The Food and Drug Administration has just given doctors another weapon to battle the flu bug. The agency just approved Relenza, a GlaxoSmithKline (NYSE:GSK) drug currently used to treat influenza, for use in preventing the disease as well.
FDA officials emphasized that Relenza is not a substitute for a flu vaccine, which they claim remains the best way to avoid the flu. Nonetheless, health-care professionals should welcome the new drug in the battle against the flu, which kills about 36,000 Americans each year.
Tamiflu, marketed by rival Roche, is the only other drug with FDA clearance for both prevention and treatment of the flu. Relenza must be inhaled, whereas Tamiflu is a pill. Australian company Biota Holdings developed Relenza, while Gilead Sciences (NASDAQ:GILD) invented Tamiflu; both firms receive royalties on sales.
The market for Relenza could be even larger than it first appears. Countries worldwide have been stockpiling both drugs in case the H5N1 strain of avian flu mutates into a form that spreads easily among humans. This could spark a deadly global pandemic, since humans lack even partial immunity to the virus.
In response, the U.S. government has already allocated $3.8 billion for avian-flu preparedness. Earlier this month, the Department of Health and Human Services ordered 2.2 million additional courses of Relenza from Glaxo, in addition to the 1.75 million courses already ordered.
Separately, Glaxo recently received the good news that Relenza appears effective against H5N1. Researchers wrote in the New England Journal of Medicine that although both Relenza and Tamiflu are in the same class of drugs, known as neuraminidase inhibitors, Relenza does not appear vulnerable to the mutations that can make H5N1 resistant to Tamiflu.
Not satisfied to rely wholly on Relenza in the bird-flu fight, Glaxo has just announced the beginning of clinical trials for two vaccines against the H5N1 strain in humans. The drugmaker reiterated plans to have an inoculation in production by year's end.
Even moreso than rival firms such as Sanofi-Aventis (NYSE:SNY) and Chiron (NYSE:CHIR), Glaxo appears well-positioned to provide drugs and vaccines to combat the threat of avian flu. In the meantime, their drugs should help save lives by preventing ordinary flu as well. For investors seeking to give their portfolios a shot in the arm, now might be the time to take a closer look at Glaxo.
Glaxo is a Motley Fool Income Investor selection. To help inoculate your portfolio against the market's ups and downs with a preventative dose of dividends, sign up today for a free 30-day guest pass.
Fool contributor David Compton has had his seasonal flu shot and does not own shares of any company mentioned in this article.
