Roche aims for 400 mln Tamiflu doses by end 2006

ZURICH, Mar 16 (Reuters) Swiss drug maker Roche is boosting output of its flu drug Tamiflu by a third in order to meet increased demand from governments building stockpiles to deal with a potential pandemic triggered by bird flu.

The Basel-based group today said it would lift production capacity 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 said it expects 1.1 billion to 1.2 billion Swiss francs 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.

Shares in Roche Holding AG were outperforming the European drugs sector but 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 today. ''That is the best estimate we can give on the government orders we have.'' PRODUCTION RAMP-UP Bowing to pressure to increase capacity, Roche has struck deals with more than 15 external contractors in nine different countries.

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

Roche has maintained that Tamilfu 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.

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

In addition, Roche is 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 defence 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 humans.

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

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

Reuters OM DB2158