Following a successful launch of the flagship product Relenza®, the company decided to focus on the viral respiratory disease area, and found partners to fund its non-core projects in diabetes, cancer, and Alzheimer's disease. If Biota had continued to commit itself to this single product class, its life span would have been equivalent to that of its products: Relenza® and second-generation NI FLUNET®. With the disappointing performance of Relenza®, Biota realized the need for a shift in strategic direction, broadening its niche to develop additional profitable product life cycles. Biota is now targeting, not only influenza and rhinovirus (the common cold), but also other viral agents such as HIV, hepatitis C, respiratory syn-cytial virus (RSV - for which it received a $2.7 million R&D start grant in 2003), and the SARS virus, as well as fungal, bacterial, and inflammatory diseases and cancer.
Biota is employing the classic strategy of using successive product life cycles to sustain its growth. Biota is moving from Phase I of Greiner's (1972) stages to Phase II, of 'Growth through direction'. After 'growth through creativity' (its outstanding collaborative R&D and flagship product launch; an evolutionary stage of growth), a 'crisis of leadership' (a revolutionary stage) occurred. Following the Relenza® debacle, and a threatened hostile takeover, there was a management shakeout, and restructure in early 2003, to expand business development internationally, and broaden the pipeline through external partnerships. The new CEO has experience in the North American biotech region that provides deal-making and technology collaboration strengths.
Biota established its US subsidiary Biota Inc in California in 2001, the key to its long-term international strategy. Business development and Biota's CEO are now based in the USA. Biota Inc has now established a new drug discovery platform, N-MAX, which has been licensed to GSK for $6.5 million to develop hepatitis C treatments. Australian R&D has been refocused on the multivalent coupling (MUCO) technology and chronic diseases. Biota has developed substantial intellectual capital drawing on its experience with Relenza®. Specific IP includes platform drug discovery technologies structure based drug design (SBDD) and MUCO, which are able to greatly reduce innovation cycle times, a factor critical to success in the biotechnology industry. Biota also owns the most sensitive diagnostic test for influenza, FLU OIA, which is very profitable, and now has a profit-share agreement around a second diagnostics kit, FLU OIA A/B. In addition, it has operational R&D facilities in Australia and the USA.
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