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Biota shares plunge on Relenza slump

Shares in drugs developer Biota Holdings Ltd plunged more than 20 per cent to a nine month low, after the company reported a slump in royalties from its anti-flu drug Relenza.

The stock on Thursday dropped 44 cents, or 23 per cent, to close at $1.475, the lowest since July 15, 2009.

Biota has licensed Relenza to global pharmaceutical firm GlaxoSmithKline (GSK), which notified the Australian company that sales of the drug in the March quarter were less than a third compared with a year earlier.

GSK had notified Biota that Relenza sales were $138 million and indicative royalties were $9.7 million for the three months ended March 31, 2010.

For the March 2009 quarter, sales of Relenza amounted to $462 million and indicative royalties were $32.3 million.

"The reported quarterly sales for Relenza may signify governments' anticipated abatement of immediate concerns about swine flu and/or a delay in any implementation to extend or rebalance their national stockpiles, despite the pandemic's acknowledged unpredictability," Relenza said in a statement.

"According to the most recent World Health Organisation and US Centres for Disease Control updates, flu activity is low in Europe and North America, although 2009 H1N1 continues to be reported in small numbers, and is expected to continue throughout (northern hemisphere) summer and in the southern hemisphere, which is entering its flu season."

Biota said indicative royalties from Relenza in the year to date were $66.4 million.

"While future royalties are difficult to forecast, it should be noted that the June quarter has typically been the lowest of the year, due to the approaching summer season in the northern hemisphere," Biota said.

"Sales and royalties for the year and quarter ending 30 June, 2010 are expected to be advised on or close to July 22, 2010."

Biota had said in February that it was expecting a record 2010 financial year on solid Relenza royalties.

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More about: Biota Holdings, GlaxoSmithKline, SK

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