Feds kill Alpharetta drug firm’s contract for flu treatment

The federal government killed its contract to help an Alpharetta pharmaceutical firm develop a treatment to battle potential flu pandemics, the company reported Thursday. The termination follows moves last week by a federal agency to temporarily halt its contract with Biota Pharmaceuticals.

The latest hit sent Biota’s stock price plummeting Thursday. Much of the company’s focus recently had been around its flu treatment.

“No reasons for the termination for convenience were provided to the Company,” Biota reported in a press release Thursday. In the same release, company chief executive Russell Plumb said Biota is “somewhat perplexed” by the termination.

U.S. government has spent $34 million to help Biota test the drug with hopes of winning approval to bring it to market in the United States. The government had agreed to spend up to about $231 million on the project over five years. But last week a federal official said a review found “significant challenges” that could cause delays and cost increases in the work. Biota’s contract is through the Biomedical Advanced Research and Development Authority (BARDA), which is part of the U.S. Department of Health and Human Services.

A BARDA official said last week that the agency does not have safety worries about the drug, laninamivir octanoate, but that concerns had arisen about the enrollment of subjects in clinical trials, the cost of additional trials, the “emergence of resistance to laninamivir in recent H7N9 virus strains, and the feasibility of laninamivir for treatment of critically ill, hospitalized patients with influenza.”

The authority is building a system to develop and buy medicines and other material for public health emergencies. BARDA supports more than 50 medicines, diagnostics and vaccines tied to influenza.

The same drug Biota was testing for U.S. approval has already been used by millions of people in Japan.

Biota moved its headquarters to Alpharetta from Maryland last year.