LONDON: The threat of a pandemic triggered by a new flu strain that has killed more than 100 people in Mexico will provide a windfall for some makers of drugs and vaccines.

Switzerland's Roche Holding AG and Britain's GlaxoSmithKline Plc are the two big pharmaceutical groups set to benefit most as governments and corporations step up orders for their drugs Tamiflu and Relenza.

Shares in the two companies rose 4 and 3 percent respectively on Monday, while Australia's Biota Holdings Ltd, which licensed Relenza to Glaxo, soared 82 percent.

But analysts cautioned that the commercial impact would be muted by the fact that many governments had already placed substantial stockpile orders because of the previous threat posed by avian flu.

"There is certainly a perceived benefit and there probably will be some actual benefit but not as much as the first time round with avian flu," said Jeff Holford, an industry analyst at stockbroker Jefferies.

Relenza, known generically as zanamivir, and Tamiflu, or oseltamivir, both appear to work against the new flu strain, which has spread to the United States and as far as New Zealand.

DRUG RESISTANCE

Roche said it was working on scaling up production of Tamiflu but noted that the lead time for the drug from synthesis of the product to packaging was eight months.

Although the WHO said Tamiflu was working against strains of the new H1N1 swine flu some analysts expressed concern it might be less effective than Relenza, since there have been widespread reports of resistance by seasonal H1N1 flu.

James Knight, an analyst at stockbroker Collins Stewart, said Relenza had potentially the biggest upside as a result.

Demand has historically been greatest for Tamiflu, which is given as a convenient tablet, while Relenza must be inhaled, and Roche sold some 4 billion Swiss francs of Tamiflu to governments in 2006 and 2007.

Recently, though, Glaxo's product has been winning more business as buyers diversify their medicine reserves.

In the first quarter of 2009 sales of Relenza into government stockpiles -- notably Britain and Japan -- outstripped those for Tamiflu, although total Relenza sales of 222 million pounds were still below the 401 million Swiss francs generated by Tamiflu.

Tamiflu was originally invented by U.S. biotech company Gilead Sciences Inc.

VACCINE PREPARATIONS

The flu outbreak, which poses the biggest risk of a large-scale pandemic since avian flu surfaced in 1997, will also fuel demand for vaccines from major producers like Sanofi-Aventis SA, Glaxo, Novartis AG and Baxter International Inc, although making shots against the new strain will take months.

Companies said they were in talks with the WHO and the U.S. Centers for Disease Control and Prevention about developing a vaccine against swine flu and were also discussing capacity issues.

At least 20 companies make flu vaccines. Other smaller players include Australia's CSL Ltd and nasal spray maker MedImmune, acquired by AstraZeneca Plc in 2007.

Shares in U.S. biotech company Novavax Inc, which is working on new types of vaccines, jumped 75 percent on Friday.