Biota's potential damages claim against GlaxoSmithKline could be as high as $430 million

Jul 26 2005

Biota Holdings Limited of Melbourne, Australia, has announced its Particulars of Loss and Damage in its suit against GlaxoSmithKline (GSK) for failing to support Biota’s influenza drug, Relenza. The damages assessment was filed with the Victorian Supreme Court and estimates Biota's losses in the range of $308 million to $430 million.

“We remain very confident about the strength of our case,” said Biota Chairman, John Grant. “This damages assessment amplifies the importance of the case for Biota.”

The damages assessment refers to a conservative market growth scenario, which assesses damages at $308 million, and a moderate market growth scenario, which assesses the damages at $430 million. Both scenarios assume that Relenza would have achieved a 40% market share and that GSK had introduced an improved inhalation device and pursued regulatory approval for prevention of influenza as well as treatment. Currently, Relenza holds only around 1% of the worldwide sales of influenza antivirals.

The size of the potential damages claim has been boosted by recent strong growth in the sales of influenza antivirals. Since the suit was filed in May 2004, the prescription market for Relenza’s class of flu antivirals has grown by more than 70% to around US$500 million ($650 million), on top of a similar growth the previous year. In addition, there have been very high levels of stockpiling of influenza antivirals by numerous national governments to meet the growing threat of pandemic flu. The governments of Australia, United Kingdom, France, USA and Japan among others have moved to stockpile large reserves of flu antivirals over the last year, and current and future orders are forecast to result in around US$3 billion ($4 billion) in sales over the next two years.

Biota has indicated its damages assessment is provisional and that it may revise it in the future based on new data as it comes to hand. The next significant step in the litigation as required by the Victorian Supreme Court is the mediation phase, which is scheduled to take place by 25 November 2005.