Bionomics upbeat despite bigger annual loss

Adelaide epilepsy specialist Bionomics (ASX:BNO) has reported an after-tax loss of $4.54 million for the year to June 30, up from $3.49 million in 2001-02.

But Bionomics CEO Dr Deborah Rathjen was upbeat about the result, pointing out that much of the loss was accounted for in the company's continuing, strong investment in R&D --- about $3.7 million for the year, up from $3.5 million in 2001-02.

Cash on hand at the end of June was over $6 million, enough to sustain operations for around 16 months at the current burn rate, but Rathjen pointed out that Bionomics had secured an equity line finance arrangement with the Bank of New York in July this year which allows the placement of up to 6 million shares through the bank once the company's share price exceeds a minimum of 50c.

"Our share price at the time was 26c, and we were basically telling the market it should be much higher," said Rathjen. "We rose another 11 per cent... with the release of our full-year results [on Thursday]."

Bionomics was trading at 39c at press time, but has traded as high as 69c in the past 12 months.

The company reduced net operating and investing cash outflows by 15 per cent, and spent only $43,000 on research-related capital items, a 97 per cent reduction on 2001-02's figure of more than $1.5 million, incurred in fitting out its new research facility in Thebarton. "It was the year we went from being a virtual biotech to a more integrated company," Rathjen said.

Net cash outflow for the 12 months was $2,554,000, up on last year's $1.2 million.

'Epilepsy Inc'

Rathjen said Bionomics was well on the way to becoming 'Epilepsy Inc' -- the dominant international player in the field of epilepsy diagnostics and therapeutics.

The company's researchers have identified well over the half the world total of more than a dozen genes known to be involved in inherited and sporadic forms of epilepsy, and during the year developed the world's first transgenic mouse model of a human brain disorder called absence epilepsy.

Rathjen said the other big development on the epilepsy front was Bionomics' agreement with US-based diagnostics company Nanogen to develop the world's first molecular diagnostic for epilepsy, which produced the company's first licensing revenues from its epilepsy program.

The Nanogen diagnostic will enable neurologists to test children for severe childhood myoclonic epilepsy (SCME), a rare form of epilepsy, whose symptoms can be difficult to distinguish from those of several other forms of childhood epilepsy.

Rathjen said a diagnostic would be potentially life-saving. Children with SCME do not respond to conventional anti-epileptic drugs like benzodiazepine, which can actually worsen the disorder by inducing prolonged seizures - victims can suffer brain damage, or even die.

The molecular diagnostic will be designed to identify mutations in the ion-channel gene that cause SCME.

The company is using its $2.87 million federal Start grant to identify lead compounds for novel anti-epileptics.

Rathjen said a third of Bionomics R&D activity was related to cancer. The market is taking a keen interest in Bionomics' recently discovered BNO1 gene, a promising prognostic marker for susceptibility to breast cancer. "One of our objectives is to increase our licensing revenues. We stack up pretty strongly -- we have 350 genes, and with $6.1 million in the bank, it should give investors some confidence that we'll be able to deliver on licensing," she said.