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June 2 Biota Pharmaceuticals Inc said it plans to cut its workforce by about two-thirds and shut down its facility in Melbourne, Australia following the loss of a key government contract.
The Department of Health and Human Services terminated its 2011 contract with the company to provide up to $231 million to support the development of Biota's lead experimental influenza A and B treatment, laninamivir octanoate, in the United States.
Biota said it would incur related charges of about $5 million-$5.5 million in connection with the restructuring, which it expects to be complete by the first half of 2015.
The company had 89 employees as of June 30, 2013, according to its 2013 annual report.
The restructuring would help Biota cut costs by about $8 million-$10 million, the company said in a statement on Monday.
Biota's partner, Daiichi Sankyo Co Ltd, has been marketing laninamivir octanoate in Japan since 2010 under the brand name Inavir.
Alpharetta, Georgia-based Biota's stock closed at $2.69 on the Nasdaq on Friday. (Reporting by Natalie Grover in Bangalore; Editing by Simon Jennings)