BIOTA HOLDINGS LIMITED (BTA) are due to report first half results within the next week or two. There has been considerable coverage on the indicative $32.6M quarterly royalty on the $462 million in Relenza sales by GSK. David Symons wrote an excellent preview of the quarterly royalties which is worth a read. It’s good to see at least one journalist now has an in-depth understanding of Biota.

With earnings due and $56.7 million in anticipated royalties I decided now was a good time to look back at Biota’s revenue over the last five years.

Over the last three years revenue from collaboration has been consistent ($15-18M) while royalties has jumped around considerably ($21-45M). Diagnostic kits provided 30% of revenue in 2005, today they no longer contribute.

With Relenza finally gaining traction in the market and GSK increasing production and focusing on the stock piling market, royalties should be more consistent going forward. It appears most analysts disagree with my assessment and see a sharp drop in sales in 2011. While 2010 will be a peak year for royalties, looking at Tamiflu sales I see a probability of future healthy sales for Relenza.

In 2009 royalties were 70% of the business. In the 2010 first half they’ll contribute an even greater slice. Biota’s Chairman, Jim Fox, indicated at the AGM he wants a rest of world LANI deal this financial year so even with booming Relenza sales the revenue mix should continue to be diversified.

Looking forward, based on production levels I see Relenza royalties of around $80-100 million in the second half. Analysts are predicting $60 – 130 million in royalties for FY10.

Disclosure: Long Biota

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