Biota wins access to GSK documents

An affidavit filed on behalf of Biota (ASX: BTA) in the Victorian Supreme Court this week has shown that the amount of money spent by GlaxoSmithKline in promoting Biota's drug Relenza in major markets dropped by 80 per cent in the second flu season after the drug was approved.

The affidavit reveals that while GSK spent more than US$27 million promoting Relenza during the 1999-2000 flu season in Canada, Belgium, France, Germany, Italy, Spain, Switzerland, UK and USA, with corresponding sales of US$36.4 million. But the in 2000-2001 flu season, the company spent only US$5.46 million and achieved sales of US$5.72 million. By the 2002-2003 flu season, the promotional spending was down to US$135,000 for sales worth US$1.5 million.

The data was compiled by Biota's legal team from information provided by IMS Health, a supplier of pharmaceutical market data.

The affidavit also reveals that Biota's lawsuit against GSK for failing to support and promote Relenza is not the first lawsuit of its type the company has faced. Japanese company Otsuka Pharmaceutical initiated arbitration proceedings against the pharmaceutical giant in 2001 after it withdrew antibiotic grepafloxacin from the market for safety reasons in October 1999, claiming material breaches of the license and supply agreements. The dispute was settled out of court in June this year, but no financial details have been disclosed.

Trial judge Justice Simon Whelan has also awarded Biota (ASX: BTA) access to key GSK documents relating to the level of marketing and promotional support of Relenza.

Among the documents GSK has been ordered to provide are:

• study reports and related documents for Phase II, III and IV clinical trials,
• all minutes from the Relenza International Product Development Team meetings,
• documents relating to regulatory approval of the drug,
• sales reports,
• the outsourcing agreement for promotion of the drug,
• forecasts for supply of the drug to meet demand,
• technical specifications for the Diskhaler,
• board minutes and papers expressly concerning Relenza,
• and minutes and papers from the corporate executive team of GSK and its predecessors concerning Relenza.

GSK has until October 15 to produce the documents, and some must be given to Biota in the next few weeks.

Justice Whelan also indicated that he expected the discovery phase of the trial to be completed by February or March next year.

"Biota is pleased that the litigation is proceeding at a good pace and that we have obtained access to GSK's internal materials at this early stage," said CEO Peter Molloy in a statement.

"We continue to believe that our case is very strong and now look forward to deepening our understanding of what happened to Relenza in the light of GSK's own documents."