Glaxo Announces Breakthrough On Bird-Flu Vaccine

GlaxoSmithKline PLC said it has produced an effective bird-flu vaccine for humans and could begin producing the shots at year's end, leaving it to governments to decide whether to begin ordering the shots.

Glaxo, the world's second-biggest drug maker by sales behind Pfizer Inc., called the findings a breakthrough but said it needs to gather additional data before it can answer several important questions, including how much of the vaccine it will be able to manufacture.

In a clinical trial of 400 people, two doses of Glaxo's vaccine produced a strong immune response against the H5N1 virus in more than 80% of people who received it. Significantly, the vaccine achieved this response with a relatively low level of active ingredient, or antigen, which could help Glaxo produce more shots to cover more of the world's population. Other companies developing H5N1 vaccines have reported less-promising results in tests. (most recent pharmaceutical pipeline changes at http://www.chartsbank.com/PipelineList.aspx )

Global health officials worry the H5N1 virus could eventually mutate into a strain that would pass easily from person to person, which could spark a pandemic. Glaxo believes its vaccine would give people some protection against some mutations of H5N1, but it won't know how much until it conducts further tests.

Some governments, including the U.S., have considered inoculating their populations with an H5N1 vaccine before a pandemic hits, on the assumption that the shot would provide some level of protection against a pandemic strain. This would help buy time until a vaccine matching the pandemic strain could be produced.

In a telephone interview, Glaxo Chief Executive Jean-Pierre Garnier said the company is beginning to speak with governments about this kind of prepandemic use of Glaxo's vaccine. "Several governments want us to present the data -- they are very keen to find out what we have," he said.

Glaxo said it expects to submit the vaccine for regulatory approval in coming months. In the U.S., the Food and Drug Administration has pledged a speedy review process for pandemic-flu vaccines.

Glaxo announced its bird-flu findings as it reported a 14% rise in second-quarter net profit to GBP 1.32 billion ($2.43 billion) from GBP 1.16 billion a year earlier. Sales rose 11% to GBP 5.81 billion from GBP 5.25 billion. Glaxo raised its full-year earnings outlook, saying earnings per share would rise by about 12% instead of 10%. Some analysts said they had expected a bigger upgrade. Glaxo shares ended down 1.5% at GBP 15.07 in London.

Deutsche Bank AG estimated in a research note that the H5N1 vaccine could potentially bring in annual sales of $2 billion for Glaxo.

Glaxo uses an inactivated strain of the H5N1 virus to make the shots. It has made the vaccine in small batches but is uncertain how much of the inactivated virus will be needed to make the shots in industrial quantities. Glaxo also is uncertain of demand.

A company spokesman said Glaxo likely would charge GBP 4 to GBP 7 a shot, or about what it charges for a seasonal-flu shot. Mr. Garnier said Glaxo plans to speak with the Bill and Melinda Gates Foundation and other charitable organizations about providing funds to buy shots for poorer countries. The H5N1 virus so far has killed more than 130 people world-wide.

Two doses of Glaxo's vaccine, each containing 3.8 micrograms of antigen, achieved the 80% protection rate. By contrast, Sanofi-Aventis SA earlier this year said two doses of its vaccine, each containing 7.5 micrograms of antigen, achieved a 40% protection rate.