Biotron sacrifices profits for R&D

Biotechnology licensing company Biotron (ASX:BIT) has sacrificed profits in favour of ramping up research and development expenditure into its cancer diagnostic and anti-HIV drug programs.

The Sydney-based company, set up to fund, commercialise and manage projects coming out of the John Curtin School of Medical Research, posted an after-tax loss of about $1 million in the six months to December 31, 2001.

Chief financial officer Peter Nightingale said that while the full year result would depend on research outcomes, the company expected to deliver further losses.

"It's a choice companies have to make, whether to capitalise or expense research costs," Nightingale said.

"We have decided to expense them, so the loss is essentially research and development, as well as employee costs and some administrative costs."

He said the company expected to be spending slightly more on R&D towards the end of the year as it accelerated its clinical trial work on the C-Test and Virion Project.

Despite its research focus Biotron did bring in $220,000 in revenue, with $206,000 in interest and $28,000 from an Australian Capital Territory research grant directed at its earlier stage work.

The company, which listed on the Australian Stock Exchange on January 24, 2001, has recently obtained ethical and protocol approval to begin a full-scale clinical trial of its C-Test.

The diagnostic tool is to be tested on 1500 Australian patients to determine its ability to detect the presence of cancer, monitor for recurrence of tumours and possibly determine the disease type by measuring levels of a serum biomarker.

Last year, Biotron entered a strategic collaboration with Bruker Daltonics for the provision of a mass spectrometry system to assist in analysis of the results.

Also included in the company's tier one program is the Virion project, through which its researchers are developing anti-HIV agents that are intended to attack the virus ion channels to prevent its spread.

Biotron said it had identified a number of potential compounds with its work published last October in the European Biophysics Journal.

Other projects under development by the company include compounds to reduce cell damage after heart attack and stroke, drugs to stimulate contraction in damaged heart muscle, screening tests to predict the metabolism and safety of new pharmaceuticals and compounds that act on gamma-aminobutyric acid receptors in the central nervous system.