'Frustrating' delays for Chemeq's regulatory approval

Regulatory approval for Chemeq's (ASX:CMQ) polymeric antimicrobial CHEMEQ has been delayed in some jurisdictions, pushing expected registrations out in some cases to 2007.

"It's frustrating, but that's life in the pharmaceutical industry," said Chemeq CEO David Williams.

CHEMEQ has been approved for sale in South Africa for pigs and poultry, and in New Zealand for pigs and can be sold in Malaysia for pigs and poultry. The company is in the process of applying for regulatory approval in the US and Europe and the US Food and Drug Administration has accorded expedited review status to Chemeq's application.

However, there have been delays in other countries such as Australia, Brazil and Thailand, with additional information being requested by the regulators.

The Australian Pesticides and Veterinary Medicines Authority has requested additional data with registration now expected in early 2007. "We expect that will be the last bit of information they require," said Williams.

Legal changes to the registration process in Brazil means that Chemeq has had to provide additional data to the country's regulatory agency. "That's pushed that out to the new year," said Williams.

Thailand's regulatory has also requested more information. "We've provided some of it and others we're talking through it with them," said Williams. "That's going to be the start of next year as well."

For poultry in New Zealand, registration is expected shortly with Chemeq currently preparing a final report on additional data required by the regulator. "That's definitely on target for this half of the year," said Williams.

Half year results

Meanwhile, Chemeq has posted a cash balance of AUD$41.7 million for the half year ended December 31, 2005 and revenues were up 482 per cent to $1.4 million.

"We've got a very healthy cash balance due to a cash injection from the bond holders. It's there accruing interest, so most of the revenue is actually interest revenue," said Williams.

Stark Trading last year purchased convertible bonds held by fellow investor, Japanese group Mizuho International, leaving Stark and its affiliate Shepherd Investments International with 100 per cent of the $60 million convertible bonds issued to Chemeq.

The company's loss was also down 69 per cent to $13.6 million due mainly to the write down of the company's Rockingham manufacturing facility in the previous corresponding period. "The loss was also less because we had the interest revenue in there, we've had more production and we had the costs of financing in the previous period which we don't have that in this period," said Williams.