interview with peter cook

* New flu drug could get to key markets in 1-4 years

* Cashed up Biota chasing product acquisitions

* No bad blood with GlaxoSmithKline

By Sonali Paul

MELBOURNE, Aug 11 (Reuters) - Two or three major drug
companies have expressed strong interest in developing a new flu
drug from Biota Holdings Ltd , the Australian biotech
company's chief executive said on Tuesday.

Biota this week announced successful results from late-stage
trials in Asia for its flu treatment laninamivir, which showed it
was as safe and effective as the drug Tamiflu, which governments
have been stockpiling to fight swine flu and bird flu.

"There's potentially half a dozen people who are interested,
but there are two or three seriously interested companies," Biota
Managing Director Peter Cook told Reuters in an interview.

Biota has already licensed laninamivir to Daiichi Sankyo
<4568.T>, Japan's no.3 drugmaker, for sale in Japan.

Cook said he expected to license the product to a western
drug company within the next six to 12 months to bring it to
market in North America and Europe.

Companies Biota has already talked to include GlaxoSmithKline
, the licensee for Biota's first flu drug, Relenza, as
well as Roche Holdings AG , maker of Tamiflu.

It would be up to the licensee to decide what late-stage
studies to pursue, such as whether to test laninamivir first as a
flu preventive or as a flu treatment.

At best, laninamivir could be on the key U.S. and European
markets within 12 months, if swine flu turned more virulent in
the upcoming flu season and health authorities allowed it to be
sold at the same time as trials were being run, Cook said.

Otherwise, it could take up to four years.



NO BAD BLOOD

Thanks to the bird flu and swine flu scares, Biota's
royalties more than doubled to A$45 million ($37.5 million) in
the year to June, a sharp change after years of poor sales that
led Biota to sue GlaxoSmithKline for damages.

Glaxo settled a year ago at a fraction of the A$704 million
claim and patched up ties with the Australian firm, which now
hails Glaxo's flu strategy.

"Not only is there no bad blood, Biota is quite an admirer of
the integrated and holistic approach that GSK is taking to
influenza," said Cook.

"Having said that, I wouldn't want you then to assume they're
the frontrunner in terms of licensing this product (laninamivir).
That's not so."

Royalties are expected to surge further this year, as GSK is
set to triple its Relenza manufacturing capacity. As a result,
two analysts estimate Biota could have A$170 million in cash on
hand at the end of June 2010, which Cook said was speculative.

"They've got so much money coming to them, I don't think they
know what to do with it," said Wilson HTM's Storey.

Biota plans to spend its cash horde on buying new products,
such as other products for treating respiratory ailments, like
asthma, or buying companies with projects in those areas as it
looks to build up its stream of royalties.

"We've said we'd like to double the number of projects we've
got under management over the next three to five years.
Increasing retained earnings will allow us to accelerate that,"
said Cook.

He said there were a number of distressed biotech companies
outside Australia whose assets had been presented to Biota as
opportunities, but it has not yet found anything to its liking.

Biota shares fell 4.2 percent on Tuesday to A$2.08 as
investors took profits from a surge to a near four-year high on
Monday after the laninamivir trial results were released.

ABN AMRO Morgans cut its recommendation on the stock to hold
from buy after Biota shares overshot its price target of A$2.24
on Monday.

(Reporting by Sonali Paul; Editing by James Thornhill)