West Coast Editor

As the avian flu continues to move through Asia and threaten the rest of the world, BioCryst Pharmaceuticals Inc.'s Phase I neuraminidase inhibitor garnered a licensing deal with Green Cross Corp. in Korea, where testing of peramivir will yield data to supplement the U.S. results.

BioCryst's stock (NASDAQ:BCRX) closed Wednesday at $12.17, up 71 cents.

Under the terms, Seoul, South Korea-based Green Cross will share trial data with BioCryst, which also is planning studies in Thailand, Vietnam and Indonesia, with help from the National Institute of Allergy and Infectious Diseases (NIAID), and the World Health Organization.

Green Cross, which already sells products such as vaccines for hepatitis B and chickenpox, will pay BioCryst a one-time license fee, as well as event-based payments in the future and royalties described as "substantial" on sales to third parties.

BioCryst will share equally any profits from sales to the Korean government for stockpiling peramivir, and Green Cross will pay BioCryst a premium over its cost to supply peramivir for development and any marketing of peramivir products in Korea.

In March, BioCryst and NIAID started a Phase I trial with peramivir - which seems to hold promise against H5N1, the avian-flu strain - to determine the pharmacokinetics and safety of single and multiple doses of an intravenous formulation in healthy volunteers.

The bird flu is making inroads overseas. Reports surfaced this week of a Chinese man in critical condition with a positive diagnoses of H5N1 flu, after his family ate a freshly slaughtered chicken that was cooked at home.

Also being investigated for use in an avian-flu pandemic is Tamiflu (oseltamivir phosphate), another neuraminidase inhibitor from Foster City, Calif.-based Gilead Sciences Inc., approved to treat uncomplicated influenza A and B in patients ages 1 and older, and also as a prophylactic in people 13 years or older who are at high risk during flu season.

The product is marketed by Basel, Switzerland-based F. Hoffmann-La Roche Ltd.

Vinny Jindal, analyst with ThinkEquity Partners LLC in New York, wrote in a research note that "more countries and companies will endeavor to secure peramivir amid the very real concern that Gilead's Tamiflu is ineffective against H5N1 and cannot be produced in sufficient supply."

Peramivir, touted as much easier to make than Tamiflu - and with a cheaper process, has been shown effective in vitro against H5N1 strains that are resistant to the Gilead drug, Jindal said.

"It's clear from numerous reports that Tamiflu does not represent a magic bullet for the avian flu," he told BioWorld Today, conceding that "there is no viral disease where a single therapy addresses all patients and subtypes" and noting that, "in the context of an actual pandemic, given the severely limited supplies of Tamiflu and Relenza, I think people will take whatever they can get."

Relenza (zanamivir), which is administered by an inhaler, also targets the neuraminidase protein. Melbourne, Australia-based Biota Holdings Ltd. developed the drug and licensed it to GlaxoSmithKline plc, of London.

But which drug will be most widely chosen for government stockpiling?

"Each country will make its decision independently, but I think that if countries like the U.S. commit to peramivir, that speaks loudly to other countries," Jindal said, writing in his report that he expected a "request for proposal[s] for the roughly $300 million to be awarded for antiviral drugs (not vaccines) in the coming weeks," he wrote in his report.

BioCryst's Green Cross deal, however, came just as the Department of Health and Human Services' full request for proposals (RFP) related to therapies for avian flu began making the rounds.

"Although vaccination is the primary strategy for the prevention of influenza, there are a number of likely scenarios for which vaccination will be unavailable or inadequate and effective antiviral agents would be of critical importance," read the 53-page document's introduction.

The HHS calls for new antivirals "designed to affect different targets of influenza virus infection or to enhance effects of present classes of influenza antiviral drugs as necessary steps to counteract the limited supply, limited domestic production capacity and rising possibility of resistant virus strains to licensed antivirals in the event of a pandemic outbreak."

On the subject of supply, Gilead's partner for Tamiflu, F. Hoffmann-La Roche Ltd., of Basel, Switzerland, said in December that its capacity to produce 300 million Tamiflu treatments by 2007 is "significantly ahead of demand." Roche identified a list of 12 potential partners from an original short list of around 200 third parties interested in the pharma firm's Global Tamiflu Supply Network.

The RFP requires applicants submit an investigational new drug application within six months of the contract reward (if it hasn't been submitted already), and provide a "clear and comprehensive plan and timeline" for U.S. licensure of the antiviral.

Also demanded is a commitment to U.S.-based manufacturing, though antivirals may be made in an FDA-licensed U.S. or foreign manufacturing facility, "provided that the product can be stockpiled, has a shelf life that is consistent with long-term pandemic preparedness and where production capacity is sufficient for rapid fulfillment of U.S. pandemic stockpile needs at or before the onset of an influenza pandemic."

Sharon Seiler, analyst with Punk, Ziegel & Co. in New York, pointed out that a synopsis of the RFP was available in the middle of May.

"It's not brand spanking new," she said, adding that the HHS is "asking to develop compounds starting nearly from scratch. The idea behind it is to develop [new] drugs that might work against other targets."

Seiler called the RFP's language about limited supply and resistance "boilerplate, to some extent," and common sense when dealing with a potential pandemic.

"I think the government started out with an idea that they wanted this to be fast and quick and clean," she added. "But you're pushing against a bureaucracy [in the FDA]."

Gilead's stock (NASDAQ:GILD) closed Wednesday at $56.94, down 8 cents.