Biota soars on news of US$5.6m NIH grant

Shares in Biota (ASX:BTA) jumped 14 cents to $0.66 when the Melbourne anti-viral drug developer announced it had been awarded a US$5.6 million (AUD$8 million) US Government research grant to develop a long-acting influenza drug.

The grant, from the National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health, is one of the largest research grants ever awarded to an Australian biopharmaceutical company.

Biota, developer of the anti-influenza drug zanamvir (GlaxoSmithKline's Relenza) is the beneficiary of US concerns about the depletion of the nation's influenza vaccine stocks during the severe influenza epidemic in the northern hemisphere in 2003, and the rising threat of a global influenza pandemic.

The World Health Organisation is currently investigating a potential case of human-to-human transmission of the deadly H5N1 "bird 'flu" strain of influenza in Thailand. US health authorities also fear terrorists could deliberately disseminate a deadly new influenza strain like H5N1, that would spread rapidly around the globe, killing hundreds millions of people.

"NIH grants of this magnitude to companies outside the US are not common. It is a tribute to Biota's recognised expertise in the influenza field," said Biota CEO Peter Molloy.

Biota will use the NIAID grant to accelerate its research project to develop a second-generation, long-acting drug neuraminidase inhibitor (LANI).

Zanamavir, developed by CSIRO researchers in the 1980s, is a potent inhibitor of neuraminidase, the enzyme that allows newly formed virus particles to bud from the surface of infected cells lining the respiratory tract.

GSK's commercial formulation, Relenza, is delivered intranasally as a dry powder; frequent dosing not only prevents influenza, it alleviates and shortens an established influenza infection.

But the requirement for frequent dosing is the Achilles heel of the current generation of neuraminidase inhibitors, in the event of a pandemic or bioterrorist attack, according to Biota.

Biota researcher Dr Jane Ryan, who is principal investigator on the NIAID grant, is leading a three-year project to develop a nebulised, or wet-aerosol LANI, that will provide longer-lasting protection than Relenza or Tamiful.

Biota aims to develop a LANI that would need to be administered only once a week. In commercial form, it would be administered as an inhaled powder, like Relenza.

However, it will be also be formulated for long-term, bulk storage, so it could be prepared by pharmacists or healthcare professions for rapid administration to large populations in the event of a pandemic or bioterrorism attack.

Ryan's team already has its first candidate compound, CS-8958, in a phase 1 human clinical trial to assess its safety and tolerability.

Biota will commercialise any successful new drug in collaboration with Japanese pharmaceutical giant Sankyo Co Ltd, rather than with its Relenza partner, GSK.

The LANI project, led by Biota's Dr Jane Ryan, has languished because the company's royalty stream from GSK's sales of Relenza has slowed to a trickle.

Biota was anticipating tens of millions of dollars in royalties from Relenza sales, but GSK stopped promoting the drug because the unpredictable nature of influenza epidemics, and Relenza's limited shelf life.

Both GSK and Roche Pharmaceuticals, which makes the rival oral influenza drug Tamiflu, were forced to buy back large stockpiles of their drugs, at a cost of millions of dollars, because they have a shelf life of only three years.

By last year, Roche's oral 'flu drug dominated the global market, with Relenza accounting for only 3 per cent of sales.