Topics: R&D Cut loose by BARDA, Biota slashes R&D and hunts for...

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R&D

Cut loose by BARDA, Biota slashes R&D and hunts for a survival strategy
June 4, 2014 | By John Carroll
The news out of Biota Pharmaceuticals has been a steady drumbeat of defeat, setbacks and layoffs for the past two years. And this week the dirge grew even louder with the announcement that the biotech company is slashing the bulk of its staff several weeks after it lost a key government contract to support its work on a new flu drug.

Investors never much cared for the reverse merger that Biota ($BOTA) pulled off with Nabi back in 2012, which the Australian group used to get into the U.S. market and close to its sponsors at BARDA. Shares went down as Biota used the failed Nabi operation--which went into decline on the failure of a nicotine addiction vaccine--to get a Nasdaq listing.

A year ago, Biota Pharmaceuticals decided to cut back on research and focus on the development of laninamivir octanoate--a long-acting neuraminidase inhibitor--under a contract with BARDA. Its facility in Rockville, MD, was closed, staffers were cut and the HQ was relocated to Atlanta. Then even more cuts followed last fall when its declining fortunes forced the biotech to dump its work on antibiotics. But the real pain came in late April, when Biota announced that BARDA had issued a stop-work order, which the biotech claimed was triggered by the end of the flu season. A few days later, BARDA yanked the $231 million contract for laninamivir.