Australia's Biota settles with Glaxo for A$20 mln

MELBOURNE (Reuters) - GlaxoSmithKline Plc's (GSK.L) Australian partner on flu drug Relenza, Biota Holdings Ltd (BTA.AX), has settled its damages claim against Europe's biggest drugmaker for A$20 million ($19 million), Biota said on Monday.

Melbourne-based Biota had been seeking as much as A$704 million ($683 million), accusing Glaxo of failing to promote the product properly.

Each company will pay its own legal costs.

Shares in Biota, which started its litigation in May 2004, fell 2.6 percent to 76 cents in an overall market up 2.7 percent .AXJO.

Biota Chairman John Grant said the company had agreed the deal after advice the trial was likely to be significantly delayed, escalating costs and risks.

"Biota and Glaxo have agreed to normalise their relationship to pursue the best interests of Relenza, with senior executive liaison and co-operation between the companies to be restored and strengthened," Biota said in a statement.

There has been a recent boom in demand for flu drugs, which are being stockpiled by governments around the world in case of a pandemic that may be triggered by bird flu.

Relenza, known generically as zanamivir, was developed by Biota and licensed to Glaxo in 2000, which then brought it to market. But it never became a top seller, lagging well behind Roche Holding AG's (ROG.VX) more convenient Tamiflu tablet.

In recent months, Glaxo has started to ramp up Relenza production and sales, thereby boosting revenues to Biota, which earns a 7 percent royalty on product sold.