Chemeq's drug approved for sale in South Africa

Chemeq has announced that it has received its first regulatory approval for sale of its veterinary drug CHEMEQ polymeric antimicrobial in South Africa.

"This approval is especially important for us," said Dr Alistair Murdoch, Chemeq's corporate marketing manager.

"It not only demonstrates Chemeq's international capabilities and opens the door for marketing in South Africa, but it also sets a precedent which will favourably influence the approval processes in other jurisdictions, especially Asia," he said.

The company now plans to provide up to 10 South African farmers with the drug from the company's pilot production plant in order to allow them to assess its usefulness, according to CEO Graham Melrose.

He said Chemeq had a reasonable expectation that farmers would place sales orders for the antimicrobial in anticipation of commencement of commercial scale production, which is expected to begin early next year.

"It's very important for a new product to get an accurate opinion formed, we want an accurate perception of the product," Melrose said.

Chemeq's antimicrobial drug will provide an alternative to the use of human antibiotics, which are commonly used. In pigs and poultry, the two industries initially targeted by Chemeq, antibiotics are used as growth promotants.

Regulatory agencies around the world are discouraging use of human antibiotics for these purposes as they promote the development of antibiotic resistant 'superbugs'.

Chemeq is also proceeding with regulatory approval in a number of other countries including Australia, New Zealand and the USA as well as a number of Asian countries.

They expect that approval in New Zealand will occur in the next few months, followed by Australia and the US, where the product has been fast-tracked by the FDA.

Melrose said that South Africa and New Zealand were good test markets for new pharmaceutical products, in part because their regulatory approval processes were relatively quick compared to Australia and the US.

"Pharmaceutical companies traditionally use New Zealand and South Africa as a stepping stone. It shows that you have got something of substance," he said.

Initially, Chemeq hopes to target the pig and poultry markets in South Africa and Asian countries, followed by Australia and the US. In Asia alone, the pig market is worth $120 million, not including China, which is worth more than $1.1 billion.

Chemeq's commercial-scale manufacturing plant is currently under construction in Rockingham, Western Australia. Melrose said that commercial production is expected to begin in early 2003. "We hope we will have a list of back orders for the plant when it comes online," he said.

Chemeq was recently highlighted as one of the top performing Australian stocks for the 2001-2002 financial year, gaining 525 per cent value over the year and reaching a high of $3.25 in February this year. At the time of writing, Chemeq's stock price had increased almost 9 per cent to $2.50.