Australian government to stockpile Relenza

The Commonwealth government has confirmed that it will add 1.8 million courses of Relenza to the National Medical Stockpile in preparation for a possible influenza pandemic.

Relenza is the anti-flu drug developed by Melbourne-based Biota Holdings (ASX:BTA) and commercialised by GlaxoSmithKline (GSK). Biota earns a 7 per cent royalty from Relenza sales and the company is currently suing GSK for up to $430 million for the pharmaceutical company's alleged failure to promote and support Relenza in the five years since it was launched.

The government expects that the new Relenza deliveries will commence in April 2006 and be completed within 12 months. When the new supplies of Relenza plus additional Roche's rival antiviral Tamiflu powder are available, the Commonwealth government believes it will have enough antivirals to provide coverage for nearly 44 per cent of the Australian population.

While Biota CEO Peter Cook said that Glaxo did not keep Biota in the loop when it came to Relenza's marketing, sales plans and orders, GSK has confirmed "that what was in the [health minister Tony Abbott's] press release was consistent with the commercial arrangements reached between GSK and the Ministry of Health."

GSK also told Biota that the Relenza orders would be supplied from its Melbourne facility, based in Boronia, said Cook. "If you read between the lines that means Glaxo's Boronia facility for Relenza will be up and running again by the end of March ready to supply from April," he said.

The Australian government's announcement follows similar stockpiling of Relenza by countries such as France, the US, Germany and Hong Kong.

Cook said that the news was "very positive because it's part of a continuing scene of governments being interested in the material and that Relenza seems to have a therapeutic place in pandemic stockpiling."

Molloy to maintain Australian ties

Meanwhile, Biota's former CEO, Peter Molloy, who formally left the company on December 9, has said in a statement that his plans in 2006 "include serving as a director on two or three boards in Australia and the US, where I can make a contribution."

Molloy has previously stated that his reason for leaving Biota was because the company wanted an Australian-based CEO and he was unwilling to move back from the US.

"Thus far I have committed to one board of an Australian biotech company," said Molloy in the statement. The Age this morning reported that he has joined unlisted Australian cancer vaccine developer Vaccinoma as a director.