UPDATE 1-Biota to stop work on flu drug pending funding decision

Tue Apr 29, 2014 10:54am EDT

(Adds details, background, share movement)

* Influenza drug currently in mid-stage trials

* Biota expects a decision "shortly"

* Shares fall as much as 36 pct

April 29 (Reuters) - Biota Pharmaceuticals Inc said it would stop work on its experimental influenza drug until a U.S. agency decides whether to fund a trial, sending the company's shares down as much as 36 percent.

The agency, Biomedical Advanced Research and Development Authority (BARDA), awarded a five-year contract in 2011 for the late-stage development of laninamivir octanoate as a potential treatment for influenza A and B infections.

BARDA, which is in charge of developing countermeasures against public health emergencies, would fund up to $231 million towards the development of the drug and support filing of a U.S. marketing application under the contract.

Biota Chief Executive Russell Plumb said he did not "have any additional visibility or understanding" as to the nature of the pending decision, but added that he expected a decision "shortly".

The company said it would focus on releasing data on the drug's mid-stage trials.

Biota shares were down 34 percent at $3.65. The stock was the biggest percentage loser on the exchange.

More than 310,000 shares were traded by 10:45 a.m. ET, more than two times their 10-day moving average. (Reporting by Shailesh Kuber; Editing by Saumyadeb Chakrabarty and Sriraj Kalluvila)

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