SYDNEY - The share price of Australian flu-cure company Biota Holdings Ltd. jumped nearly 5 percent on news of a breakthrough in a diabetes research project funded by the company.

Disclosure that a team of scientists from Australia's Commonwealth Scientific and Industrial Research Organisation (CSIRO) worked out the structure of part of a key diabetes-related cell receptor holds no immediate commercial significance for Biota.

But upon hearing the news Friday, investors pushed up the company's share price by A$0.27 cents, to A$5.10. By close of business Monday Biota's share price had fallen back to A$5.02.

Biota's main asset is its rights to the flu-cure Relenza, which Glaxo Wellcome plc, of London, has in extensive Phase III testing and is expected to submit to the FDA for registration in the U.S.

Biota also has a number of other programs, including a project to develop an insulin tablet, under way at the section of CSIRO called the Division of Molecular Science, in Melbourne.

Biota has spent A$900,000 on the project, with additional funding provided by another government program. The company plans to increase spending on the project, but has not said how much additional money will be allocated.

The diabetes research was reported in the British journal Nature, July 23, 1998, and involves the insulin-like growth factor (IGF) receptor on human cells. A team led by Colin Ward, of CSIRO's Division of Molecular Science, and Tom Garrett, of the Biomolecular Research Institute, also in Melbourne, managed to fully map half of the structure of the IGF receptor on the outside of cells. The part inside the cell already has been mapped.

The team grew a crystal of the receptor fragment and established the structure through X-ray cystallography.

Ward told BioWorld International that knowing half the structure improves the team's knowledge of the epidermal growth factor receptor, which is similar to the IGF receptor.

Biota's CEO, Hugh Niall, said the IGF discovery counts as a breakthrough - not just another step along the research pathway - but much more work has to be done. *