SYDNEY, Australia - The share price of flu-cure company Biota Holdings Ltd. surged last week as the FDA finally gave regulatory approval to partner Glaxo Wellcome plc's drug, Relenza.

Biota, of Melbourne, initially will get A$8 million (US$5.2 million) as a result of the approval - A$4 million paid by Glaxo within 14 days of approval and another A$4 million in advance royalties within six months of the drug going on sale. The company will receive a royalty of 7 percent on all Relenza sales.

Investors pushed Biota's share price up from about A$6.86 to about A$8 before the stock fell back to close at A$7.16 on Friday. However, the stock was at A$9 in February when an FDA committee surprised the market by announcing it would recommend against approving the drug for the U.S. market, pointing to an apparent lack of efficacy in two U.S. studies. The announcement proved to be the start of a roller-coaster ride for Biota investors, with the stock immediately falling to A$4.

Both Biota and Glaxo have since been pushing hard to get the FDA committee to change its mind, and have gained approval for Relenza in Australia and most of Europe.

Despite the FDA finally giving its approval to the drug last week and all the publicity given to Relenza, some analysts warned Relenza was not likely to be the dominant flu-cure drug in the U.S. market.

Michael Carmody, a biotech analyst in the Sydney office of Burdett Buckeridge & Young, said a similar product - like Relenza, a neuromindase inhibitor - being developed by the Swiss company F. Hoffmann-La Roche, likely will take about 60 percent of the flu-cure market in the U.S.

He said that judging from the publicly available information, Relenza is more effective but the Roche product is easier to use.

After calculating the likely cash flow, Carmody recently issued a recommendation to clients that they should buy the stock up to A$8.22.