How Biota could benefit from flu vaccine debacle

After running out of influenza vaccines during last winter's major epidemic, the US confronts the prospect of an even more severe shortfall in the coming season.

Quality control problems have forced Chiron Corporation to shut down its vaccine-manufacturing facility in Liverpool, UK, source of about 50 per cent of the US's flu vaccine supply, for the next three months.

Any shortfall in the event of a repeat of last year's unusually severe epidemic in the northern hemisphere would provide a potential bonanza to big pharmaceutical companies GlaxoSmithKline and Roche which both manufacture new-generation anti-viral drugs that can both prevent influenza and reduce the severity and duration of an established infection.

Melbourne anti-viral drug developer Biota Holdings (ASX:BTA) has wasted no time in reminding its reluctant commercial partner, GlaxoSmithKline (GSK) of the need to make the North American market aware of the potentially life-saving powers of GSK's neuraminidase-inhibitor Relenza.

Biota, which developed the drug in collaboration with CSIRO and Monash University's Victorian College of Pharmacy, is currently seeking damages from GSK in the Victorian Supreme Court for loss of revenue from royalties on Relenza.

GSK saw Relenza as a billion-dollar product when it signed an agreement to commercialise the Biota compound in the late 1990s, under which Biota would receive a royalty of 7 per cent on all international sales. But its enthusiasm waned rapidly after Relenza's launch in 2000. Several years of relatively mild flu epidemics saw only modest sales, and like Swiss giant Roche, which makes the rival drug Tamiflu, it spent millions buying back stockpiled supplies as they reached their use-by date.

GSK virtually abandoned the market, giving Roche free rein to market Tamiflu, and when Biota launched its action against GSK, Relenza accounted for only 3 per cent of global sales of neuraminidase inhibitors.

If this season's vaccine shortage coincides with a major epidemic -- or worse, a long-overdue flu pandemic -- sales of the anti-viral drugs could run into billions of dollars.

Biota CEO Peter Molloy told The Australian newspaper last week that the Centres for Disease Control in Atlanta, Georgia, was recommending anti-virals as an alternative to vaccines for preventing influenza outbreaks in confined environments like nursing homes. He said Biota expected GSK to respond to the market opportunity -- or risk an "amplification" of Biota's damages claim for lost royalties if there was a major epidemic during the next northern winter.

People over 50, infants aged 6-23 months, patients with chronic heart and respiratory problems, and front-line medical staff, would receive priority, while the remainder of the population would have to rely on new wave anti-viral drugs like the neuraminidase inhibitors.

Windfall

Chiron's woes, resulting from its failure to meet good manufacturing practice (GMP) standards in the UK, have reportedly delivered a windfall to the only other major supplier of 'flu vaccines to the US market, Sanofi-Aventis, in the form of orders for a further 50 million doses.

But there will be no windfall for other international vaccine manufacturers like Australia's CSL, according to Dr Alan Hampson, deputy director of the World Health Organisation's Collaborating Centre for Influenza in Parkville, Melbourne.

Hampson said it would take "a long time" for the US Food and Drug Administration to approve new drugs and vaccines, so there was no immediate opportunity for any would-be suppliers of 'flu vaccines to the US market.

Hampson said the US's difficulties with vaccine supplies traced to the swine flu scare of 1976, when a solider at the US Army training base at Fort Dix died after contracting a new strain of influenza virus that was subsequently traced to pigs. The resulting concern that the world might be facing a repeat of the deadly 1918 Spanish flu epidemic, which killed up to 40 million people, had led US health authorities to mount a mass-vaccination campaign.

Complications from vaccination, resulting from quality-control problems in manufacturer, had led to a rash of lawsuits against vaccine manufacturers. The risk of lawsuits, and the low margins on attenuated-virus vaccines, had led several manufacturers to move out of flu vaccines, leaving only two manufacturers for the US market: Chiron, and Sanofi-Aventis.

Hampson said the added risk of a pandemic of a new, mutant strain of influenza, like the emergent H5N1 'bird flu' strain that decimated poultry flocks in China, Hong Kong, Vietnam and Thailand early this year, also highlighted the importance of anti-viral drugs as back-ups to vaccines.

The H5N1 strain was so virulent that it could not be grown in embryonated chicken eggs, which were used to produce most of the world's supplies of attenuated-virus influenza vaccines.

And Hampson said it was also possible that, while international health authorities were focusing on the H5N1 strain, a completely new strain might emerge to cause the next pandemic. This had been the case with the Asian (1957) and Hong Kong (1969) pandemics, which had come "out of the blue".

The only solution for producing a bird flu vaccine might be to genetically modify the virus to reduce its virulence to allow it to be grown in eggs, but that would create a problem in countries that refused to accept genetically modified products for human use.

Hampson said vaccine production consumed vast numbers of chicken eggs. The US is already experiencing supply problems, and the fact that the eggs are not microbiologically sterile is a problem for vaccine manufacturers -- including Chiron. The problem of egg quality could also make it difficult for Sanofi-Aventis to ramp up production to the levels required to make up the US shortfall.

"Some nations are already stockpiling antiviral drugs, and Australia has made a substantial investment," Hampson said. "We're not going to have enough to completely ablate an influenza epidemic, but we may be able to limit its spread if we protect front-line medical staff, and use anti-viral drugs to contain the early outbreaks in places like Thailand and Vietnam. That might require other countries like Australia to donate their stockpiled supplies."