SYDNEY, Australia ¿ The collapse of Melbourne, Australia-based Biota Holdings Ltd.¿s share price, after the FDA rejected an application for an influenza drug using its technology, caused sharp falls in the share prices for most other stocks in Australia¿s volatile biotechnology market in the past two weeks.
But with Biota disclosing its half-year results last week and directors declaring that there was a still a chance for the registration of the antiflu drug Relenza (zanamivir) in the U.S., Biota¿s share price was recovering by the end of the week.
Similarly showing recovery were the share prices of other biotechnology stocks affected by the sharp fall in Biota¿s share price, such as Melbourne-based CSL Ltd., antitumor drug company; Progen Industries, in Brisbane; Novogen, a company mainly dealing with vitamin extracts but treated by the market as one of the biotech stocks; and Peptech.
Michael Carmody, a biotechnology analyst in the Sydney office of Burdett Buckeridge Young, said ¿the biotech sector got belted around. But the Biota announcement was a reminder about some of the risks, and [a reminder that] something that might have only a 5 percent chance of happening ¿ such as the FDA rejecting a drug application ¿ can still happen.¿
Approval Could Come This Year
Lisa Springer, an analyst with Bell Securities, said the fallout extended to stocks such as Cochlear, a company making ear implants to improve hearing. Another stock affected was F.H. Faulding, which deals mainly with pharmaceuticals but also has some biotechnology interests. Faulding had good potential for growth and is now bouncing back, she said.
Last week, Biota announced its trading result for the half-year to December 1998, for a loss of A$3.3 million (US$2 million), compared with a loss of A$3.76 million for the previous, corresponding half.
Biota managing director, Hugh Niall, said FDA approval could be obtained this year but partner Glaxo Wellcome plc, of London, had advised Biota that many outcomes were possible, including a request for additional studies or limited approval. Relenza has been approved for sale in Australia and Sweden. n