BioWorld International Correspondent

SYDNEY, Australia - Biota Holdings Ltd. is suing GlaxoSmithKline plc, alleging the pharmaceutical giant abandoned marketing of the flue cure Relenza, which originated with Biota, after its launch.

Melbourne, Australia-based Biota said in a statement lodged with the Victorian State Supreme Court in Melbourne that GSK failed to pursue alternative or improved inhalation systems for Relenza, withdrew support for post-approval clinical studies designed to expand the product's use and withdrew promotion support after the product's launch.

As a result, Biota alleged, after initially capturing close to 50 percent of the emerging global market for the new broad-spectrum flu drugs called neuraminidase inhibitors (NAI), Relenza's share of the market, estimated to be worth A$500 million (US$330 million) a year, plummeted to 3 percent.

Rival product Tamiflu, marketed by Roche, which is a pill instead of an inhaled spray, became the market leader.

Biota CEO Peter Molloy said, "Relenza was a breakthrough influenza drug that had great potential, but it was effectively abandoned at birth." He added that the product did not fail because of any disadvantages or deficiencies, but because support was withdrawn immediately after launch.

GSK has not made any official statement in Australia and calls to GSK Australia, which was named as one of the respondents, were not returned.

The claim does not specify damages, but Biota has a royalty agreement to take 7 percent of the sales, and the writ seeks both royalties lost to date, as well as future profits. The company estimated that if Relenza had been in the market position Tamiflu now is, it would have earned $35 million in royalties last financial year, rather than less than the $1 million that the company actually received.

Biota also stated that its decision to sue GSK came after more than two years of discussions, which recently ended unsatisfactorily.

Biota Chairman John Grant said, "Litigation was the only reasonable option left to us to retrieve the substantial value we believe exists in Relenza."

He said the board also believed it had a strong case, based on clinical trials, peer reviews and GSK's own statements testifying to the drug's effectiveness and safety. The drug is approved for use by regulatory authorities in 70 countries.