The drug, which could be sold over-the-counter in two years, could be used to prevent everyday sniffles in otherwise health people, as well as prevent life-threatening infections in the elderly.
The Veldona lozenge, which tastes like a sweet and dissolves in the mouth, primes the immune system to attack every cold and flu bug. It has already been tested on people after successful trials on mice. The human trials are expected within weeks.
Professor Manfred Beilharz, chairman of the department of microbiology and immunology at the University of Western Australia in Perth, who tested the drug, said he believes it is the "golden fleece everyone has been looking for. This medicine is quite cheap to manufacture and very low dosage and doesn't seem to have any side-effects of any significance", he said.
The lozenge contains tiny amounts of interferon alpha, a protective protein the body naturally makes when attacked by a virus. When dissolved in the mouth, the protein is released tricking the immune system into thinking there is a bug in the body.
Prof Beilharz said: "The outposts of the immune system say, 'Hey, we've got a virus, let's gear up and get ready for it before the infection spreads too far.'"