German Relenza deal shows we're right: Biota

Melbourne-based biopharma Biota Holdings (ASX:BTA) has confirmed that the German government has ordered 1.7 million packs of its flu vaccine Relenza, but CEO Peter Molloy said he still believed that licensee GlaxoSmithKline was not doing enough to promote the drug.

Biota is currently suing GSK for up to AUD$430 million for what it says is the big pharma's failure to promote and support Relenza in the five years since it was launched.

Molloy said the company's position had been cemented by the order from Germany, "It is positive for Biota and the claims we are making. As the market continues to grow there will be increased stockpiling and this may lead us to increase the size of the claim made against GSK," he said.

"This should be a significant wakeup call for them to actively start promoting Relenza. GSK is not doing enough."

Molloy was critical of the level of spending for promoting the drug to doctors "Over the last 12 months there was a paltry level of support of only US$200,000 worldwide and almost all of it was in Germany. I'm not sure if this correlates the achievement of the order."

The German order was important to Biota, which receives a 7 per cent royalty from sales of Relenza, Molloy said. "This is very material and likely to impact on our revenues. Last year we made $7 million, at a time when the competitor [Roche's Tamiflu] is likely to reach $1 billion. If we can get a modest share the impact could be enormous," he said.

Molloy said he estimated that sales of flu antivirals for stockpiling over the next two years could amount to US$3 billion.

Germany has also placed an order for 6 million courses of Tamiflu, and Molloy believes that other countries may follow. "We hope that [Germany] is the first of many countries to start stockpiling two instead of one. A recent article in The Lancet agreed that it makes sense to stockpile both when you are faced with devastating consequences of a flu pandemic."

The Lancet article was positive about Relenza. "Although both [Relenza and Tamiflu] have similar efficacy, zanamivir (Relenza) has fewer adverse reactions and a favourable resistance profile," it said.

The case between Biota and GSK is scheduled for mediation in November.