Biota signs new flu diagnostic agreement

Biota (ASX:BTA) has signed a new agreement with its US-based flu diagnostics partner Thermo Electron giving it a profit share in a second influenza diagnostic kit, FLU OIA A/B.

The new agreement is similar to a previous profit share arrangement with Thermo for the FLU OIA test, which brought AUD$2.3 million of revenues into the company in the first half of this financial year.

CEO Peter Molloy said a US$750,000 payment to Thermo to contribute towards product development costs would be fully offset by expected revenues from the new product during the second half of the current financial year, and the company expects to see significant revenues from the two tests over the next few years.

The two companies hope to expand the market for flu diagnostics. Outside the US, Thermo has exclusive marketing rights for both products in Europe, Japan and Australia/New Zealand, while Biota's territory includes Asia and the rest of the world.