Glaxo opens Australian Relenza plant

Federal health minister Tony Abbott was on hand to cut the ribbon for the first of two Relenza production lines at GlaxoSmithKline's manufacturing facilities in Boronia, Victoria, last week.

Relenza is the anti-flu drug commercialised by Glaxo and developed by Melbourne-based Biota Holdings (ASX:BTA). Biota earns a 7 per cent royalty from Relenza sales and the company is currently suing GSK for up to $430 million for the pharmaceutical company's alleged failure to promote and support Relenza in the five years since it was launched.

The opening of the production line is part of GSK's global scale-up to meet demand for antiviral drugs in response to a possible flu pandemic.

"We were manufacturing some Relenza a number of years ago in Melbourne but demand didn't meet what the expectations were," said GSK's Australian director government and corporate affairs Alex Grosman. "But in the last six months, there's been a huge increase in demand at a global level for Relenza as a part of the pandemic flu response by various governments, including the Australian government."

Grosman said that GSK is scaling up production globally of Relenza quite rapidly and eventually there will be two automated production lines for the anti-flu drug in Melbourne, rather than the previous single one. "We're hoping to have the first one running probably late March, and the other one would be more towards the end of the second quarter," he said. "We did have some equipment which we've been able to reuse for the first line but the second line we've had to get new equipment manufactured from scratch."

While Biota CEO Peter Cook was present at the opening of the Relenza production line, he said that GSK had kept him in the dark about details about the production line itself.

"We retain no information about anything associated with the facility -- as to what its capacity was, what its throughputs were going to be, whether it was there only for the Australian orders, or for export," Cook told Australian Biotechnology News. "We learnt none of that. Secrecy never lets you know what people are doing."

While Grossman said he couldn't put a figure on the actual production of the Relenza lines because orders go into GSK's global supply centre in Philidelphia, he did say that Australia's contribution would be "significant".

"We'll be exporting a lot of the product," said Grossman. "The initial production will be to meet Australian orders but in time it will also be to global markets."

Cook said, the opening of the production line was "one little glimmer that says clearly GSK have reinvested in Relenza." But the consequences for Biota were unclear, he said.

"The most significant thing out of it, as far as Biota is concerned, is that there is an indication that Glaxo are not walking away from Relenza completely," Cook said. "The extent of their commitment remains unclear."