the upcoming game-changing announcement

As was announced in the last annual report:

"Biota is committed to extracting this potential value for shareholders and, as previously announced during the year, the Board has appointed Piper Jaffray & Co. to advise it on a number of matters in relation to such a change.
While this work has advanced considerably it remains work in progress and an update will be provided at the Annual General Meeting of shareholders, recognising the general sensitivity of some of the items under consideration. Any definitive proposals of course, will be advised to all shareholders in a timely manner.

and was announced in the Feb half yearly:

"The Board has made solid progress on how best to secure long term value recognition from laninamivir and Biota’s other products, in conjunction with our advisor Piper Jaffray. Directors expect to be in a position to take a proposal to shareholders by mid 2012."

There was also a newspaper report (in December) referencing Wilson HTM that Biota was being linked to 3 US companies in conjunction with some sort of merger talks - the companies being Vertex, Idenix and Cubist.

http://www.theaustralian.com.au/business/mergers-acquisitions/biota-considering-merger-after-review/story-fn91vdzj-1226210646725

Biota have indicated that we may see a US announcement tied to unlocking value around LANI, but we now also have two other possible value drivers:

- BTA798/Vapendavir (HRV=common cold cure) ready for Phase III trials next

- A wildcard - an HCV (Hepatitis C) patent that was claimed by Biocryst, suddenly being granted to Biota.

This Biota HCV candidate is preclinical, but we have only just seen in the last 6 months, two major deals in relation to HCV drugs:

i/ Gilead (Tamiflu owner) take out Pharmasset for a whopping $11bn because it had HCV candidates in Phase II trials.

and then last month

ii/ Bristol Myers Squibb taking out Inhibitex for $2.5bn for its Phase I HCV candidate - yes, Phase I !!! Unbelievable!!!

and we also have

iii/ Vertex releasing its HCV blockbuster INCIVEK and immediately banking on big revenue.

and

iv/ Gilead/Pharmasset's candidate (see i above) has just suffered a setback midstage due to a viral relapse

and

iv/ Biocryst's preclinical HCV molecule (though a long way off) showing promise (unless this is just their PR machine making a big splash due to the surprise of the Inhibitex deal). However, Biota has just been awarded the patent for this molecule!

Back to earlier merger/takeover talks:

Vertex are suddenly shifting from a single digit billion market cap business towards double digit billions and has seen a bigger competitor, Gilead, somewhat on the ropes with their recent buyout and bad trial news. They are in the HCV and CF space and they have announced that they will be pursuing opportunities in relation to these two diseases, but they also have an interest in Influenza.

Idenix is involved predominantly in the Hepatitis space.

Cubist is involved mainly in the Antibacterial space.

All of these companies would find Biota an extremely attractive takeover/merger opportunity, with its maturing pipeline, some of which would bolster existing drugs in the same space and others which would add instant opportunities for them, not to mention a scientific team that is the envy of most companies.

So we have Biota sitting pretty with:

i/ a next gen Influenza drug completely derisked (LANI Phase III fully funded by the US govt)

ii/ BTA798/Vapendivir - Common Cold Cure for immuno-compromised patients - a multi-billion dollar industry

iii/ Their HCV candidate snatching the prize patent due to earlier discovery, from the promising Biocryst (pre-clinical) candidate in a no holds barred winner take all space.

The opportunities are tantalising. I wonder how much traveling JF has been doing lately? You'd have to think there are plenty of interesting things going on behind the scenes.

Biota is ripe for the picking.

We'll no doubt find out how ripe very very soon...