The prospect of a bird flu outbreak may be panicking people around the globe, but it’s proving to be very 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 past 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.
I imagine most readers are aware of this, it has been buzzed about for some time, the interesting thing is that US corporate media is picking it up.
Roche bought the manufacturing rights from Gilead some time ago, and I don’t know the exact terms of the agreement, but I imagine we will all soon become familiar with them.
And it is also worth noting that whether the decision is made that a US pandemic would serve Washington’s interests or not, the same rich men will get richer.
