Glaxo orders point to big flu vaccine windfall

Glaxo orders point to big flu vaccine windfall

LONDON,(Reuters) - GlaxoSmithKline Plc (GSK.L) won a further 22 government orders for its H1N1 swine flu vaccine in the last two months, taking the total number of doses ordered to 440 million worth some $3.5 billion.

The Britain-based drugmaker said on Tuesday first supplies were being shipped to governments this week and deliveries would continue through both the fourth quarter of 2009 and the first half of 2010.

The addition of a further 149 million orders since Aug. 4, when Glaxo last gave an update, points to a substantial sales and profit windfall as a result of the swine flu pandemic.

Governments around the world are preparing to start mass immunisation programmes ahead of a feared second wave of infection as the northern hemisphere heads into winter.

Glaxo previously said it expects to sell its H1N1 vaccine for around the same price as seasonal flu shots, which fetch about five pounds ($7.96) a dose, implying its total booked orders are now worth some 2.2 billion pounds ($3.5 billion).

It also has a variety of agreements in place with the U.S. government to supply pandemic products worth an additional $250 million and discussions are continuing with various other governments for further vaccine supplies.

"The market may look through GSK's pandemic sales as being a one-off," Citigroup analyst Kevin Wilson said in a note.

"However, we believe that pandemic sales will lead to potential earnings surprises through the fourth quarter of 2009 to the second quarter of 2010 when overlaid on the rest of the business, which is now set to recover from U.S. generic washouts."