AGT and Garvan team up to target diabetes

AGT Biosciences (ASX: AGT) has expanded its stable of programs in diabetes and obesity research, signing a collaborative research agreement with Sydney's Garvan Institute of Medical Research to identify molecules as potential therapeutics for type II diabetes.

Type II or 'adult onset' diabetes affects people over 30 and often runs in families. It occurs when less insulin is produced, or when the insulin that is produced is less effective.

The Garvan's Prof David James, who is also a member of AGT's scientific advisory board, will lead the foray to identify proteins which regulate glucose transporters in muscle and fat cells. Proteins which interact with these regulator proteins may be good drug targets for type II diabetes.

"This collaboration reflects the established strengths of AGT Biosciences' protein-protein interaction group and our ability to identify novel binding partners for specific targets," said AGT's CEO Greg Collier.

"We bring to the table our ability to look at the commercial potential of these targets. We also have the pharmaceutical connections to accelerate discoveries," he said.

AGT already has a long-term collaboration with European pharmaceutical company Merck Sante, which has now generated 73 gene and protein targets for diabetes and obesity. "This [Garvan deal] separate to that program in that the discoveries here are not linked to our Merck grant," Collier said. "These are discoveries that we would be able to be commercialise independently."

Half-years

Meanwhile, half-year figures announced last week show AGT reduced its loss by 11 per cent to $1.3 million, despite an 8 per cent reduction in revenues to $1.9 million, largely due to currency fluctuations during the period.

"The good news is that we have continued to reduce costs and we're still on target to push down costs further in the next six months," Collier said.

He said the first two quarters of the year had been successful with the company achieving a number of scientific milestones, the award of a number of US and Australian research grants to AGT researchers and collaborators, and a move towards developing OTC drugs for obesity and diabetes.

Two of the company's validated diabetes and obesity targets, PSARL and SelS, have also been identified as playing a role in specific cancers, opening the doors for the company to partner them out for these indications.

Collier said that for the rest of the financial year, the company would be focusing on expanding its platform technology business and completing deals around its depression and anxiety gene discovery project. "That's where the action will be," he said.

-- Additional reporting by Melissa Trudinger