West Coast Editor

Gilead Sciences Inc. wants out of its 1996 deal with Hoffmann-La Roche Inc. for Tamiflu (oseltamivir phosphate), claiming the partner failed to adequately promote the flu pill or pay fair royalties.

The notice of termination, which would give all rights back to Foster City, Calif.-based Gilead, also claims Roche, of Nutley, N.J., did not launch Tamiflu in markets where the drug has been approved, and blames Roche for manufacturing problems that led to a supply shortage in the past.

As news reports circulated that Roche was taken aback by the move, Gilead spokeswoman Amy Flood told BioWorld Today the problems have been at issue "for several years, so there shouldn't be an element of surprise."

Roche's response "has been that there would be improvements," but Gilead has not seen them, she added.

Targeting the neuraminidase protein and approved in the fall of 1999, Tamiflu works against the A and B influenza strains. It's indicated for patients 1 year and older whose symptoms have begun in the last day or two, and is prescribed to reduce the chance of getting the disease in people age 13 and older who have a higher chance of getting the flu because they spend time with someone already infected. (See BioWorld Today, Oct. 29, 1999.)

London-based GlaxoSmithKline plc's inhaled product Relenza (zanamivir, developed by Melbourne, Australia-based Biota Holdings Ltd., and licensed to GSK) works by the same mechanism as Tamiflu, which "very quickly became the No. 1 drug prescribed in that class," Flood noted.

Vaccination is still considered the first line of defense against the flu.

Lately, Tamiflu has been in the news as a possible weapon against a flu pandemic, with Roche's medical director urging Congress to stockpile the drug - effective against the H5N1 strain - in order to mitigate potential trouble with the avian flu. (See BioWorld Today, May 31, 2005.)

"This should not and will not disrupt any of the ongoing pandemic activities," Flood said. "Should the contract be terminated, there is a two-year period during which Roche continues to be responsible" at the same level as before, she added.

The time-honored flu shot gained center stage in the past season when Emeryville, Calif.-based Chiron Corp. botched 46 million to 48 million doses of Fluvirin, or about half the nation's flu vaccine. The Medicines and Healthcare Products Regulatory Agency in the UK in October temporarily suspended the company's license to manufacture Fluvirin at the Liverpool facility, its only plant authorized to supply flu vaccine to the U.S. (See BioWorld Today, Oct. 6, 2004.)

UK regulators lifted the suspension in March but Chiron, citing start-up delays, recently dropped its estimated production for Fluvirin from a range between 25 million and 30 million doses to a range of 18 million to 26 million. (See BioWorld Today, June 16, 2005.)

Sanofi-Aventis Group, of Paris, is expected to supply the majority of the flu vaccine for the coming season, and GSK has filed for U.S. approval of its Fluarix. Gaithersburg, Md.-based MedImmune Inc. also is looking to treat the market with its intranasally administered FluMist.

For now, the eyes of investors are on Roche, which has "a period of 90 days to cure the breach" of contract, Flood said. "After that, there is a clause for alternate dispute resolution, and we would go into binding arbitration" for up to 18 months, she said.

As of Friday afternoon, Gilead had not heard from Roche. "We don't know what their reaction will be," she said.

Gilead's stock (NASDAQ:GILD) closed Friday at $41.75, up 33 cents.