GSK 'missed boat', claims Biota

Australian biotech minnow Biota has claimed losses of up to A$430m (£185.3m) in its ongoing lawsuit against GlaxoSmithKline (GSK) over the licensing agreement for anti-influenza drug, Relenza.

The two companies signed a licensing deal in 1990 that gave Biota a 7 per cent royalty on sales of the drug it had spent 20 years developing, and the treatment was launched nine years later. Biota accuses GSK of failing to adequately support the drug worldwide, after downgrading it to a `niche product' two years after launch and cutting the marketing spend.

Although Relenza gained 50 per cent of the market soon after its launch, sales dropped significantly after GSK's reassessment of the drug. It now holds about one per cent of the anti-flu drug market, which is dominated by Roche's Tamiflu.

Biota said Relenza's market share could have risen to 40 per cent if GSK had pursued regulatory approval for its use as a prevention of flu, as well as a treatment.

It also said the damages claim could rise as global demand for antiviral treatments increases.

ìWith each day that goes by, their liability under the agreement, from our perspective, increases,î said Biota chief executive, Peter Molloy. ìIf the product had been properly supported for the last four or five years, Biota would have been a profitable and successful company.î

Since the suit was filed in the Supreme Court of Victoria in May 2004, the prescription market for Relenza's class of flu antivirals grew by more than 70 per cent to around US$500m, on top of similar growth the previous year.

Biota said its damages assessment referred to a conservative market growth scenario which assesses damages at A$308m (£132.7m) and a moderate growth scenario that assesses damages at A$430m.

A spokeswoman for GSK said the company would ìcontinue to vigorously defend the claimî.

With the mediation phase of the litigation scheduled to take place by November 25, Molloy said that although he would prefer an out of court settlement, Biota was not prepared to ìcompromise its position too muchî.

Shares in Biota rose 15 per cent after the company revealed the extent of its damages claim.

The Biota-GSK litigation coincides with a similar battle between US-based Gilead and Roche over Tamiflu. Gilead alleges Roche has not done enough to promote the drug and wants to regain full rights.