With some 150 human cases of avian flu reported in Asia, resulting in at least 80 deaths, the urgency to stockpile sufficient vaccines to prevent the virus or halt its spread has been mounting. The fear that this flu virus will mutate into a worldwide human pandemic has caused governments and health organizations to begin spending vast sums of money to combat it.
Amid the growing concern, Swiss pharmaceutical Roche's announcement that it will produce an additional 100 million doses of Tamiflu, an antiviral drug developed with Gilead Sciences (NASDAQ:GILD), was greeted with some relief. Though not a vaccine for the virus, Tamiflu is considered one of the few drugs to have any impact on it, and governments have begun stockpiling doses. According to Roche, the company has fulfilled Tamiflu orders from 65 countries. This proactive step is also a response to calls by governments for Roche to give up its Tamiflu patents and allow generic versions to be created. Tamiflu earned $1.22 billion for Roche in 2005, and could earn it an estimated $1.2 billion in 2006 from government contracts alone.
While there is a lot of consternation lately about the spread of the H5N1 strain of avian flu, it's unknown whether the virus, currently transmissible to humans only through contact with infected birds, can even make the jump from to direct human-to-human transmission. For thousands of years, migrating birds have regularly spread avian flu viruses without human infection. Thus far, there doesn't appear to be any difference between the H5N1 virus and other strains of avian flu in how they infect people. Consider that millions of fowl have been infected with the virus for the past several years, but only a relatively small number of people have become infected, and fewer still have died. We certainly need to prepare for the potential, but we must also use caution when responding to potential media- or government-inspired hysteria.
Tamiflu is seen as the best current defense against the virus, but that may not always be the case. Viruses develop immunities to drugs when exposed to them over long periods of time. That apparently occurred with the drug amantadine, which was widely distributed in the 1990s but is now considered ineffectual. Some evidence suggests that the virus is developing an immunity to Tamiflu as well; in Thailand, eight of 10 people infected with H5N1 and treated with Tamiflu still died.
That has given new momentum to other companies to produce different treatments and vaccines. GlaxoSmithKline (NYSE:GSK) manufactures a competing treatment called Relenza; it has not been as popular because of its shorter shelf life, but governments have stockpiled it as well when Tamiflu was unavailable. Both Relenza and Tamiflu are neuraminidase inhibitors, which block the flu from escaping an infected cell and spreading further. Last year, Chiron (NASDAQ:CHIR) was awarded a $62.5 million contract by the U.S. government to develop a vaccine, on top of another $100 million contract awarded to Sanofi-Aventis (NYSE:SNY).
Small biotech upstarts are also looking for solutions. For example, BioCrystPharmaceuticals (NASDAQ:BCRX) is seeking to develop a single-injection vaccine, in contrast to the multiple doses needed for treatments like Tamiflu or Relenza.
Making the jump from birds to humans is no easy feat, even for fast-mutating viruses like the avian flu. There usually needs to be a third party, like a pig, that is infected simultaneously with human and avian viruses, allowing both to swap parts of their genetic code and infect humans. Even so, the mutation is a difficult process, and it's even harder for the virus to then evolve enough to transmit between humans. Animal husbandry practices in the West generally prevent such occurrences, but in Asia, where fowl and livestock are regularly commingled, the potential is much greater, which helps to explain why most of the cases have surfaced there.
While the situation bears watching for now, it's not necessarily something for investors to get their feathers ruffled about.
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Fool contributor Rich Duprey does not own any of the stocks mentioned in this article. You can see his holdings here. GlaxoSmithKline is a Motley Fool Income Investor pick. The Motley Fool has a disclosure policy.
