By Ari Sharp
Investors have flocked to Melbourne drug developer Biota after governments around the world considered tapping into stockpiles of the company's antiviral Relenza to combat the swine flu outbreak.
Shares in Biota, which has licenced the drug to pharmaceutical giant GlaxoSmithKline, skyrocketed 77%, or 67 to $1.54, this afternoon. Biota receives a 7% royalty from sales of Relenza.
The US government has already announced its intention to release 25% 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.
Relenza and the Roche-produced Tamiflu are recognised by the World Heath 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.''
GSK has announced its site in Boronia - one of three around the world that produced Relenza - will be operating at full capacity for the next three months. The site has the capacity to produce up to 22 million packs per year, and the company will be hiring 20 to 30 temporary employees to meet demand.
"GSK will be increasing its production of Relenza at its Boronia site in response to the discovery of the new flu strain and the increased focus on the importance of pandemic planning that this has created,'' Deborah Waterhouse, general manager, Australia and New Zealand, said. "I am proud that our Australian business can play an active role in responding to this international issue.''
Tamiflu, known generically as oseltamivir, and Relenza, or zanamivir, are both recommended drugs for seasonal flu and have been shown to work against viral samples of the new disease.
"Anti-viral drugs for seasonal influenza are available in some countries and effectively prevent and treat the illness,'' the WHO said in a statement over the weekend.
The WHO said recent samples of swine flu were resistant to another class of anti-flu drug known as adamantanes, but were "sensitive to'' Tamiflu and Relenza.
But the global health body noted that "most of the previously reported swine influenza cases recovered fully from the disease without requiring medical attention and without antiviral medicines''.
"Information is insufficient to make recommendation on the use of the anti-virals in prevention and treatment of swine influenza virus infection,'' the WHO statement said.
"Clinicians have to make decisions based on the clinical and epidemiological assessment and harms and benefit of the prophylaxis/treatment of the patient.''
"For the ongoing outbreak of the swine influenza infection in the United States and Mexico, the national and the local authorities are recommending to use oseltamivir or zanamivir for treatment and prevention of the disease based on the virus's susceptibility profile.''
Last week GSK revealed that Relenza had had record quarterly sales following stockpile purchases by the British and Japanese governments, delivering $32.3 million in royalties to Biota.
Roche said it had a stockpile of three million packages of Tamiflu ready for use by WHO, half held in the United States and half in Switzerland.
"So far the WHO has not requested we deploy this stockpile. Of course, as soon as the WHO requires that we deploy it we will do so,'' Roche spokeswoman Claudia Schmitt said.
The two companies have received contracts in recent years from individual governments and corporations for stockpiles of their medicines, following earlier fears over bird flu.
asharp@theage.com.au
, with agencies