Contract business boosts Progen revenue

Progen Industries has posted a 58 per cent year-on-year revenue gain, due largely to the performance of its life sciences business, particularly its contract drug manufacturing unit.

That contribution - plus the sale of non-core assets - reduced the drug development company's operating loss to $690,000 for the 2001-2002 financial year compared to a $2.1 million loss the previous year.

Progen pushed revenues from its biotechnology and R&D services to $3.85 million for the financial year just ended.

The improvement in its commercial services division helped trim operating losses for the company, which is heavily involved in US and Australian clinical trials of its anti-cancer drug PI-88.

As anticipated, Progen exceeded its original revenue target of $3 million by 29 percent for the year.

Progen CFO Milton McColl termed the result a "significant achievement for an Australian biotechnology company in the current financial environment."

Next year is being viewed by the company as a consolidation period for its contract manufacturing arm where revenue gains of about 10 percent are expected.

The company reported an operating loss of $6.156 million from ordinary activities compared to a loss of $1.147 million for the previous period. The previous year's result included a reported gain of $5.180 million associated with a 19.9 percent equity stake in Medigen Biotechnology Corporation.

Progen's R&D expenditures for the year rose slightly to $4.17 million compared to $4.15 million for the corresponding previous period. The increase was linked to start of Phase II human trials and costs incurred through refining its drug development technology platform.

During the financial year, Progen initiated three new clinical trials with PI-88 in melanoma, multiple myeloma and non-small cell lung cancer and lodged two patent applications to cover the chemistry underlying its technology platform.