UPDATE 2-Glaxo sees more big orders for H1N1 flu vaccine

UPDATE 2-Glaxo sees more big orders for H1N1 flu vaccine

Wed May 20, 2009 2:14pm EDT

http://www.reuters.com/article/rbssPharmaceuticals%20-%20Diversified/idUSLK97908820090520

* New orders expected beyond 128 mln doses bought last week

* H1N1 price in line with seasonal at about 5 pounds a dose

* Volume will depend on yield during vaccine production

* Strong demand also for Relenza flu drug

By Ben Hirschler

LONDON, May 20 (Reuters) – GlaxoSmithKline (GSK.L: Quote, Profile, Research, Stock Buzz) expects to book further big orders for the H1N1 flu vaccine it is developing, pointing to higher earnings for the company in 2009.

“I fully anticipate that we will receive significantly more orders in the coming weeks and months,” Chief Executive Andrew Witty said at the company’s annual shareholder meeting on Wednesday. The world’s second biggest drugmaker said last Friday that Britain, France, Belgium and Finland had between them placed orders for 128 million doses of H1N1 vaccine, and Witty said Glaxo was talking with “many more governments”.

Countries around the world are seeking to build up stockpiles of vaccine to deal with a likely flu pandemic caused by the new H1N1 strain, also known as swine flu.

In addition to extra flu vaccine sales, Glaxo is benefitting from increased demand for its inhaled flu drug Relenza, a competitor to Roche’s (ROG.VX: Quote, Profile, Research, Stock Buzz) tablet Tamiflu, Witty added.

Analysts believe strong demand for both vaccines and Relenza will boost earnings at the British-based drugmaker in 2009.

Witty declined to comment on scale of the profit boost but he told reporters the H1N1 vaccine would be priced in rich countries at about the same level as the conventional seasonal flu shot, at around 5 pounds ($7.75) per dose.

Glaxo will offer tiered pricing in other parts of the world to make supplies affordable in poorer countries.

The exact scope for additional vaccine sales will depend on the yield of vaccine material during the manufacturing process — something that is impossible to forecast at the moment, since different viruses yield different amounts and production has not yet started.

Still, Glaxo believes it has an edge over some other manufacturers because of the powerful adjuvant, or additive, it is using that boosts the immune response of people being vaccinated and means more doses can be made with less active ingredient.

“We hope to be able to generate a significant number of doses,” Witty said.

Glaxo expects to begin production of H1N1 vaccine after receiving the seed virus, or starting material, at the end of May or early June, with the first doses available four to six months later, pending regulatory approval.

Importantly, it believes it can make the additional pandemic supply without disrupting the normal production of seasonal vaccine. Production of seasonal flu shots for the northern hemisphere winter is finished by July and production for the southern hemisphere only starts in October, leaving a period of “down time”.

Witty said the ability to ramp up production also reflected the big investment Glaxo had made in recent years.

“We’ve invested over the last 4-1/2 years something like $2.5 billion in flu vaccine capacity,” he said.

“There have been years when we’ve not sold everything we’ve made and not all that capacity has been used, but we made those investments so that we would be ready to step up in a situation like this.”

Other major flu vaccine makers like Sanofi-Aventis (SASY.PA: Quote, Profile, Research, Stock Buzz) and Novartis (NOVN.VX: Quote, Profile, Research, Stock Buzz) have also increased production capacity recently.

The latest H1N1 virus has killed an estimated 80 people and infected more than 10,000 people worldwide, according to the World Health Organisation. [ID:nFLU] ($1=.6459 Pound) (Editing by Elaine Hardcastle and Hans Peters)

About the author

VT

Jeffry John Aufderheide is the father of a child injured as a result of vaccination. As editor of the website www.vactruth.com he promotes well-educated pediatricians, informed consent, and full disclosure and accountability of adverse reactions to vaccines.