Pig flu drug shares fly, airlines get jittersAri Sharp and Lucy...

Pig flu drug shares fly, airlines get jittersAri Sharp and Lucy Battersby
April 28, 2009 Page 1 of 2 Single page view

INVESTORS have flocked to Melbourne drug developer Biota as the swine flu outbreak prompted governments around the world to consider tapping into stockpiles of the company's antiviral drug Relenza.

Shares in Biota, which has licensed Relenza to pharmaceutical company GlaxoSmithKline, skyrocketed 71¢ to $1.54 in yesterday's trade, an increase of 82 per cent. Biota receives a 7 per cent royalty from GSK's Relenza sales.

The US Government has already announced its intention to release 25 per cent of its 50-million-course stockpile for use following 20 suspected cases of swine flu, and other countries are likely to follow if they experience outbreaks.


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Relenza and the Roche-produced Tamiflu are recognised by the World Health Organisation as the two appropriate treatments for the flu, which has already claimed more than 100 lives in Mexico.

But Biota chief executive Peter Cook said that he was not expecting an immediate surge in demand from governments seeking to add to their stockpiles.

"As always occurs with these sorts of outbreaks, it drives something that's going on in the background into public attention, and so increased public attention is useful and valuable," he said.

"These things have always got long lead times. Governments don't spend hundreds of million of dollars instantly."

Aberdeen Asset Management senior investment manager Andrew Preston said mass health scares created uncertainty among investors, which tended to push market sentiment down. An outbreak can also cause a general decline in consumption and economic sentiment, he said, because people "did not really know what the disease entailed".