A year after listing, Cellestis reflects on achievements

Cellestis (ASX: CST) is a quiet achiever in the Australian biotechnology scene.

The company has only been in existence for 18 months, raised $10 million in its ASX float just over a year ago and in November received approval from the FDA for its QuantiFERON-TB test for latent tuberculosis (TB).

According to CEO Dr Tony Radford, the test is the first new product for latent TB testing in 100 years. Cellestis hopes that QuantiFERON-TB will replace the Mantoux skin test, which is currently used as a latent TB screening test.

The Mantoux skin test is based on the injection of a small quantity of tuberculin (proteins derived from the TB bacterium Mycobacterium tuberculosis) into the skin. After 48-72 hours, the reaction is measured. A reaction of 10 mm or more is generally considered positive, although prior vaccination interferes with the result

In contrast, the QuantiFERON-TB test measures the production of gamma-interferon (IFN-gamma) by T cells in the blood in response to the tuberculin. After adding tuberculin to a sample of whole blood and incubating overnight, the amount of IFN-gamma is measured by ELISA.

Clinical trials have shown that Cellestis' test gives comparable results to the Mantoux skin test, and has the advantage of not requiring a follow-up visit.

Radford said that the test was highly reproducible and did not require particularly expensive equipment.

The QuantiFERON test was initially developed at CSIRO by Radford along with Professor Paul Wood and Dr Jim Rothel (now Scientific Director at Cellestis), as a means of rapidly testing cattle for bovine TB. This was later commercialised and marketed by CSL's Animal Health division.

CSL Bioscience also developed the human version of the test. Phase III tests were funded and performed by the US Centre for Disease Control and the US military, who are potentially major users of the new test.

In late 2000, Cellestis took up the license for the use of the QuantiFERON platform for human testing from CSL.

The company filed for approval in June last year and received expedited approval from the FDA in November.

Radford said that the company hopes to have an operating profit by the end of 2003. Currently they are focusing on expanding their US operations, which are based in California, as well as marketing the product to potential customers.

In addition to the US military, Cellestis hopes to market the kit to public health organisations and other medical facilities that perform a lot of TB tests. TB is a public health problem in regions of the US with a high proportion of immigrants, such as Texas and California.

He said the biggest challenge is to get the new test accepted by the public health professionals who currently use the Mantoux skin test, noting that the buying cycle for a lot of these organisations was long.

Cellestis aims to sell 1.5 million tests per year by 2005, Radford added.

Although the initial test is for TB, Cellestis plans to use the platform to develop other tests including one for Lyme disease. Future targets also include cancer diagnostics and other diseases that generate a cell mediated immune response.

In addition, the company is developing a second generation TB test using an improved version of the tuberculin protein to stimulate the cells, said Radford.

According to biotech analyst Mark Pachacz, Cellestis is one of the few companies that have held up through the downturn in the biotech market.

"The stock is holding up fairly well at the moment, which is surprising given the market," he said.

At the time of writing, Cellestis was trading at $1.68.