Editor

The Chinese ideogram for "crisis" also means "opportunity" and, although the ancient makers of symbolic language probably didn't consider avian influenza, the coincidence has an eerie resonance.

In May, Chiron Corp. gained a government contract from the National Institutes of Allergy and Infectious Diseases to find a vaccine against the flu strain that has jumped from bird to man in China and the Far East, killing more than 20 humans. French vaccine maker Aventis SA got a similar NIAID contract the same month.

Under the new contract, Chiron - which already has devised vaccines against other types of avian influenza (including a strain that circulated in the Hong Kong region in 1997, killing several people) - will focus on the H5N1 strain.

Speaking of influenza crisis, and of grisly opportunity: the U.S. Department of Health and Human Services in August gave forth its Pandemic Influenza Response and Preparedness Plan for public comment through October.

Though larded with the typically staid governmental language, the document sounds a clear warning in its executive summary, pointing to three flu pandemics that took place in the 20th century. The most severe was the scourge of 1918, which claimed more than 500,000 people in the U.S. and an astounding 20 million worldwide.

"Recent outbreaks of human disease caused by avian influenza strains in Asia and Europe highlight the potential [for] new strains to be introduced into the population," the summary points out, noting that studies show "avian strains are becoming more capable of causing severe disease in humans and that these strains have become endemic in some wild birds." If the strains mix with human strains, a pandemic could be on its way.

Chiron has had its problems with flu vaccines, including one that was characterized by Jennifer Chao, analyst with Deutsche Bank, as "very unexpected" near the end of August. The company is the fifth-ranked flu vaccine player in the world, holding second place in the U.S., so investors' eyebrows went up when the firm reported that some of its Fluvirin lots failed to meet sterility specifications, thus delaying shipments to an extent that would lower the overall output.

The company said its earnings are likely to tally at the low end of full-year pro-forma guidance, which was $1.80 to $1.90 per share. Non-adjusted earnings are expected to range between $1.50 and $1.60 per share.

Also in the news, but more favorably, late last month was another company with a flu connection: Gilead Sciences Inc., which could benefit from the stockpiling of its flu drug Tamiflu (oseltamivir phosphate). Buyers began packing away supplies of Tamiflu at the outbreak of the bird flu in Asia at the end of last year. Gilead gets royalties on sales of the neuraminidase inhibitor from Hoffmann-La Roche Inc.

"Flu experts caution that it is only a matter of time before the next severe flu pandemic strikes," Wade wrote in a research note, adding that the attack could claim six times more lives than the regular flu. "Tamiflu is one of the few drugs recommended to be used for preparedness against such potential severe flu pandemic."

The HHS report mentions neuraminidase inhibitors specifically, noting that they bring fewer side effects than other drugs and appear less likely to induce resistance.

"The major issues with the neuraminidase inhibitors are their relatively high cost and limited availability," the report said, noting supplies are "extremely limited" of zanavir, which is sold as Relenza by GlaxoSmithKline plc worldwide, as part of a deal with the Australian firm Biota Holdings Ltd.

Since the supply of Tamiflu also might be limited and held by the private sector, the HHS plan recommended "stocks available in a pandemic should be targeted to priority groups with well-defined guidelines for prophylaxis and therapy" and tight collaboration between health care organizations and providers.

"New data suggest that [neuraminidase inhibitor] treatment can decrease complications such as pneumonia and bronchitis, and decrease hospitalizations," the HHS report said.

The other class of influenza drugs comprises the adamantines - amantadine and rimantadine - which "are effective as prophylaxis and have been shown to decrease the duration of illness when used for treatment of susceptible viruses," according to the report. "However, resistance often develops during therapy."

Chiron, of course, has more going on than vaccines, such as its blood-testing business, which it beefed up last week by buying Prion Solutions Inc., focused on research into variant Creutzfeldt-Jakob disease (vCJD), among other prion-related diseases. The condition is a slow, progressive neurological disorder characterized by dementia and involuntary muscle contractions. More than 150 cases of vCJD have been linked to contact with cattle infected with bovine spongiform encephalopathy, or Mad Cow disease, and researchers believe vCJD can be passed by transfusion.

Analyst Chao said the price Chiron paid for Prion likely "does not exceed several million dollars," and she kept her "hold" rating on Chiron's stock, based on the earlier glitch with Fluvirin supply.

Gilead, though, could be sitting pretty, based not only on its influenza position but more importantly on its progress against another virus less often in the news but even more deadly: HIV.

Gilead said the combination of Viread (tenofovir disoproxil fumarate) and Emtriva (emtricitabine) - approved about a month ago as the single pill Truvada - proved better in 24-week preliminary trial results than GSK's Combivir, which consists of lamivudine and zidovudine in a single pill.

The FDA gave its nod to Truvada, a nucleoside reverse transcriptase inhibitor (nRTI), for once-per-day use in combination with other antiretroviral agents. Combivir, from GSK, gained marketing clearance in the U.S. in 1997. On the same day Truvada won approval, the agency also cleared GSK's Epzicom, yet another combo pill, this one made up of abacavir and lamivudine.

Like Truvada, Epzicom is indicated for use in combination with other antiretroviral drugs from different classes, such as non-nucleoside reverse transcriptase inhibitors (NNRTIs) or protease inhibitors for adults with HIV-1.

In the competitive shuffle for HIV drugs, companies are "pairing up for the dance," William Tanner, analyst with Leerink Swann & Co., told BioWorld Financial Watch.

"Gilead has paired up with better companies than [GSK]," he added, referring to the disclosure in May that the company is exploring the possibility of a three-way partnership with Merck & Co. Inc. and Bristol-Myers Squibb Co. that could combine Gilead's Viread and Emtriva with Sustiva (efavirenz), the NNRTI marketed by Bristol-Myers and Merck.

GSK "doesn't even have an NNRTI," and the Gilead/Merck/Bristol-Myers deal, if it comes to pass, "could be a pretty strong partnership," Tanner said. "If anything, Gilead's more than a competitor than a potential partner [for GSK]."

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