after gsk with all guns blazing

For Immediate Release
Melbourne, Australia — 29 March 2007
Biota Details GSK’s Failures to Support Relenza
After a two year review of more than 200,000 GlaxoSmithKline (GSK) documents,
Biota Holdings Limited (ASX:BTA) today filed an Amended Statement of Claim with the
Victorian Supreme Court which Biota says provides great detail of its allegation that
GSK consistently mismanaged its legal obligation to develop and market the antiviral
drug RelenzaTM (zanamivir). Relenza is one of only two specific anti-influenza drugs
recommended by the World Health Organization for global stockpiling to protect
against pandemic influenza, including Avian flu.
Today’s amended Statement of Claim updates a writ Biota filed with the Victorian
Supreme Court in May 2004, which sought unspecified damages for lost royalties to
date as well as future losses through the life of the product’s patents. The trial has
been set for 1 April 2008.
“In 2004 Biota sued GSK over its failures with Relenza because we were convinced
this was the only way to retrieve the value inherent in the product for our
shareholders,” said Peter Cook, CEO, Biota. “In the meantime this has been
compounded by GSK’s failure to properly tackle worldwide concerns over the threat
of Avian flu.”
Relenza was first in a new class of antiviral flu drugs, approved for prescription in
over 70 countries. It is not known to have the resistance and side effect issues
afflicting its chief competitor product Tamiflu® (oseltamivir)i. Biota’s statement says
that soon after Relenza’s worldwide launch in 2000, GSK withdrew its support for the
product, adopting and implementing an “Exit Strategy”, with the result that Relenza
now holds only a small portion of the estimated US $2 billion annual global market
for antiviral flu drugs, including the stockpiling market to combat the threat of an
Avian flu pandemic. Biota is entitled to receive a blended royalty on GSK’s sales of
Relenza, of approximately 7%.
As a result of GSK’s alleged consistent failures in marketing and promoting the
product, Biota claims that Relenza has been denied its proper place as a major
defence for global populations against the threat of influenza pandemic.
“We now believe that behind GSK’s failure to use its best endeavours to develop and
market Relenza is systematic failure by GSK in key areas of drug development with
disastrous consequences from our point of view as a junior biotechnology company.
This is especially disappointing given the trust that companies such as us must place
in our senior development partners,” said Peter Cook.
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In addition, the statement of claim alleges:
• GSK systematically concealed its decisions to withdraw support for Relenza from
its junior partner, having adopted an exit strategy and implemented it by
successively withdrawing marketing and promotional support for Relenza, while
maintaining the contrary position with Biota;
• a number of senior GSK executives including GSK’s CEO, Mr J.P. Garnier, were
involved in this concealment;
• owing to GSK’s dismantling of its manufacturing and distribution system for
Relenza and its adoption of a no surplus inventory policy for Relenza, GSK was
unable to respond to demands for Relenza from Governments to deal with Avian
flu, thereby surrendering the stockpiling market to the competitor product
uncontested;
• GSK’s belated responses to demands from Governments the world over to come
to their aid with supplies of Relenza to manage the threat of Avian flu were
tokenistic and lacking in genuine intent to properly market Relenza to this
substantial market;
• despite being in possession of trial data to support regulatory approval for
prophylaxis as early as 2001, GSK did not pursue prophylaxis (preventative)
claims in major markets until very recently. GSK’s actions have placed Relenza
at a significant competitive disadvantage in relation to the pandemic influenza
stockpiling market and have prevented the drug from playing a significant role in
combating Avian flu.
• notwithstanding its status as one of the world’s largest pharmaceutical
companies, GSK’s consistent pattern of failures with Relenza cover the full gamut
of the drug development process, and include:
− failures of trial design and execution
− inappropriate inhaler device selection
− poor regulatory approval management
− failures of global marketing and promotion
− inventory and production too limited to respond to demand
− failure to exploit existing and new markets
Mr Cook said that Biota strongly contends GSK knew it was in breach of its contract
with Biota and that had Biota not taken the decision to litigate against GSK to seek
redress, Biota would never have known that GSK had actually taken a clear decision
to abandon the drug.
“Biota remains steadfast in its commitment to pursue GSK to redress its failure to do
the right thing,” Mr Cook said.
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About Relenza
Relenza™ is an inhaled drug for treating influenza. It was the world’s first in a new
class of influenza antivirals known as neuraminidase inhibitors (NAI).
Relenza was invented in Australia in 1989 and licensed to the GSK group of
companies in 1990. Relenza is effective in the laboratory and in animals against the
H5N1 avian influenza virus, the strain of current concern in pandemic planning.
Although Relenza is effective via inhalation or intravenous delivery, it is marketed
only as an inhaled product. Inhalation delivers high concentrations of the drug
directly to the lungs at the site of influenza infection. For treatment of influenza,
Relenza is administered via the inhaler, twice daily for five days, or for prophylaxis
once daily.
About Biota
Biota is a leading antiviral drug development company based in Melbourne Australia,
with key expertise in respiratory diseases, particularly influenza. Biota developed the
first-in-class neuraminidase inhibitor, zanamivir, subsequently marketed by
GlaxoSmithKline as Relenza.
Biota research breakthroughs have included a series of candidate drugs aimed at
respiratory syncytial virus (RSV) or bronchiolitis, licensed to MedImmune Inc. and
novel nucleoside analogues designed to treat hepatitis C virus (HCV) infections,
licensed to Boehringer Ingelheim. Biota has clinical trials underway with its lead
compound for human rhinovirus (HRV) infection in patients with compromised
respiration or immune systems. In addition, Biota has key partnerships with
Daiichi-Sankyo for the development of second generation influenza antivirals and
with Inverness Medical (Thermo Electron) to market Biota developed FLU OIA
influenza diagnostics.
Relenza™ is a registered trademark of the GlaxoSmithKline group of companies.
FLU OIA® & FLU OIA A/B® are registered trademarks of Inverness Medical (Thermo Electron Corporation).
i Tamiflu® is a registered trademark of Roche Laboratories.
*Further information available at www.biota.com.au.
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