sydney meeting, page-41

Reiner,

I am sympathetic with your viewpoint - a potentially GREAT Australian company which has languished like an "orphan" due to lack of interest, understanding or short-term outlook from Australian investors (other than Hunter Hall and "mums & dads"), superannuation funds (other than Self managed)and now has the potential to become a great US/Aus company on the NASDAQ where hopefully the value will be better recognised.

The scientific team will remain Australian (with some US and UK inputs on the antibacterials) and we will retain a Board majority (at least for the time being).

We are now living in a global world - no reason why we can't all be registered with our brokers to trade internationally - might open up some new horizons/opportunities.

Individuals need to push their Super Funds if they can't accept overseas share-holdings - what century are they in???

Dividend imputation could be an issue - but I don't think there are any tax credits in Biota's warchest. The vast majority of BTAs income is from overseas so the high Australian dollar has hurt our cash flow. CSL is in a similar situation (but dual listed) and has still managed to post a profit over $1bn for the first time.

My prefernce would have been a dual listing - I beleive it is unfortunately too late for the current deal as the legal arrangements and voting is based on a single NASDAQ listing.

NABI brings a lot of shareholders to the merger - but I was surprised to hear from PC yesterday that virtually all were funds rather than retail investors - maybe this is how it works in the US?

On the upside this means that we will have a ready-made influential shareholder base who will run the ruler over BOTA (do you like the name antibotter?) and get excited at the prospects - Lani and the various pipeline elements.

Regarding financial risk in the US - I see the possibility that the US Govt could extend the expiry date of the Stockpile (when is it currently due to start expiring?) in order to delay expenditure (a bit like Olympic Dam).

Secondly, if Biota can ramp up production to maximum on 4 weeks notice ("just in time" philosophy!) this will be both a strength and a weakness. It could lead to reduced stockpiling (US would view it as less risk of stockpile going out-of-date) but it is also an extremely cost efficient model of production (being directly market/end user driven)in these difficult financial times. I suspect this is an area where GSK has struggled with Relenza - stockpiling in house then no orders coming in - all too hard.

BTA should manage the downside risk by targeting the needs of the secondary market - seasonal influenza. It could also be that the US Govt decides to move more to a lower cost consumer driven rather than a Pandemic/Emergency driven approach - in other words "Protect Yourself" we will just look after the critical areas of the economy - armed forces etc. Maybe this is a bteer model - watch this space!!.

Lesson for BTA - Don't put all your egss in 1 basket.

The biggest upside is that BTA will no longer be on a 4% or 7% royalty but will be able to cover costs of production and amortise development costs over the life of the patent.

Currently BTA is not covering costs - which is the major reason for the languishing share price. - 4% is grossly inadequate recompense for the investement in financial and scientific terms.

Hence the control of manufacturing and marketing is the only way to go if Biota is to survive and prosper. At the same time licencing of 1 or more of the pipeline products would derisk Biota financially.

One thing that PC and management has done well(and deserve credit for) is reduce the cash burn to about $18m per year. With about $52m in the kitty - gives 3 years cover - with the BARDA US development fully funded (including 7% management fee).

This is also why the other projects have been put on the backburner for the moment.

Vote YES - Go Biota - a great US/Ausssie company.

Regards
Kangaroo1