Gilead Sciences, Inc. has delivered a notice of termination to F. Hoffmann-La Roche Ltd (Roche) for material breach of the parties 1996 Development and License Agreement for Tamiflu (oseltamivir phosphate), an antiviral pill for the treatment and prevention of influenza. Through this action, Gilead is seeking to terminate the 1996 agreement, which would result in the rights to Tamiflu held by Roche reverting to Gilead, states a Gilead release.

Tamiflu is the only antiviral pill that has demonstrated activity against the most common strains of the virus and is approved for both the treatment and prevention of influenza infection. Ensuring that Tamiflu is made as widely available as possible is necessary for the protection of public health. Gilead intends to provide physicians, public health officials and consumers with greater access to and information about Tamiflu, release says.

"Despite our repeated communication of concerns over the last several years, Roche has not adequately demonstrated the requisite commitment to Tamiflu since its launch in the United States nearly six years ago, nor has it allocated the necessary resources to realize the potential of the product as a treatment and preventive for influenza," said John C. Martin, President and chief executive officer, Gilead Sciences. "Gilead is taking this action in the interest of our shareholders and, importantly, because it is essential for public health that healthcare professionals and consumers have improved access to information about Tamiflu, as well as to the product itself," he added.

According to the release, Gileads notice of termination describes material breaches of obligations by Roche under the 1996 Agreement in the following areas: (1) Roches failure to use best efforts to commercialize Tamiflu by adequately and sustainably promoting and marketing the product in all significant markets, including the failure to launch in a number of markets where the product has been approved; (2) Roches failure to use best efforts to commercialize Tamiflu as evidenced by past problems with the manufacturing process that led to shortages in product supply; and (3) Roches failure to properly calculate and pay the royalties fairly owed to Gilead.