Swiss pharmaceutical concern Roche says it is increasing production of its flu drug Tamiflu by a third to meet increased demand.
The Basel-based group said on Thursday it would lift 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.
Governments around the world have been building stockpiles to deal with a potential pandemic triggered by avian flu.
Roche said it expects SFr1.1 billion to SFr1.2 billion ($850 million-$930 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 is 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 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 slightly higher in a weaker overall Swiss market, outperforming the European drugs sector.
"We stand by the guidance of February when we forecast SFr1.1 to 1.2 billion for pandemic use," the head of Roche's pharma division, William Burns, told a news conference 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 external contractors in nine different countries.
These firms - including major pharmaceuticals and chemicals groups Sanofi-Aventis, Switzerland's Clariant and DSM - will produce intermediate ingredients or all of the drug in order to help speed up production.
In a statement, Clariant said on Thursday it was the manufacturing partner for a compound known as epoxide, an intermediate in the synthesis of Tamiflu.
The company said it had been supplying components used in synthesis since the launch of Tamiflu.
In a related development, the Swiss Federal Veterinary Office reported that two new cases of bird flu had been found in the north of the country, bringing the total number to 17.
The office said the latest cases involved a pochard found in Romanshorn on Lake Constance and a duck in Schaffhausen.
Samples have been sent to the European Union's testing laboratory in England to determine if they were carrying the deadly H5N1 strain.
Three cases of H5N1 have so far been confirmed in Switzerland.
swissinfo with agencies
Roche says 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.
Tamiflu was invented by Gilead Sciences and licensed to Roche in 1996.
Known generically as oseltamivir, the drug 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 among humans.
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