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Pharmaceutical industry

Biota Holdings' Market Value Plummets After US FDA Panel Vote

Strategic Insights

— 1 min read

Biota Holdings' market value more than halved last week after a US FDA panel voted against recommending the approval of its flu cure, Relenza, in the lucrative US market. The company's managing director, Dr Hugh Niall, admitted that a speedy resolution to the impasse was unlikely, but expressed hope that the situation would become clearer over the coming month. Glaxo Wellcome, Biota's partner, is meeting with the FDA to determine whether a retrial is necessary. Meanwhile, Relenza has been approved for sale in Sweden, and approval in Australia is expected by winter.

Key Takeaways:

  • Biota Holdings' market value plummeted by more than $350 million after a US FDA panel voted against recommending the approval of Relenza.
  • The panel questioned the design of clinical trials conducted by Glaxo Wellcome in consultation with the FDA.
  • Dr. Hugh Niall, Biota's managing director, expressed hope that the situation would become clearer over the coming month.
  • Glaxo Wellcome is meeting with the FDA to determine whether a retrial is necessary.
  • Relenza has been approved for sale in Sweden, and approval in Australia is expected by winter.
  • Analysts gave a mixed response to the predicament of Biota, with one analyst valuing the shares at $5.70 despite potential delays in US approvals.
  • A rival product, developed by Gilead in collaboration with Roche, could win FDA approval by early 2000.

Statistics:

  • Market value loss for Biota Holdings: over $350 million
  • Net loss for the six months to 31 December: $3.33 million
  • Net loss for the previous first half: $3.76 million
  • Revenues for the six months to 31 December: $1.3 million
  • Adverse revenue in the previous corresponding period: $681,000
  • Payment from AusIndustry research and development grant: $275,000
  • Expected sales of flu diagnostic FLU OIA in Australia before the onset of the flu season: yet to be disclosed
  • Approval timeline for Relenza in Australia: expected to come by winter

Sources:

  • The Age
  • Reuters

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