Tuesday, April 28, 2009

Swine Flu Scare: Stock Market Bonanza for "Politically Connected" BioTech Companies

Global Research, April 28, 2009

The Swine Flu scare has boosted the stock market values of Big Pharma. Following initial reports from Mexico on the influenza outbreak, the demand for anti-flu drugs has skyrocketed.

Supported by media disinformation, an atmosphere of fear and intimidation has unfolded. Health “emergencies” have been declared in various parts of the US.

The most sought after influenza drugs are Tamiflu and Relenza. Treatment courses by the US government have been released from the national stockpile “to make sure health care providers are ready for any escalation in cases.”

Tamiflu is produced by the Swiss pharmaceutical giant Hoffman-La Roche on behalf of a US based biotech company Gilead Sciences, Inc. While the drug is produced by Roche, it was developed by Gilead Sciences Inc. which owns the intellectual property rights. 

Former Defense Secretary Donald Rumsfeld was one of the major shareholders of Gilead Sciences. In 1997, Rumsfeld was appointed Chairman of Gilead Sciences, Inc., a position which he held until becoming Secretary of Defence in the Bush administration in 2001. Rumsfeld was on the Board of Directors from the establishment of Gilead in 1987.

Fortune Magazine in a report published at the height of 2005 bird flu crisis, described Gilead as one of the most politically connected companies in the biotech industry. Rumsfeld’s interests and/or holdings in Gilead following his resignation in 2006 are not known.

Stock Values

The share price of Gilead on the NYSE has risen substantially since the announcement of the Mexican swine flu outbreak (see graph):

Chart for Gilead Sciences Inc. (GILD)

“The U.S. government released a quarter of its stockpiles of the drugs after declaring a national health emergency with 40 laboratory-confirmed cases of swine flu. Seven of those cases are in California, 28 in New York City, two each in Texas and Kansas, and one in Ohio.

Mexico raised the suspected death toll from its outbreak to 149 people — 20 of those confirmed as swine flu — and cancelled all schools until May 6. Nearly 2,000 people there have been hospitalized with serious cases of pneumonia.

Antiviral drugs are prescription medicines active against influenza viruses, including swine influenza viruses, according to the Centers for Disease Control. Swine influenza A viruses detected in the United States and Mexico appear resistant to two antiviral drugs — amantadine and rimantadine — but laboratory tests indicate the viruses are sensitive to Tamiflu, also known as oseltamivir, and Relenza, which is known as zanamivir.

The Tamiflu oral antiviral, approved in the U.S. to treat and prevent influenza A and B virus infection in people age one or older, is sold by F. Hoffmann-La Roche Ltd., which pays sales-related royalties to Gilead. Roche said it has 3 million packages of Tamiflu on standby — part of 5 million treatments donated to the U.N. health agency in 2006 — and can deliver the drug anywhere within 24 hours.” (San Francisco Business Times, 27 April 2009)