impact of swine flu to biota

Here is my summary of possible impacts to biota based on press releases. Please treat as speculation and DYOR.

Relenza:

- GSK increase production to around 60m doses per annum and are in talks to increase further.
- Possible royalties on 66m doses (60m production and 6m stock) is around $120m.
- Global governments are worried about H1N1 resistance and are buying relenza as a precaution.
- Seasonal influenza starting in southern hemisphere, given the H1N1 resistance to tamiflu in the northern hemisphere we could see this continue.
- Seasonal use for antivirals may increase with all the press released regarding swine flu, doctors and patients now know about the antivirals to a much greater extent
- Retail stockpiling could develop into a new market now people see how hard it is to get a drug during an emergency setting, difficult to estimate
- Corporate stockpiling may require physical supply rather than "call options" due to the fact in an emergency supply could be taken by governments
- Global market changing, UK recently increased antivirals to cover around 75% of the population.

Conclusion: Antiviral market has rapidly increased and Relenza's market share may increase.

LANI:

- LANI is close to releasing phase III, it works on the tamiflu resistant strain, H5N1 and currently unknown on Swine Flu.
- Completed phase III trial using 1500 patients, results to be released "mid-year".
- Can submit for approval this year with an accelerated review process
- Unlicensed, this outbreak and increase in antiviral market size along with other opportunities such as retail stockpiling, corporate stockpiling, seasonal uses could attract a large licensing package from major pharma.
- Could take a large share of all market due to it's once only administration.
- License deal could include the whole package i.e. include the backup compounds such as flunet.

Conclusion: License deal could be very large including upfront/milestone payments and royalties. It could also be accelerated due to the swine flu outbreak.

I doubt the price will go anywhere given Biota's stance on not promoting the stock, in fact Peter Cook seems to be talking it down for some unknown reason by warning against speculation in the stock. However if the market sees a continued success by way of relenza and LANI the value should eventually be priced into the script. At current prices it seems to be trading at a discount to the cash and future relenza royalties (using GSK's production as a guide of sales). Alot also comes down to how BTA rewards shareholders.