Health: Antiviral Drugs

[Guest guest]

Seems that the multi-national mega-buck pharmaceutical giants are not

just out to shaft the public .. they do a fair job on each other too.

 

FYI: Tamiflu is made from products used in the AT industry.

http://edition.cnn.com/2006/HEALTH/conditions/01/20/tamiflu.xmas.trees/index.htm\

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Firms in Dispute Over Antiviral Drug

 

By PAUL ELIAS

 

CHICAGO (AP) - Global fears over bird flu have sent sales soaring for an

antiviral drug once dismissed as a commercial dud, but the two companies

responsible for the drug are locked in a bitter court battle over profits.

 

The tiny Australian biotechnology company Biota Inc. invented the drug

Relenza in 1989, but the next year sold control of it to GlaxoSmithKline

PLC in exchange for about 6 percent of future sales.

 

In 1999, the U.S. Food and Drug Administration approved Relenza to treat

the flu, and the two partners had cause to celebrate. Sales spiked and

Biota's stock, traded on the Australian stock market, rose to $9 and

drove the company's market capitalization to $500 million.

 

But by 2001, sales of Relenza - taken like an asthma inhaler - fell to

almost nothing as a competing antiviral pill called Tamiflu, also

approved in 1999, proved more popular with prescribing doctors and their

patients. Biota's stock now trades in the $1 to $2 range.

 

" Relenza did not have significant uptake as a commercial product, " said

Glaxo spokeswoman Nancy Pekarek. " Pills are generally a more popular

form of taking medicine. "

 

Then the bird flu scare hit.

 

Orders for Relenza poured in after the World Health Organization advised

governments in 2004 to stockpile as much antiviral medicine as possible

in case of an outbreak. In the last six months of 2005, for instance,

the French, Australian and German governments ordered 12.5 million doses

of Relenza. Before 2005, Glaxo sold an average of 500,000 doses a year.

 

Though Tamiflu still owns an overwhelming majority of an antiviral

market that has reached $3 billion, attention has recently shifted to

Relenza as Tamiflu maker Roche Inc. struggles to keep up with demand.

 

Biota sued Glaxo two years ago in Australia, alleging that the drug

maker failed to market Relenza properly. A trial is expected next year

if the two sides don't settle.

 

Biota argues that Relenza's sagging popularity had little to do with a

patient preference for pills and was really the result of Glaxo's

refusal to spend money to promote the drug.

 

Biota Chief Executive Peter Cook said he doesn't buy Glaxo's rationale

for Relenza's poor past sales because Glaxo's most popular drug is the

inhaled asthma fighter Advair, which had $5.2 billion in sales last year.

 

" They understand how to educate the prescribers, " said Cook, who was in

Chicago this week attending the Biotechnology Industry Organization's

annual convention. " They understand how to educate the patients. "

 

While Relenza's sales represent a mere revenue trickle for Glaxo, the

drug means everything to Biota. The company employs 30 workers and has

annual sales of about $4 million; Glaxo has 100,000 workers and $40

billion in yearly revenue.

 

Cook said Biota isn't asking for the drug's rights back, but the company

is demanding $300 million in alleged damages.

 

The effectiveness of both Relenza and Tamifu in fighting a potential

bird flu pandemic is still an open question. The drugs do cut down on

hospitalizations and even death when patients with conventional

influenza take them within 48 hours of infection.

 

Though neither is a vaccine, the FDA has recently approved them for use

as a preventative treatment in addition to their traditional use after

infection for the common flu.

 

" Having a stockpile of antiviral drugs is an important part of our

pandemic influenza preparedness plan, " U.S. Health and Human Services

Secretary Mike Leavitt said March 1 in announcing an order for 1.75

million doses of Relenza. The United States has ordered a total of 4.8

million Relenza doses.

 

A study published last year in the British medical journal The Lancet

found Relenza was at least as effective as Tamiflu, and had fewer side

effects, boosting Relenza's popularity even more.

 

Demand for Relenza is increasing so much that Glaxo intends to increase

production from 1 million doses last year to 15 million doses by the end

of this year, and 40 million by 2007.

 

Glaxo won't disclose sales figures for Relenza, but Biota reckons annual

sales last year totaled about $300 million and could skyrocket when

production is ramped up.

 

If Glaxo reaches Biota's Relenza sales projection of close to $500

million in the next year, Biota would earn about $28 million and become

instantly profitable. It lost about $10 million last year.

 

The legal spat between Biota and Glaxo mirrors a similar dispute between

Burlingame, Calif.-based Gilead Sciences and Swiss drug company Roche

over Tamiflu.

 

Gilead created Tamiflu, but the small, money-losing biotechnology

company licensed marketing rights to Roche in exchange for royalties.

Last year, Roche paid Gilead $62.5 million to settle similar allegations

that the drug giant failed to properly market Tamiflu. Tamiflu racked up

$1.2 billion in sales last year, a figure that could triple next year as

governments scramble to fill their planned antiviral stockpiles.

 

Mark Saunders, a lawyer and president of Global Markets Capital Group, a

New York firm that helps life sciences companies with mergers and

acquisitions, said the recent surge in Relenza sales seems to bolster

Biota's case.

 

" Maybe if Relenza was promoted with the same enthusiasm as Tamiflu, then

it may have been on equal footing now, " he said. " In retrospect, it

appears to be a very good drug. "

 

On the Net:

 

Biota: http://www.biota.com

Glaxo: http://www.gsk.com

WHO: http://www.who.int

 

04/16/06 22:29 © Copyright The Associated Press. All rights reserved.