British order for Relenza boosts Biota share price

Biota receives royalties from sales of Relenza, which is licensed to pharmaceutical and health-care giant GlaxoSmithKline.

The British Government's Department of Health will buy 10.6 million treatment courses of the drug, which is used to treat avian flu and other strains of influenza. Biota expects to earn up to $18 million from the sale.

For 4 years, Biota and GlaxoSmithKline were locked in a legal battle over how Relenza had been developed and marketed, with Biota claiming the larger company did not use its "best endeavours" to make the drug a success.

But in mid-2008 the companies settled and Biota received a $20 million payout, helping it to recoup about half its legal costs.

Yesterday, Biota shares jumped as much as 27 per cent to 56 but they closed at 48.5, up 4.5, or 10.2 per cent. Britain and France now have stockpiles that will cover 50 per cent of their populations.

Other countries including Australia have also created anti-viral stockpiles. Tamiflu, which is marketed by Swiss health-care group Roche, and Relenza would be distributed if there were an influenza pandemic.

Biota managing director and chief executive Peter Cook said Tamiflu had long been the most popular choice for stockpiling. But Relenza would now make up about 30 per cent of the British stockpile, while other governments were likely to buy the drug when existing stocks reachedtheir five-year shelf life.

Meanwhile, the Government yesterday released a report from the Pharmaceuticals Industry Strategy Group recommending the introduction of an industry investment fund to support pharmaceutical manufacturing and research and development.

Thomas Faunce, associate professor of law and medicine at the Australian National University, said that while it was acceptable to use Government money to help support research and development, it was necessary that the Government had a say in driving drug research for the public good.