Cancer drug trials lift Progen losses

By Graeme O'Neill
Friday, 29 August, 2003

Research and development costs -- including the expense of continuing clinical trials of its promising anti-cancer drug PI-88 -- have seen Brisbane drug-development company Progen Industries (ASX:PGL, NASDAQ:PGLAF) post a net operating loss of AUD$7.8 million to June 30.

Progen's operating loss from ordinary activities was $5.9 million, a 20 per cent increase on its $4.9 million loss in 2002, but in line with budget expectations, according to CFO Milton McColl.

The net operating loss includes $1.7 million due to equity accounting of Progen's 19.9 per cent interest in Taiwanese company Medigen Biotechnology Corp.

The company's total revenues were $8.2 million, up 44 per cent on the 2001-02 figure of $5.7 million. Progen's commercial services division accounted for more than half this figure -- its $4.8 million contribution was up 24 per cent on the last year's figure of $3.9 million.

McColl said the company was "very pleased" with the unexpected result. "They have turned this business unit into a self-sufficient, revenue-driving entity, increasing revenue 400 per cent since 2001."

Commenting on the increase in operating expenses, Progen MD Lewis Lee said the company's burn rate had been kept "manageable" while it substantially increased its PI-88 clinical trial program.

PI-88 is being trialled in patients with advanced melanoma at the Rocky Mountain Cancer Therapy Centre in Denver, Colorado. Three patients with advanced, malignant melanoma are still alive after two years on the drug, which inhibits blood-vessel formation, starving secondary tumours of oxygen and nutrients that normally fuel their rapid growth.

In a recent article in the Rocky Mountain News, a doctor supervising the Denver trial described PI-88 as "an unprecedented success" in treating malignant melanoma, one of the most aggressive and rapidly lethal of all cancers.

McColl said Progen was now having discussions with several large pharmaceutical companies, looking for a potential partner to take PI-88 into Phase III clinical trials.