ANALYST: BARR, MYLAN LIKELY TO BE TAPPED FOR TAMIFLU PRODUCTION

U.S.-based generic firms Mylan Laboratories and Barr Laboratories have a leg up in the race to win a sublicense for Roche's highly sought-after antiviral Tamiflu, according to a recent Banc of America Securities report.

"To address the 81 million courses of antivirals that the HHS has set as a goal for stockpiling, we believe that licensing of Tamiflu production for pandemic purposes will occur. As two U.S.-headquartered companies, we believe that Barr Labs ... and Mylan ... will likely be involved," writes Banc of America Securities analyst David Maris in the report. Swiss drugmaker Roche, which makes Tamiflu, may also tap Ranbaxy Laboratories and Teva to boost production, Maris adds.

Roche, which is under pressure from U.S. lawmakers and international officials to increase production of Tamiflu (oseltamivir phosphate), said earlier this month it has entered into discussions with eight companies who want to produce Tamiflu and is considering applications from roughly 150 other parties. The company is hoping to develop a short list of possible sublicense candidates by the end of the month.

Assuming Roche awards sublicenses for Tamiflu, the total market opportunity for generic firms would be somewhere in the range of $81 million to $203 million, assuming a profit of $0.10 to $0.25 per capsule, Maris predicted.

"Assuming a $203 million generic drug opportunity shared equally among four players," Maris said, the deals could boost Barr's earnings by 30 cents per share, Mylan's earnings by 16 cents, and Teva's earnings by 6 cents