Swine flu panic hits Australia, sends shares in local biotech up 85%

The share price of small Australian biotechnology company Biota Holdings jumped by 82% yesterday on expectations that governments would stock up on its anti-flu drug Relenza as protection against outbreaks of swine flu.

Biota Holdings stock finished yesterday at $1.58 and has jumped another 6% in early trade. It is the highest Biota shares have traded in two and a half years, when the bird flu scare sent investors into a frenzy.

The jump in Biota shares comes as Australian health officials have revealed they are testing 19 people for swine flu and searching for another 300 people who could have come in contact with the disease.

A spokesman for Health Minister Nicola Roxon said swabs had been taken from people after visiting doctors on return from Mexico, the United States and Canada with mild flu symptoms.

But Roxon has assured the public that Australia has stockpiled around 8.7 million doses of anti-viral drugs Tamiflu and Relenza, one of the biggest stockpiles of any country in the world.

Biota licenses Relenza to pharmaceuticals giant GlaxoSmithKline, which has announced it will immediately increase production of Relenza from its Australian factory to meet the expected surge in demand.

Only two companies in the world make anti-flu drugs: Biota and big pharmaceuticals company Roche, which manufacturers Tamiflu. Analysts estimates Roche’s product currently has 80% of the market, but Biota’s drug is quickly winning share.

According to company estimates, government orders of Relenza were 20% higher than those for Tamiflu in the first quarter of 2009. Biota said late last week that its indicative royalties for that period were $32.3 million, with chief executive Peter Cook attributing the strong result to stockpiling by the Japanese and British governments.

The US’s Centers for Disease Control and Prevention recommends that patients take Relenza, or an unspecified anti-viral drug combination, rather than Tamiflu.

While Biota has been buoyed by the swine flu panic, airline stocks including Qantas and Virgin Blue have been sold off on concerns that tourist numbers will plummet as a result of the flu outbreak.

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