Biota to collaborate with US firm MedImmune

Melbourne-based Biota Holdings (ASX:BTA) has entered into a licensing and collaboration agreement with US company MedImmune (Nasdaq:MEDI) to develop and commercialise Biota's small molecule compounds for the prevention and treatment of respiratory syncytial virus (RSV) infection.

Biota will receive an upfront payment of US$5 million under the terms of the agreement, as well as reimbursement of future research and development expenses on the collaborative RSV program.

Biota could also receive payments of up to US$107.5 million, based on achieving certain clinical and regulatory milestones, and an undisclosed royalty on sales of a future licensed product brought to market by MedImmune.

"This is a big tick to Biota and Biota's science from the expert in the market of RSV," said Biota CEO Peter Cook. "From a shareholder's perspective, the deal is significant financially and we shouldn't lose sight of that, but from a strategic sense we have been pushing and arguing that a market exists and is very real, and here is a very tangible example of it."

Marketing rights for potential products developed as a result of the agreement will be shared, with Biota having exclusive rights in Australia, New Zealand, China and South-East Asia and MedImmune having exclusive rights to the United States, Europe, Japan and all other countries.

Headquartered in Maryland, MedImmune has 2000 employees worldwide and is focused on areas of cancer as well as infectious and inflammatory diseases. MedImmune currently markets Synagis (palivizumab) for the prevention of serious RSV disease in high-infants. Synagis was the first monoclonal antibody approved for an infectious disease.

"Whereas Synagis is an injectable monoclonal antibody approved for RSV prevention in high-risk paediatric patients, the Biota compounds are orally available drug candidates," said MedImmune's senior director of infectious disease research Dr JoAnn Suzich in a statement. "If successfully developed, these products could expand the RSV market to other susceptible patient groups such as older children, the elderly and individuals with compromised immune systems."

Cook said its RSV compounds were expected to enter the clinic within two years, although with MedImmune's support this timeframe may be accelerated. "We are fairly well down the line in terms of animal models. We believe they have got a profile and we're quite satisfied as to the work we've done to date on their efficacy," he said.

RSV is the most common respiratory infection in infancy or childhood, with approximately one-half of all infants being infected with RSV during the first year of life and nearly all children infected at least once by the time they reach their second birthday.

Australian government stockpiling

Meanwhile, federal health minister Tony Abbott has revealed that the government will boost its stocks of Relenza as part of a AUD$79.9 million spend on additional antivirals and antibiotics for the National Medical Stockpile.

"The government is currently negotiating to increase Relenza supplies in the stockpile," Abbott said.

Relenza is the anti-flu drug developed by Biota and commercialised by GlaxoSmithKline. Biota earns a 7 per cent royalty from Relenza sales.

Cook said his knowledge of Australian stockpiling of Relenza was based solely on information that was in the public domain. "Glaxo has no obligation to keep us informed on these things," he said. "They are the managers of the marketing aspect of the business and whilst this is very frustrating to our shareholders -- and I can assure you it's equally as frustrating to us.

"Sooner or later I presume that either the department of health or Glaxo themselves will, for the sake of the Australian public, make the information public."

Biota is suing GSK, alleging that the pharmaceutical company failed to promote and support Relenza in the five years since it was launched. In July, Biota estimated that its loss and damages in relation to the case were between $308 million and $430 million. However this estimate may change based on information about pandemic stockpiling of antiviral drugs, including Relenza.

Cook said that the estimate consists of two parts, past damages and a forward estimate of opportunity lost.

"If Glaxo were to get aggressive and positive about those forward losses, and were to be able to recover and recoup then, then the nature of our claim would change slightly with respect to that component," said Cook.

Asked about the difference between the license with GSK for Relenza and the current deal with MedImmune, Cook said "The basic problem in the Relenza deal related to the issue about whether a market did or did not exist."

"But [with MedImmune] we are dealing with somebody who is in the RSV market, knows it better than anybody else and they're the licensee," he said.