SYDNEY, Australia - With royalties about to flow from its flu drug, Melbourne-based Biota Holdings Ltd. has started developing a compound it said has promise for treating the common cold.

Biota has not released any details about how the molecule works against the various forms of rhinovirus that cause about half the cases of common cold. The only details available were that the molecule concerned was developed by Biota scientists in the company's laboratories attached to Monash University in Melbourne, and that it has the code name BTA 188. Chairman Brian Healey told shareholders at the company's annual general meeting last week that Biota intends to take the molecule to human trials within 18 months.

"Whilst there are no guarantees in this business, we are confident enough at this stage to have consultants sounding out potential partners and accessing levels of interest," he said.

As Glaxo Wellcome plc is in the process of gaining worldwide registration for the antiflu drug Relenza, which uses Biota's technology, the news helped boost the company's share price. Glaxo clearance for sale of Relenza with Japanese authorities plus the revelation that the company would pursue a cold cure pushed the share price from A$5.80 (US$3.71) in the middle of last week to A$6.05 by the end of the week.

Biota managing director Hugh Niall said the discovery of BTA 188 was one result of the company's decision to concentrate on infections of the respiratory system. He said the compound worked very well against common types of rhinoviruses in the laboratory but the company would also synthesize a range of backup molecules in case there were problems with the first.

He said the next step for testing the compound would be safety trials in animals, though it would not possible to test BTA 188's efficacy in animals as the various cold viruses did not affect animals. The flu viruses affected mice and ferrets, but no species of animals was known to be affected by colds, he said. n