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Note 7 - Licences, Royalty Collaborative and Contractual Arrangements
9 Months Ended
Mar. 31, 2013
Collaborative Arrangement Disclosure [Text Block]
(7)    Licenses, Royalty Collaborative and Contractual Arrangements

Royalty agreements

The Company entered into a royalty-bearing research and license agreement with GSK in 1990 for the development and commercialization of zanamivir, a neuraminidase inhibitor (“NI”) marketed by GSK as RelenzaTM to treat influenza. Under the terms of the agreement, the Company licensed zanamivir to GSK on an exclusive, worldwide basis and is entitled to receive royalty payments of 7% of GSK's annual net sales of RelenzaTM in the U.S., Europe, Japan and certain other countries as well as 10% of GSK's annual net sales of RelenzaTM in Australia, New Zealand, South Africa and Indonesia. Beginning in 2014, the patents on RelenzaTM are scheduled to expire in certain countries and are scheduled to fully expire in 2019.

The Company also generates royalty revenue from the net sales of Inavir® in Japan, pursuant to a collaboration and license agreement that the Company entered into with Daiichi Sankyo in 2009 related to the development and commercialization of second generation, LANI, including laninamivir octanoate. In September 2010, laninamivir octanoate was approved for sale by the Japanese Ministry of Health and Welfare for the treatment of influenza, which Daiichi Sankyo markets as Inavir®.  Under the agreement, the Company currently receives a 4% royalty on net sales of Inavir® in Japan and is eligible to earn commercial milestone payments.  Under the collaboration and license agreement, the Company and Daiichi Sankyo have cross-licensed the related intellectual property, and have agreed to share equally in any royalties, license fees, or milestone or other payments received from any third party licenses outside of Japan. Patents on laninamivir octanoate in Japan generally expire in 2024.

Collaborative and contract arrangements

On March 31, 2011, the Company’s wholly owned subsidiary, Biota Scientific Management Pty Ltd., was awarded a contract by BARDA for the late-stage development of laninamivir octanoate on a cost-plus-fixed-fee basis, the total of which is not to exceed $231.2 million. BARDA is part of the U.S. Office of the Assistant Secretary for Preparedness and Response ("ASPR") within the U.S. Department of Health and Human Services ("HHS"). The BARDA contract is designed to fund and provide the Company with all technical and clinical data, and to establish U.S. based manufacturing, to support the filing of a U.S. new drug application (“NDA”) with the FDA for laninamivr octanoate. The performance period of the BARDA contract commenced on March 31, 2011, and continues for five years.

The Company is considered an active participant in the BARDA contract, with exposure to significant risks and rewards of commercialization relating to the development of laninamivir octanoate. Therefore, revenues from and costs associated with the contract are recorded and recognized on a gross basis in the consolidated statement of operations. Revenue totaling $22.5 million has been recognized to-date pursuant to this contract.

The following tables summarize the key components of the Company’s revenues for the three month and nine month periods ended March 31, 2013 and 2012:

   
Three Months Ended March 31,
 
   
2013
   
2012
 
   
(in millions)
       
Royalty revenue  – RelenzaTM
    $1.7       $1.7  
– Inavir®
    3.2       3.6  
Commercial milestone – Inavir®
    2.9       -  
Service revenue under BARDA contract
    4.5       1.7  
Revenue under other contracts, grants and collaborations
    0.2       0.1  
Total revenue
    $12.5       $7.1  

   
Nine Months Ended March 31,
 
   
2013
   
2012
 
   
(in millions)
       
Royalty revenue  – RelenzaTM
    $2.7       $2.4  
– Inavir®
    4.1       4.3  
Commercial milestone – Inavir®
    2.9       -  
Service revenue under BARDA contract
    13.7       6.2  
Revenue under other contracts, grants and collaborations
    1.0       0.4  
Total revenue
    $24.4       $13.3