the Scientific American last month.

There have been at least 421 human cases of avian flu, mostly in Asia, and 257 of those patients died since 2003, according to WHO, a United Nations agency. Symptoms include fever, cough, sore throat, muscle aches, eye infections, pneumonia and acute respiratory distress.

Blocking Proteins

Tamiflu and Relenza, an inhaled powder, reduce severity and the duration of symptoms by 24-to-30 hours if treatment is started within the first two days of illness, according to the companies.

Both drugs work by blocking a protein on the surface of influenza particles called neuraminidase which allows the virus to spread from infected cells to other cells in the body. Scientists say mutant H1N1 viruses have evolved to evade Tamiflu through a single mutation in the neuraminidase that prevents the medicine from clinging to the viral protein, enabling the pathogen to spread. Relenza isn’t affected by the mutation.

Resistance among seasonal influenza strains doesn’t predict resistance among pandemic influenza viruses, the U.S. Department of Health and Human Services said this year. It’s unknown whether resistance to Relenza or Tamiflu may become a problem with widespread use of the drugs during a pandemic, it said.

The U.S. states and federal government aim to stockpile 81 million courses of antiviral medications as part of public health preparedness for a pandemic, according to the Department of Health and Human Services report.

Emergency Stockpile

Canada will adjust the combination of antiviral medications in its national emergency stockpile because of concern about Tamiflu resistance among influenza viruses, the Canadian Press reported this week.

The Public Health Agency of Canada said it will boost its supply of Relenza, along with older antivirals such as amantadine and rimantadine, the news service reported. Canada’s emergency stockpile, a backup to the country’s national antiviral stockpile, currently contains 14 million doses, enough to treat 1.4 million people, the report said.

“The global market for antiviral pandemic stockpiling is shifting very rapidly to include a major Relenza component, given the recurring problems with Tamiflu at present,” Thomas Duthy, who tracks health-care and biotechnology companies for Taylor Collison Ltd. in Sydney, said in an April 23 report.

Duthy rates Biota a “speculative buy” and said he expects authorities in France, Germany and Hong Kong to add Relenza to their stockpiles over the next two years.

Relenza and Tamiflu have an expiry date five years after manufacturing.

To contact the reporter on this story: Simeon Bennett in Singapore at [email protected]; Jason Gale in Singapore at [email protected]; Trista Kelley in London at [email protected]

Last Updated: April 27, 2009 12:33 EDT