Fed decision backs GSK lawsuit, says Biota

A federal government decision earlier this month to stockpile Roche's Tamiflu, rather than the anti-flu drug Relenza, designed by Melbourne-based Biota (ASX:BTA), is being used by the Australian firm to support its legal claims that GlaxoSmithKline failed to support and promote Relenza.

"The extent to which this [stockpiling of Tamiflu] has occurred due to the apathy of our partner only adds to the damages claim," Biota CEO Peter Molloy told Australian Biotechnology News.

Molloy said the government's decision to go with Tamiflu in the event of a pandemic would add to Biota's damages claim against GSK. The company is seeking unspecified damages in recompense for lost royalties, claiming that GSK did not live up to its agreement to support and promote the drug. Since its debut in the US in 1999, where it initially captured close to half of the market, the drug's market share has slid to 3 per cent worldwide. "My take is that something has gone wrong here," Molloy said. "It's unusual for stockpiling of this magnitude to occur (a) without a tender, and (b) with only one drug when two are available."

A spokesperson for the federal health department confirmed that funding allocated in this year's budget would be used to stockpile Tamiflu. The government announced earlier this month that it would provide $114 million to stockpile anti-flu drugs in case of a pandemic.

Comments from federal health minister Tony Abbott, quoted by The Australian newspaper last week, cited clinical effectiveness and cost as the reasons for choosing one drug over another, but this was later refuted by the spokesperson.

"On balance, they are both good drugs but for mass treatment during a pandemic, Tamiflu was thought to be the safest and best method of treating a lot of people," she told ABN. "It's no indictment on Relenza."

Molloy said no differences in clinical effectiveness had been demonstrated between the two drugs. According to the WHO Guidelines on the Use of Vaccines and Antivirals during Influenza Pandemics, published earlier this year, Relenza was associated with very infrequent incidence of severe bronchospasm, although one study had shown that no excess of serious respiratory adverse events were found in patients with mild to moderate asthma. In contrast, 10-15 per cent of adults treated with Tamiflu reported nausea and vomiting, with 1-2 per cent of patients ceasing treatment. Tamiflu has also been associated with the emergence of resistant variants of the influenza virus.

"If you are getting resistance emerging, you need two drugs in your armoury rather than one," Molloy said. Cost was also not an issue, according to Molloy, with worldwide averages showing that Relenza was 25-30 per cent cheaper than Tamiflu. "In almost every market, Relenza is cheaper," he said.

Japanese collaboration

Meanwhile, Biota is continuing to develop its second-generation anti-flu drug in collaboration with Japanese pharmaceutical company Sankyo. "It's going brilliantly," Molloy said. "We're now looking at a substantial market of $300 million plus, with a drug that has important advantages. We think it will have the opportunity to dominate the market quickly."

The drug has completed Phase I clinical trials in the UK, and according to Molloy, the company is "in the throes of partnering discussions" with interested parties. The company is planning to partner the drug prior to entering Phase II clinical trials. "The next short period of time, preferably before the next northern hemisphere winter, is when I would like to see partnerships squared away," he said. "I'm not making any predictions, but it's looking very positive."