lani, page-7

Why should Biota spend money and time on the necesarry trials now, to get LANI approved in the West, when the Japanese trials have already proven the safety and the fact that this drug works???

Not only would this be against the Biota strategy of their way of bringing drugs to the market, it would also cost them a lot of money.

Money that will now be spend by the Partner who is going to buy the right to license this drug.

Another fact is that Moreld is right and that we are in the middle of an epidemic with swineflu, and this could, as PC has stated in the media, a reason that LANI becomes possible fast tracked as first defence.

In this case a Partner would not need to go thru these expensive trials but can bring Lani to the market much faster.jojo

Jojo, I agree that Biota should partner and I imagine seeking a partner for LANI. However, here are the facts as I know them from over a decade of Biotech investing and a year of investing in Biota.

1. DS has successfully done studies in Asia on LANI.

2. Europe and North America do not accept results from Asian studies dues to physiological differences.

3. A drug development program will need to be performed for LANI to gain regulatory approval in Europe, North American / RoW.

4. Drug development programs take time and when dealing with something like flu you also have certain windows of opportunity. To my reading Biota have now missed this pandemic window. Forgetting about this pandemic (that's not really a pandemic) flu has two seasons, a northern and southern season. As time goes on those windows close and another six months of royalties are lost.

5. The initial costs for a clinical program are minuscule in comparison to the lost royalties at the other end. Normally you'd have to severely discount the royalties due to low probability of clinical success, but with LANI already proved in one area that discount should be much smaller.

6. Despite DS's success with LANI, that is not a guarantee that it will succeed in RoW trials.

So it becomes a simple discounted cash problem as to whether Biota should be steaming ahead with clinical trials to get the ball rolling. Should management invest some cash, which they have plenty of, in the prospect of getting a good return on that money?

Conversely you can argue that Biota are simply aiming at selling LANI RoW rights and there is no point in starting clinical trials. We'll know the answer to these questions by the end of the year, but even if Biota licence LANI by then I'd still comment that us owners have lost a wonderful opportunity.

As Biota have not announced a clinical program I assume they are pinning all hopes on licencing LANI. If a drug development company licences a product and all costs of development are born by the licencee then the royalties and upfront payments are lower. Hopefully, the reasons for that are clear to everyone here. Thus, I'd argue further that Biota have cash, their job is to invest that wisely for us owners and LANI would appear to be a great invest that they are squandering.

So there is no confusion. I still hold all my Biota shares and expect the price to go higher. As I've commented before, I find looking into the downside more rewarding than upside.