Biota Says New Evidence Details GSK's Comprehensive Failures to Support Anti-Influenza Drug Relenza, Compromising Global Prepare
March 29 2007 - 10:23AM
PR Newswire (US)
WASHINGTON and MELBOURNE, Australia, March 29 /PRNewswire/ -- After
a two year review of more than 200,000 GlaxoSmithKline (GSK)
documents, Biota Holdings Limited (ASX:BTA) today filed an Amended
Statement of Claim with the Victorian Supreme Court that Biota says
provides great detail of its allegation that GSK consistently
mismanaged its legal obligation to develop and market the
anti-viral drug Relenza(R) (zanamivir)(1). Relenza is one of only
two specific anti-influenza drugs recommended by the World Health
Organization for global stockpiling to protect against pandemic
influenza, including Avian flu. Today's amended Statement of Claim
updates a writ Biota filed with the Victorian Supreme Court in May
2004, which sought unspecified damages for lost royalties to date
as well as future losses through the life of the product's patents.
The trial has been set for April 1, 2008. "In 2004 Biota sued GSK
over its failures with Relenza because we were convinced this was
the only way to retrieve the value inherent in the product for our
shareholders," said Peter Cook, CEO, Biota. "In the meantime this
has been compounded by GSK's failure to properly tackle worldwide
concerns over the threat of Avian flu." Relenza was first in a new
class of anti-viral flu drugs, approved for prescription in over 70
countries, and not known to have the resistance and side effect
issues afflicting its chief competitor product Tamiflu(R)
(oseltamivir)(2). Biota's statement says that soon after Relenza's
worldwide launch in 2000, GSK withdrew its support for the product,
adopting and implementing an "Exit Strategy," with the result that
Relenza now holds only a small portion of the estimated US $2
billion annual global market for anti- viral flu drugs, including
the stockpiling market to combat the threat of an Avian flu
pandemic. Biota is entitled to receive a 7% royalty on GSK's sales
of Relenza. As a result of GSK's alleged consistent failures in
marketing and promoting the product, Biota claims that Relenza has
been denied its proper place as a major defence for global
populations against the threat of influenza pandemic. "We now
believe that behind GSK's failure to use its best endeavours to
develop and market Relenza is systematic failure by GSK in key
areas of drug development with disastrous consequences from our
point of view as a junior biotechnology company. This is especially
disappointing given the trust that companies such as us must place
in our senior development partners," said Peter Cook. In addition,
the statement of claim alleges: -- GSK systematically concealed its
decisions to withdraw support for Relenza from its junior partner,
having adopted an exit strategy and implemented it by successively
withdrawing marketing and promotional support for Relenza, while
maintaining the contrary position with Biota; -- a number of senior
GSK executives including GSK's CEO, Mr. J.P. Garnier, were involved
in this concealment; -- owing to GSK's dismantling of its
manufacturing and distribution system for Relenza, and its adoption
of a no surplus inventory policy for Relenza, GSK was unable to
respond to demands for Relenza from Governments to deal with Avian
flu, thereby surrendering the stockpiling market to the competitor
product uncontested; -- GSK's belated responses to demand from
Governments the world over to come to their aid with supplies of
Relenza to manage Avian flu threat were tokenistic and lacking in
genuine intent to properly market Relenza to this substantial
market; -- despite being in possession of trial data to support
regulatory approval for prophylaxis as early as 2001, GSK did not
pursue prophylaxis claims in major markets until very recently.
GSK's actions have placed Relenza at a significant competitive
disadvantage in relation to the pandemic influenza stockpiling
market and have prevented the drug from playing a significant role
in combating Avian flu. -- notwithstanding its status as one of the
world's largest pharmaceutical companies, GSK's consistent pattern
of failures with Relenza cover the full gamut of the drug
development process, and include: - failures of trial design and
execution - inappropriate inhaler device selection - poor
regulatory approval management - failures of global marketing and
promotion - inventory and production too limited to respond to
demand - failure to exploit existing and new markets. Mr. Cook said
that Biota strongly contends GSK knew it was in breach of its
contract with Biota and that had Biota not taken the decision to
litigate against GSK to seek redress, Biota would never have known
that GSK had actually taken a clear decision to abandon the drug.
"Biota remains steadfast in its commitment to pursue GSK to redress
its failure to do the right thing," Mr. Cook said. About the
Litigation Biota filed its first estimate of loss and damages in
July 2005. The estimate range was US$248 to US$353 million. This
initial estimate can be revised prior to the trial. About Relenza
Relenza is an inhaled drug for treating influenza. It was the
world's first in a new class of influenza anti-virals known as
neuraminidase inhibitors (NAI). Relenza was invented in Australia
in 1989 and licensed to the GSK group of companies in 1990. Relenza
is effective in the laboratory and in animals against the H5N1
avian influenza virus, the strain of current concern in pandemic
planning. Although Relenza is effective via inhalation or
intravenous delivery, it is marketed only as an inhaled product.
Inhalation delivers high concentrations of the drug directly to the
lungs at the site of influenza infection. For treatment of
influenza, Relenza is administered via the inhaler, twice daily for
five days, or for prophylaxis once daily. About Biota Biota is a
leading antiviral drug development company based in Melbourne
Australia, with key expertise in respiratory diseases, particularly
influenza. Biota developed the first-in-class neuraminidase
inhibitor, zanamivir, subsequently marketed by GlaxoSmithKline as
Relenza. Biota research breakthroughs have included a series of
candidate drugs aimed at respiratory syncytial virus (RSV) or
bronchiolitis, licensed to MedImmune Inc. and novel nucleoside
analogues designed to treat hepatitis C virus infections, licensed
to Boehringer Ingelheim International GmbH. Biota has clinical
trials underway with its lead compound for human rhinovirus
infection in patients with compromised respiration or immune
systems. In addition, Biota has key partnerships with Sankyo for
the development of second generation influenza antivirals, and with
Inverness Medical (Thermo Electron) to market Biota developed FLU
OIA influenza diagnostics. NOTE: (R)FLU OIA & FLU OIA A/B are
registered trademarks of Thermo Electron Corporation. *Further
information available at http://www.biota.com.au/. (1) Relenza is a
registered trademark of GSK (2) Tamiflu is a registered trademark
of Roche Laboratories DATASOURCE: Biota Holdings Limited CONTACT:
Australia: Tim Duncan or Nerida Mossop, both of Hinton &
Associates, +61-3-9600-1979, or mobile, +61-408-441-122; or USA:
David Sheon of Sciwords, LLC, +1-202-518-6321, or mobile,
+1-202-422-6999, all for Biota Web site: http://www.biota.com.au/
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