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GSK launches defence for Biota lawsuit

GSK has launched its defence for the lawsuit brought by Australian biotech company Biota regarding the marketing of its flu drug Relenza

GlaxoSmithKline (GSK) has launched its defence for the lawsuit brought by Australian biotech company Biota regarding the marketing of its flu drug Relenza (zanamivir).

GSK lodged its response to Biota's statement in the Supreme Court of Victoria on Monday and strongly denies the allegations. 

Biota claims that GSK allegedly breached the license it had to produce and market Relenza. The biotech company claims it was deprived of royalties by GSK's alleged failure to put adequate resources behind marketing and distribution of the drug as per the production license. Biota also alleges that GSK failed to position it for use in the pandemic stockpile market.

Court documents tell how extensive market research conducted in the US after the drug was launched in 1999 showed that Relenza, which is administered with an inhaler, was at a distinct disadvantage to rival Tamiflu (oseltamivir), which is taken as a tablet.

In a statement to shareholders, Peter Cook, CEO of Biota, said: "It remains the view of the Board that GSK has disadvantaged our shareholders through its failure to meet its obligations under the Relenza licensing agreement. Biota remains committed to seeing this matter through to completion."

Biota began proceedings in 2004 and has reviewed 250,000 documents from GSK since then. Biota filed a revised statement of claim in March 2007. 

The trial is expected to begin on 1 April 2008 in the Supreme Court of Victoria.

Biota licensed Relenza to GSK in 1990 and has about five per cent of the market share. Relenza sales totalled AUD 16m (USD 14m/EUR 10.1m) in 2007 up to 31 March 2007; sales at the end of FY06 amounted to AUD15.7m (USD 13.7/EUR 9.9m).

30th September 2008

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