Shares of Alpharetta-based Biota Pharmaceuticals were down only slightly Wednesday after taking a big hit the day before when the biopharmaceutical company disclosed it has been ordered by the Department of Health and Human Services to halt research on a drug it is developing for flu prevention.
In a statement, President and Chief Executive Officer Russell Plumb said the company, which moved its headquarters to Alpharetta last year from Maryland, is surprised at the “stop work order” and did not have “any additional visibility or understanding” about the decision. The order came during a review of its work.
The company is under contract with HHS’ Office of the Assistant Secretary for Preparedness and Response and Biomedical Advanced Research and Development Authority to develop laninamivir octanoate, a long-acting neuraminidase inhibitor for the prevention of influenza A and B.
Biota was conducting a large, multinational Phase 2 trial, called IGLOO, that involved adults infected with influenza. The company said the contract with HHS is designed to provide up to $231 million in financial support to complete the drug’s clinical development.
Biota said a Japanese partner received approval in December to manufacture and market the drug under the generic name Inavir.
Biota was formed after the merger of Nabi Pharmaceuticals and Biota Holdings Ltd. The company is led by Plumb and Joe Patti, former executives at Inhibitex, an Alpharetta-based clinical-stage drug development company acquired by Bristol-Myers Squibb Co.
“We are complying with the order and focusing our efforts on critical path activities for the program not covered by the order, namely completing the conduct of and finalizing the data from our Phase 2 IGLOO trial,” Plumb said.
The company also is developing a treatment for enteroviruses, including human rhinovirus, and for respiratory syncytial virus.
In Nasdaq trading Monday, the company’s stock closed at $5.57 on a trading volume of 103,643 shares. After the announcement Tuesday, the stock lost a third of its value, closing at $3.68 on volume of more than 1 million shares.
At midday Wednesday, Biota was trading at around $3.65, down about 2 cents a share.
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