By Ben Hirschler
LONDON (Reuters) - The threat of a pandemic triggered by a new flu strain that has killed more than 100 people in Mexico will provide a windfall for some makers of drugs and vaccines.
Switzerland's Roche Holding AG
Shares in the two companies rose 4 and 3 percent respectively in early trade on Monday, while stock in Australia's Biota Holdings Ltd
But analysts cautioned that the commercial impact would be muted by the fact that many governments had already placed substantial stockpile orders because of the previous threat posed by avian flu.
"There is certainly a perceived benefit and there probably will be some actual benefit, but not as much as the first time round with avian flu," said Jeff Holford, an industry analyst at stockbroker Jefferies.
Relenza, known generically as zanamivir, and Tamiflu, or oseltamivir, have both been shown to work against the new flu strain, which has spread to the United States and as far as New Zealand.
Roche said it was working on scaling up production of Tamiflu but noted that the lead time for the drug from synthesis of the product to packaging was eight months.
"We are in the process of reinstating our activities and checking all the processes to see how we can scale up," a spokeswoman said.
"We've always made it clear that this cannot happen overnight.
The World Health Organization (WHO) has not yet asked Roche to deploy 3 million treatment courses it has as a "fire blanket" to use wherever a pandemic breaks out, she added.
The WHO also has an additional 2 million packs that Roche donated in the past for use in countries which are not so well prepared for a pandemic.
Demand has historically been greatest for Tamiflu, which is given as a convenient tablet, while Relenza must be inhaled.
Recently, though, Glaxo's product has been winning more business as buyers diversify their medicine reserves. In the first quarter of 2009 sales of Relenza into government stockpiles -- notably Britain and Japan -- outstripped those for Tamiflu.
Tamiflu was originally invented by U.S. biotech company Gilead Sciences Inc
The flu outbreak, which poses the biggest risk of a large-scale pandemic since avian flu surfaced in 1997, will also fuel demand for vaccines from major producers like Sanofi-Aventis SA
Shares in U.S. biotech company Novavax Inc
(Reporting by Ben Hirschler; Editing by Greg Mahlich and Hans Peters)
