Flu Frenzy Frames Biotechs' Futures

Of course, Gilead's Tamiflu has easily received the most attention. Tamiflu has been proven effective in treating the avian flu in humans, and it's already approved by the Food and Drug Administration to treat common strains of influenza. But Gilead says Roche has failed to adequately market Tamiflu, and the companies are involved in arbitration to decide the rights to the drug.

Roche has the sole marketing rights to the drug Gilead developed. Where it could get worrisome for these two companies, from an investment standpoint at least, is the fact that Taiwanese researchers and Indian generic drug company Cipla claim to have copied the drug. Cipla has said it plans to manufacture it, despite a possible court showdown with Roche.

Initially, Roche had refused to allow another company to manufacture Tamiflu, but that's changed amid growing worry and pressure from various regulators. Roche now says it's in discussions with eight companies, including large generic-drug makers, along with the governments of Taiwan and Vietnam.

Roche estimates it will have the capacity to produce 300 million doses of Tamiflu a year by 2006, or 10 times its 2004 capacity. The company expects to select potential partners for more detailed production discussions by the end of this month.

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