March 17, 2006

CORRECTED – Roche aims for 400 mln Tamiflu doses by end 2006

In ZURICH item of March 16 headlined "Roche aims for 400
mln Tamiflu doses by end 2006" please read in paragraph 13 ...
another Chinese company, HEC Group ... instead of ... another
Chinese company, Hangzhou Electrochemical Group Ltd. ...

A corrected version follows.

By Tom Armitage

ZURICH (Reuters) - Swiss drug maker Roche is boosting
output of its flu drug, Tamiflu, by a third to meet increased
demand from governments building stockpiles for a potential
pandemic triggered by bird flu.

The Basel-based group said on Thursday it would lift
production by an additional 100 million treatments to a total
of 400 million treatments by the end of the year, after
striking deals with external producers.

Roche Holding AG expects 1.1 billion to 1.2 billion Swiss
francs ($921 million) in sales of the drug to governments this
year, excluding its sales as a treatment for regular influenza.

The production increase is designed to meet government
orders for millions of doses of the drug, which has been
recommended by experts as one of the most effective ways of
treating humans who may become infected with evolving forms of
the H5N1 strain of bird flu.

Some scientists have questioned how well Tamiflu will
perform in countering new strains of the disease and, in a bid
to answer these uncertainties, Roche said it was conducting a
range of studies to examine the drug's best use.

"Roche has in place a number of research initiatives to
answer questions raised on the use of Tamiflu against the
evolving H5N1 avian virus," David Reddy, Roche's executive in
charge of bulk sales of the drug, said in a statement.

Roche shares were outperforming the European drugs sector,
but were slightly weaker than the Swiss market.

"We stand by the guidance of February when we forecast 1.1
to 1.2 billion Swiss francs for pandemic use," Roche
pharmaceuticals executive William Burns told reporters in Basel
on Thursday. "That is the best estimate we can give on the
government orders we have."


Bowing to pressure to increase capacity, Roche has struck
deals with more than 15 contractors in nine different

These companies -- including some major pharmaceuticals and
chemicals groups, such as Sanofi-Aventis, Clariant AG and DSM
NV -- will produce intermediate ingredients or all of the drug
to help speed up production.

Roche has maintained that Tamiflu is tricky to make,
requiring a chain of processes, some of which are dangerous.
The drug is based on shikimic acid, which can be derived by
fermentation or from the pod of the star-shaped anise fruit.

Sanofi on Thursday said it struck an exclusive deal to
produce shikimic acid by fermentation for Roche. The French
drugmaker said it will produce the key ingredient at its
Saint-Aubin-les-Elbeuf plant in France, with all the shikimic
acid obtained going to Roche for Tamiflu production.

In addition to India's Hetero and China's Shanghai
Pharmaceuticals Co Ltd., with which deals were previously
announced, Roche has also granted a production sub-licence to
another Chinese company, HEC Group.

Roche is also looking at sharing know-how to help start up
production in Africa, a move that was welcomed on Thursday by
Margaret Chan, the WHO's top pandemic official.

"We are pleased with this development," she said in a
statement to Reuters in Geneva. "Roche began talking about
working with partners months ago. We are happy to see them
keeping their commitments."

Tamiflu was invented by Gilead Sciences Inc. and licensed
to Roche in 1996.

The drug, a neuraminidase inhibitor known generically as
oseltamivir, is seen as the best defense against a human
pandemic that could be started by bird flu, which has been
found in wild birds across Asia and Europe.

The highly pathogenic H5N1 strain of bird flu has killed
about 100 people, but experts fear a pandemic if the disease
develops to a point where it can be transmitted easily between

Another neuraminidase inhibitor, GlaxoSmithKline Plc's
inhalable Relenza, is also being stockpiled by some

Roche has accepted pandemic orders for Tamiflu from more
than 65 countries worldwide, with a number of nations ordering
enough of the drug to cover 20 percent to 40 percent of their

For a FACTBOX on Tamiflu producers please click on

(additional reporting by Paul Arnold in Basel, Stephanie
Nebehay in Geneva and Bill Berkrot in New York)