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Swine Flu Increases Demand for Face Masks, Antivirals (Update1)
http://www.bloomberg.com/apps/news?pid=20601087&sid=aoOt3AARvryo&refer=home
By Carol Wolf


April 28 (Bloomberg) -- Drug stores are buying more antiviral drugs and hand sanitizers while makers of face masks are increasing production to meet growing demand as concerns rise over the spread of swine flu.

CVS Caremark Corp., Rite Aid Corp. and A.S. Watsons placed additional orders for Roche Holding AG’s drug Tamiflu, while 3M Co. and Alpha Pro Tech Ltd. are making more face masks. Matsumotokiyoshi Holdings Co. is boosting supplies of sanitizers, soaps and masks.

The companies stand to benefit from increased sales of items that help prevent and treat what may become a global outbreak as swine flu cases in the U.S. doubled to 40 and Mexico’s toll of flu-related deaths reached as many as 149. The World Health Organization has raised its pandemic alert level because of the growing threat.

“If we continue to see a steady stream of news and this becomes a fixation issue with the public, this could have a substantial effect on companies,” said Peter Sorrentino, a senior fund manager at Cincinnati-based Huntington Asset Advisors Inc. “These are very low-cost, high-margin items.” Huntington overseas about $13.3 billion in assets.

Flu Strains

Swine flu is a respiratory disease of pigs caused by type-A influenza that regularly leads to outbreaks among the animals, according to the Atlanta-based Centers for Disease Control and Prevention. Three main human flu strains circulate and cause 250,000 to 500,000 deaths a year in seasonal epidemics, according to the WHO.

CVS Caremark, the biggest U.S. drug-store chain, said sales of face masks rose on its Web site on growing concern about the spread of swine flu in the U.S. The company, based in Woonsocket, Rhode Island, also has ordered more Tamiflu as prescriptions for the drug climb, said Michael DeAngelis, a CVS spokesman.

There is no vaccine for the virus. Homeland Security Secretary Janet Napolitano said 25 percent of “courses of treatments” of drugs, known as antivirals, were being released from U.S. stockpiles. In all, there are 50 million courses, she said. Among those are Tamiflu, sold by Roche, based in Basel, Switzerland, and Relenza, from GlaxoSmithKline Plc of London.

Hong Kong, Singapore

Hong Kong’s General Chamber of Pharmacy Ltd., an organization of more than 200 small drug stores, said most members have sold all their stocks of face masks. Watsons, a unit of Hutchison Whampoa Ltd. with 150 outlets in Hong Kong, said it’s seen a surge in demand for the masks.

A Watsons outlet in the Singapore airport has seen demand for face masks jump 10 times and the company is stocking up on Tamiflu “in anticipation of greater demand,” said marketing manager Irene Lau.

An outbreak of severe acute respiratory syndrome, or SARS, killed 299 people in Hong Kong in 2003, forcing people to wear face masks when going outdoors. Travel to Asia plunged during the SARS outbreak, which killed 770 people worldwide.

Rite Aid, the third-largest U.S. drugstore chain, also added to its Tamiflu supply. Sales of personal-hygiene products have increased overall, particularly in New York and California, Cheryl Slavinsky, a spokeswoman for the Camp Hill, Pennsylvania- based company, said by telephone.

Matsumotokiyoshi, Clorox

“If SARS is any indication, you would see cleaning products like soaps do well,” said Ali Dibadj, an analyst with Sanford C. Bernstein & Co. in New York.

Matsumotokiyoshi Holdings Co., Japan’s biggest drug retailer by sales, has been increasing supplies of sanitizers, soaps and masks “since the outbreak of a new form of bird flu last summer,” said spokesman Nobuharu Takahashi. “Prices of these products haven’t risen, but it may be a little difficult to keep them in stock.”

Clorox Co., based in Oakland, California, said it’s making more bleach to meet growing demand for disinfectant and is restricting travel to and from Mexico. It has pulled together a group of employees from distribution to manufacturing to coordinate flu-related efforts, said Michael Costello, general manager of Clorox Latin America and Europe.

3M has stepped up worldwide production of respiratory masks in response to the swine flu outbreak, Jacqueline Berry, a spokeswoman for the St. Paul, Minnesota-based company, said in a telephone interview. “We are getting demand from government agencies and hospitals worldwide,” said Berry, declining to give production numbers.

Biological Contaminants

The respirators shield the user from biological contaminants. They differ from regular face masks, which are designed to help prevent the spread of contaminants from an infected person. 3M makes the respirators in the U.S., Latin America, Europe and Asia, Berry said.

Alpha Pro Tech, based in Markham, Ontario, has boosted production of masks designed to protect against the virus, Chief Executive Officer Al Millar said in a telephone interview. Swine flu is a particularly small virus that can penetrate many other types of masks, he said.

“We have a very nice stock of respiratory masks on the floor at Alpha” Millar added. “We certainly won’t have any problems with supply.” The filter material for the masks can take as long as six weeks to deliver even without a crisis, he said.

Walgreen Co., the second-largest U.S. drug-store chain has seen an increase in sales of masks and is “well stocked on Tamiflu,” said Tiffani Washington, a spokeswoman for the Deerfield, Illinois-based company.

Wal-Mart Stores Inc. spokesman Greg Rossiter said the world’s largest retailer is monitoring the outbreak and declined to comment on the Bentonville, Arkansas-based company’s sales of antiviral drugs and personal-hygiene products.

Retailers and suppliers have used crises from hurricane Katrina in New Orleans to the SARS outbreak in Asia to hone their crisis-response procedures, said Mark Grayson, a spokesman for Rx Response, which coordinates distribution of medical supplies among government agencies, manufacturers and retailers.

To contact the reporter on this story: Carol Wolf in Washington at [e-mail].

Last Updated: April 28, 2009 05:44 EDT