Australian Biotech Industry Faces Setback with FDA's Rejection of Relenza

Strategic Insights -

The approval by the US Food and Drug Administration (FDA) for the sale of the anti-influenza drug Relenza was seen as a major boost for Australia's biotech industry, with Biota Holdings Limited, its Melbourne-based developer, expected to reap significant profits. However, the FDA panel's 14-3 rejection of Biota's application for marketing in the US, citing concerns over the drug's effectiveness, has left the industry reeling, wiping nearly $350 million from Biota's market value.

Key Takeaways:

  • The FDA panel's decision was based on a lack of evidence that Relenza was more effective than a placebo drug, despite it being deemed safe.
  • Biota, confident in its application, presented results from three clinical trials, but the much larger American study found no statistical difference between the two groups.
  • The FDA panel questioned the labelling of patients as cured of the flu as soon as they no longer registered flu-like symptoms in their diaries, citing concerns over the subjective nature of the diaries.
  • Glaxo, which is developing the drug with Biota, is also being questioned over the design of the clinical trials, with one FDA panelist stating that the trial was "very ambitious in its studies".
  • Australian science is facing criticism over its tendency to dismiss criticism and its parochial attitude towards its own research.
  • Biota plans to lobby the FDA to either overturn its decision or review the drug again in a year.

Statistics:

  • The FDA panel rejected Biota's application for marketing in the US by a margin of 14-3.
  • Biota's market value was reduced by nearly $350 million as a result of the FDA's decision.
  • The larger American study, with over 770 subjects, found no statistical difference between the Relenza and placebo groups.
  • The European and Australian trials showed significant improvement in volunteers on Relenza, with a shortening of the illness by two-and-a-half days.

Sources:

  • Tania Ewing, "Australian Biotech Industry Faces Setback with FDA's Rejection of Relenza," The Age, Fairfax Media, 1996.
  • FDA Panel Decision, US Food and Drug Administration, 1996.
  • Tania Ewing, "Australia's Biotech Industry Needs a Reality Check," The Age, Fairfax Media, 1996.