The fact is there is a US$800m seasonal market for anti-virals, $500m of which is in Japan. Can anyone explain why it is so strong in Japan and why that demand can’t be repeated elsewhere?

Relenza is not designed for seasonal use. As pointed out, it’s clearly not for casual consumption with many reasons to limit its dissemination, chief of which is the resistance issue that we now see in the predominant anti-viral Tamiflu.

But that does not mean anti-virals are useless. Recall what happened in Mexico. The deaths among healthy people were real, as was the fear. The job of governments is to ensure that in the event of a lethal pandemic, measures are in place to limit deaths. Vaccines cannot be brought in fast enough to do this and the evidence is against the ability of governments to impose measures fast enough to safeguard regions and countries from contagion, such is the ubiquity of air travel.

Thanks to Dean, I’ve learnt that Taleb commented on biotech as a play on the black swans, which captures the essence of my first comment. Modern *democractic* governments face difficulties in justifying any sort of preparation for rare yet high impact events. I do not wish a pandemic on anyone and I invested in Biota because I thought that enough government bodies were sage enough (and GSK savvy enough) to act on the small but extreme risk of an uncontrolled lethal flu pandemic. As it is, the quarter’s results suggest that governments will only continue stockpile rebalancing “after-the-fact” when the fickle start asking questions about the quality of first-line intervention. Evidence-based health funding sucks when it requires fresh bodies.

As Taleb pointed out in one of his books the biotech is one of the few industries which profits from good black swans, i.e. people underestimate the potential, they underestimate the probability of the home run. Biota’s business model is to sell that RHS black swan so they can operate a more ‘normal’ sustainable business. The model makes sense to me, though you’d be pushed to find an investor who thought it was being executed flawlessly. Biota were working Hep C, it recently got handed back to them. Flu is hugely profitable and an excellent target. The common cold, which I now have, is slightly annoying for most of us, but for a significant minority of people with respiratory problem is a serious concern. HRV has a good addressable market.

Hep C of course is one of the fattest targets out there, but Vertex is highly likely to stitch that market up; thus I was not concerned when BI handed back HCV.

http://www.nps.org.au/__data/assets/pdf_file/0015/30237/AntiviralsPositionStatement.pdf
http://www.nps.org.au/news_and_media/media_releases/repository/swine_flu_guidelines

I hold no position in BTA. Much of the information which I have cited and my own views maybe completely incorrect. None of this is advice to buy or sell the stock. Good luck !

“This is why it is difficult to purchase Relenza for personal use and doctors are relatively unaware of it.” I’m not sure if this is true. I would have thought most GP’s would be more aware because of the swine flu hysteria than ever before. If this could not help the underlying sales of relenza then what will? I suspect the main reason it is not prescribed more in australia is because it is not subsidized by the PBS and so costs $50 to the individual. Few people want to pay $50 for 1 day less flu symptoms and the risk of side effects. There is no public health reason for it to ever be subsidised by the PBS for seasonal flu. The reason for this is that is the economic benefit of the drug is not very good.

It’s use in pandemics is also questionable. I suppose governments have to do something, but how much actual evidence is behind stockpiling? Not much and maybe they are aware of it. You can find the following articles on cochrane.org
1. “It should be remembered that at times the manufacturer makes no claims for oseltamivir to influence symptoms and complications: “Tamiflu has not been proven to have a positive impact on the potential consequences (such as hospitalisations, mortality, or economic impact) of seasonal, avian, or pandemic influenza” (Doerler 2009). Since NIs do not prevent infection or stop nasal viral excretion, they may be a sub-optimal means of interrupting viral spread in a pandemic. If used to contain a severe pandemic outbreak, NIs should be part of a package of measures to interrupt spread, including physical measures (Jefferson 2009d), rather than used alone. Finally, the inability of NIs to prevent infection and to suppress viral nasal excretion raises doubts as to their effectiveness in interrupting viral spread in a pandemic, although NIs may have a role in addressing symptoms and complications. We conclude that in a pandemic, NIs should be used within a package of measures to interrupt spread, that is to say, together with barrier, distance and personal hygiene measures.”:”Neuraminidase inhibitors for preventing and treating influenza in healthy adults”. Cochrane review. 2010.
Jefferson, Tom; Jones, Mark; Doshi, Peter; Del Mar, Chris; Dooley, Liz; Foxlee, Ruth
2. QALY is Quality Life Year. “The incremental cost-utility (ICU) of seasonal influenza prophylaxis was estimated to be [pounds]16,630 per quality adjusted life year (QALY) for at-risk children; the ICU for all other subgroups was estimated to be in the range of [pounds]38,000 to [pounds]428,000 per QALY. The cost-effectiveness of oseltamivir and zanamivir for post-exposure prophylaxis was estimated to be below [pounds]30,000 per QALY in unvaccinated children, at-risk adults and the elderly.
“Amantadine, oseltamivir and zanamivir for the prophylaxis of influenza (including a review of existing guidance no. 67): a systematic review and economic evaluation.” Tappenden P, Jackson R, Cooper K, Rees A, Simpson E, Read R, Nicholson K. Health Technology Assessment. 2009;13(11):1-268. NHS Centre for Reviews and Dissemination. University of York, York

I watched Biota when it got to $5 or whatever years ago then back to 50c and more recently up again. In my simple opinion, Biota is a flawed company and for this reason I refuse to invest in it as a long term investment as I fail to see a viable business model. If you wanted to make money from researching and producing a vaccine for a viral illness, why choose the seasonal flu? Although it sounds sexy to produce a cure for a the common cold, this is a virus that rapidly mutates, for which a yearly vaccine will be much more effective from a public health perspective. In my humble opinion, if Biota had started with a reasonable business idea ie. spent their efforts on researching an antiviral for Hepatitis B or C or some other high prevalence stable virus that causes mortality and morbidity, then they would probably have something useful. Instead from what I can gather, which maybe wrong, they started with expertise in respiratory viruses and tried to produce a marketable product from a great research team (in respiratory viruses). I reckon they should have done this the other way around.

Maybe they will find a useful drug in the future, maybe Lani will be a super success. I’d rather put $200 on Kevin Rudd losing the next election ($1.4 currently). Someone commented what’s the difference between a super profit and a profit? It’s hilarious, tragic and highly amusing to watch!