GSK gave up on flu drug, suit says

Lapse let rival win sales, Biota claims

An Australian company blames GlaxoSmithKline for giving up on a promising flu drug too early and rendering it a marginal second behind its competitor, which has become the treatment of choice for physicians and governments around the world.

Both drugs have proven effective against H5N1, an avian flu virus that is threatening to cause a worldwide pandemic. But recent evidence has shown that Relenza, the drug made by GSK, causes fewer side effects and might be more effective than its competitor, Tamiflu.

Biota, the Australian company that discovered Relenza and partners with GSK on the drug sales, filed suit in Australia in 2005, claiming at least $300 million in lost royalties. In an amended claim that was filed overnight, Biota says GSK sought to conceal its decision to abandon Relenza.

Jennifer Armstrong, spokeswoman for Relenza, said GSK rejects Biota's allegations, but she declined to comment further.

In its suit, Biota said that beginning in 2000 -- about one year after Relenza received U.S. regulatory approval -- GSK stopped promoting the drug, quit efforts to market it in other countries and closed manufacturing lines.

Under a partnership that dates to Glaxo, a predecessor company of GSK, Biota receives about 7 percent of the royalties on Relenza sales.

Biota claims that GSK's interests had shifted from Relenza to flu vaccines. That shift put Relenza at a disadvantage when governments began stockpiling Tamiflu and Relenza about 18 months ago to prepare for a potential pandemic.

Unable to meet the increased demand, GSK hired 70 workers and expanded Relenza production at its Zebulon plant. The expansion is part of a $100 million investment at the plant expected to be completed this year.

But the late ratcheting up of production caused Relenza to miss out when the federal government began building its supplies. About 85 percent of Washington's stockpiles are in Tamiflu, compared with 15 percent for Relenza, according to the Centers for Disease Control and Prevention in Atlanta.

Biota said it decided to file the amended claim after reviewing 200,000 documents that GSK submitted to the Australian court.

The amended claim focuses on what it says was a strategic shift by GSK away from Relenza, especially after the 2000 merger that combined Glaxo Wellcome and Smith Kline Beecham.

In 1999, the World Health Organization advised Glaxo Wellcome to prepare for stockpiling of Relenza, Biota claims the documents show. Relenza became available in the U.S.that year, two months before Swiss drug maker Roche brought Tamiflu to market.

Relenza, which is inhaled, was discovered in 1989 by scientists funded by Biota. In 1990, the small company turned to London-based Glaxo for help in developing and marketing the drug.

Today, global Relenza sales represent only about 3 percent of a $330 million commercial market.

In February 2005, scientists isolated a H5N1 strain -- from an infected 14-year-old Vietnamese girl -- that had become resistant to Tamiflu. The finding was published in the scientific journal Nature.

A paper published in the British medical journal Lancet in August 2005 said that Tamiflu caused more adverse reactions, including diarrhea and vomiting, than Relenza.

GSK, which has a U.S. headquarters in Research Triangle Park and employs about 6,000 in the Triangle, has long said that physicians and patients preferred flu shots and Relenza wasn't popular because it is a powder that must be inhaled. Tamiflu is a pill.