Roche shocked at poor marketing claim

Biotech firm Gilead said it wants to regain rights to flu pill Tamiflu, accusing marketing partner Roche of failing to promote the drug adequately.

Gilead said the Swiss firm had made a ìmaterial breachî of the companiesí 1996 development and licensing deal for Tamiflu, a drug many scientists consider to be the best potential weapon against avian flu.

In a statement, Gilead said Roche had failed to promote the drug effectively in all markets and had suffered manufacturing problems that led to shortages of the product.

Shocked Roche responded by saying it was ìdeeply disappointedî by Gileadís demand and pledged to open swift negotiations to settle the dispute.

ìWe see no material financial impact from this,î said Roche pharmaceuticals division chief executive William Burns, adding that he believed the company had handled the marketing of Tamiflu in a responsible way.

Gilead chief financial officer, John Milligan, said the notice of termination to Roche would not impact on the biotech firmís 2005 earnings expectations.

Mark Perry, Gileadís senior business adviser added the biotech firm had already opened discussions with potential alternative business partners.

ìOver the last three years, weíve become very vocal with Roche about their failure to boost marketing efforts,î he added.

Analysts said a final settlement could be years away, with an out-of-court settlement being the most likely conclusion.

Exponential sales increase

Denise Anderson, pharma analyst at Swiss brokerage Kepler Equities, said that while there may be a ìgrain of truthî in certain complaints, she described claims that Roche hadnít tried to promote Tamiflu as ìnonsenseî.

ìIf you look at the literature, Roche scientists are the ones that really built up the whole idea of pandemic use of Tamiflu,î she said. ìItís rare for things like this to happen even for drugs that are marketed badly, but for ones where the sales are going up exponentially itís especially strange.î

The move comes at a time when sales of Tamiflu have risen sharply related to preparations for a future global flu pandemic, which the World Health Organisation considers inevitable.

If Gilead succeeds in acquiring the rights to Tamiflu, it will continue with Rocheís earlier efforts to provide the drug to governments that have been stockpiling it in preparation for a global pandemic of avian flu or other flu strains.