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Tamiflu "Flies High" In Bird Flu Battle

Some 270 people have contracted the H5N1 virus or avian flu, according to the World Health Organization, and 164 of them have died. It's the high death rate--greater than 50%--that has alarmed so many health officials. One drug that is on the market for patients is Tamiflu--made by Gilead Sciences. Sales of the drug have made a big turnaround over the last few years--but is it a cure-all for the bird flu? CNBC's pharmaceutical's reporter Mike Huckman has the full story on the drugmaker and how Tamiflu has become so popular.

Norbert Bischofberger is Exec. VP for Research and Development at Gilead. Back in the early 90's--he and his colleagues saw GlaxoSmithKline working on the inhalable flu-fighter Relenza, and they got the idea to develop a similar drug in pill form. Bischofberger says that it was a big commercial opportunity and the existing drugs left a lot to be desired.

Using a special type of acid from star anise fruit--Bischofberger and a handful of scientists discovered the Tamiflu molecule--which blocks the typical flu virus from spreading. And in just six years--the drug was approved by the FDA. What they didn't have was a marketing agent--so they partnered with Roche --thinking they were the best company to market Tamilfu. But Bischofberger says they weren't committed enough and Gilead sued Roche--because "we did not see that Tamiflu was getting the attention and importance that it should."

That changed as fears of a "bird" flu pandemic reached new heights. Sales quintupled from 2004 to 2005. People began hoarding the drug--something Bishofberger doesn't mind. He says families should have immediate access to Tamiflu--and "people who fail to prepare for a flu pandemic are going to be tragically mistaken." Of course-that comment comes from the man and the company Gilead that receive a 22% royalty (they settled with Roch) on Tamiflu sales.

But is Tamiflu a cure-all? Not quite. Dr. Julia Gerberding of the Centers of Disease Control says that "There is some suggestion that they (Glaxo's Relenza and Tamiflu) may be helpful. There's also a suggestion that if you treat people their virus can develop resistance to the drugs. So, we have a lot to learn about antivirals for avian flu."

FYI-Gliead Sciences reported earnings yesterday after the bell. Royalties from the sale of Tamiflu more than doubled to $365 million. Roche announces earnings next Wednesday. But in the first nine months of last year, it sold $1.3 billion worth of Tamiflu. That would put it on pace to set another record years of sales in 2006. Roche says that 29 states and more than 300 unidentified companies have ordered Tamiflu.

This story is reported by Mike Huckman.

More FYI: Avian influenza is an infection caused by avian (bird) influenza (flu) viruses. These influenza viruses occur naturally among birds. Wild birds worldwide carry the viruses in their intestines, but usually do not get sick from them. However, avian influenza is very contagious among birds and can make some domesticated birds, including chickens, ducks, and turkeys, very sick and kill them.

Infected birds shed influenza virus in their saliva, nasal secretions, and feces. Susceptible birds become infected when they have contact with contaminated secretions or excretions or with surfaces that are contaminated with secretions or excretions from infected birds. Domesticated birds may become infected with avian influenza virus through direct contact with infected waterfowl or other infected poultry, or through contact with surfaces (such as dirt or cages) or materials (such as water or feed) that have been contaminated with the virus.

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