Suprise Surprise... look who used to run the bird flu cure company...

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H

Mon, 31 Oct 2005 06:27:29 -0800 (PST)

Suprise Surprise... look who used to run the " bird flu " cure

company...

 

 

 

 

http://money.cnn.com/2005/10/31/news/newsmakers/fortune_rumsfeld/index.htm

 

Rumsfeld's growing stake in Tamiflu

Defense Secretary, ex-chairman of flu treatment rights holder, sees

portfolio value growing.

 

October 31, 2005: 9:12 AM EST

By Nelson D. Schwartz, Fortune senior writer

 

 

 

NEW YORK (CNN/Money) - The prospect of a bird flu outbreak may be

panicking people around the globe but it's proving to very be good

news for Defense Secretary Donald Rumsfeld and other politically

connected investors in Gilead Sciences, the California biotech company

that owns the rights to Tamiflu, the influenza remedy that's now the

most-sought after drug in the world.

 

 

 

Rumsfeld served as Gilead (Research)'s chairman from 1997 until he

joined the Bush administration in 2001, and he still holds a Gilead

stake valued at between $5 million and $25 million, according to

federal financial disclosures filed by Rumsfeld.

 

 

 

The forms don't reveal the exact number of shares Rumsfeld owns, but

in the last six months fears of a pandemic and the ensuing scramble

for Tamiflu have sent Gilead's stock from $35 to $47. That's made the

Pentagon chief, already one of the wealthiest members of the Bush

cabinet, at least $1 million richer.

 

 

 

Rumsfeld isn't the only political heavyweight benefiting from demand

for Tamiflu, which is manufactured and marketed by Swiss pharma giant

Roche. (Gilead receives a royalty from Roche equaling about 10% of

sales.) Former Secretary of State George Shultz, who is on Gilead's

board, has sold more than $7 million worth of Gilead since the

beginning of 2005.

 

Another board member is the wife of former California Gov. Pete Wilson.

 

 

 

" I don't know of any biotech company that's so politically

well-connected, " says analyst Andrew McDonald of Think Equity Partners

in San Francisco.

 

 

 

What's more, the federal government is emerging as one of the world's

biggest customers for Tamiflu. In July, the Pentagon ordered $58

million worth of the treatment for U.S. troops around the world, and

Congress is considering a multi-billion dollar purchase. Roche expects

2005 sales for Tamiflu to easily surpass $1 billion, compared with

$266 million in 2004.

 

 

 

Rumsfeld recused himself from any decisions involving Gilead when he

left Gilead and became Secretary of Defense in early 2001. And late

last month, notes a senior Pentagon official, Rumsfeld went even

further and had the Pentagon's general counsel issue additional

instructions outlining what he could and could not be involved in if

there were an avian flu pandemic and the Pentagon had to respond.

 

 

 

As the flu issue heated up early this year, according to the Pentagon

official, Rumsfeld considered unloading his entire Gilead stake and

sought the advice of the Department of Justice, the SEC and the

federal Office of Government Ethics.

 

 

 

Those agencies didn't offer an opinion so Rumsfeld consulted a private

securities lawyer, who advised him that it was safer to hold on to the

stock and be quite public about his recusal rather than sell and run

the risk of being accused of trading on insider information, something

Rumsfeld doesn't believe he possesses. So he's keeping his shares for

the time being.