By Val Brickates Kennedy
Anti-viral developers Gilead Sciences, Roche and GlaxoSmithKline
PLC were up significantly in early trading Monday on fears that the
swine flu outbreak that started in Mexico could become a global
pandemic.
Shares of Gilead (GILD) were up 4% at $47.73, while Glaxo (GSK)
shares climbed 6% to $30.96. Roche shares were up 5% to $31.80.
Gilead developed a leading flu-fighter, Tamiflu, also called
oseltamivir. The biotech group receives royalties on Tamiflu sales
from marketer Roche (RHHBY).
Glaxo, meanwhile, sells a popular flu-fighting agent called
Relenza, also known as zanamivir. The product was co-developed with
Australian firm Biota Holding Ltd (BTAHF)(BTA.AU), which receives
royalties on sales.
Gilead reported last week that it took in $33 million in Tamiflu
royalties, down from $93 million the previous year. Gilead
attributed the drop to stockpiling by health agencies worldwide in
preparation of a possible pandemic of the avian flu virus.
According to Biota's website, Relenza had sales of $462 million
for the quarter ended March 31, garnering the company about $32
million in royalties. Biota noted that the U.K. and British
governments had recently ordered "significant" amounts of the
product as part of their pandemic stockpiling measures.
Lazard Capital Markets analyst Joel Sendek said in his note
early Monday that the Centers for Disease Control suspects other
flu-fighting agents are ineffective against the swine flu virus and
is recommending either oseltamivir or zanamivir to treat
patients.
"Gilead is likely a beneficiary of the current situation. We
anticipate increased retail sales of Tamiflu as people with
suspicious symptoms consistent with the flu are likely to purchase
Tamiflu. We also expect additional government stockpiling in the
future given the scale and speed of the current swine flu
emergency," wrote Sendek, who tracks Gilead.
-Val Brickates Kennedy; 415-439-6400;
AskNewswires@dowjones.com