SYDNEY, Australia ¿ The share price of Melbourne-based Biota Holdings Ltd. crashed last week on the news that the FDA had refused the application of Glaxo Wellcome plc, of London, to register the flu-cure product Relenza, which uses Biota technology.

After skyrocketing in recent weeks on investor anticipation of the long-awaited U.S. registration, Biota¿s share price plunged from a high of A$9.10 (US$5.73) before the news to a low of A$4.04 at the close of business on Friday. The stock price lost more than 50 percent of its value in two days, with most of the collapse occurring on Thursday, when the rejection was announced.

Biota¿s CEO, Hugh Niall, released a statement directly after the rejection of Relenza by the FDA¿s antiviral drugs advisory committee, saying that the company was ¿disappointed¿ with the committee¿s decision.

¿Relenza is the first neuraminidase inhibitor considered by the FDA for approval,¿ he said. ¿We believe that a series of international clinical trials have successfully demonstrated its ability to treat influenza. However, we are confident that Glaxo Wellcome will work with the FDA to resolve outstanding clinical issues and bring this important drug to market.¿

Niall said that the committee members had considered Relenza to have a favorable safety profile, and to be a promising antiviral, but they expressed reservations about its efficacy in one of the three pivotal studies.

Many of the committee members recognized the difficulty of designing studies for a self-limiting disease such as influenza.

He also commented that the committee found it problematic that the results for the U.S. study were much less positive than results for trials conducted in Europe and Australia.

Several factors worked to reduce the positive results in the U.S. trials, including the failure of as many as 10 percent of the 700 patients to complete their agreed reporting procedures, with those non-completions being counted as failures. If those non-completions had been counted as having the same success rate as those who did complete the protocol, then the trial results would have been significantly more positive, Niall said.

Biota¿s chief financial officer, Richard Wardley, told BioWorld International that Glaxo had already expressed its intention of going straight back to the committee to ¿clear up¿ the reasons for this initial rejection. He said the drug would be resubmitted for approval and Biota has every reason to expect that it would be approved by regulatory authorities in Europe before the Northern Hemisphere¿s next flu season.

The drug has already been approved for marketing in Australia and Sweden, and a separate application had been made to the authorities in Canada, he said. n