Cryptome debuts on ASX

Cryptome Pharmaceuticals, the first in a series of Australian biotechs scheduled to float in the next few months, made its debut on the ASX today with a starting price of AUD$0.25 and a market capitalisation of $12.6 million, after raising $6.6 million in its IPO.

The company, which has a stock symbol of CRP, plans to use its proprietary 'cryptomics' technology to discover potentially useful pharmaceuticals from biological proteins.

"Large pharmaceutical companies are having increasing difficulty in generating new drugs at a sufficient rate and are increasingly turning to small creative companies like Cryptome to fill their pipeline," said chairman Graham Kelly. "What this market wants is a way to discover drug candidates with significantly less risk, costs and time."

Unusually for local biotechs, Cryptome is not a spin-off from a research institution. It was founded in late 2001 by entrepreneurial scientist Dr Warren Kinston and Adelaide University's Prof Matthew Vadas, along with Prof Michael Berndt from Monash University and Prof Ian Smith from the Baker Institute on the basis of a concept originally developed by Vadas, Berndt and Smith.

Cryptomics - the word signifies the company's search for hidden proteins and peptides in naturally occurring proteins -- grew out of the discovery that the human genome had far fewer genes than expected, said Smith, who as founding chief scientist helped set up the company's operations. He is now the company's senior consulting scientist in protein chemistry and proteomics.

"Even with splicing of mRNAs it doesn't explain it," he said. "But we knew that proteins could be broken down to smaller subunits with more potent or different activities, such as peptide hormones."

The question, he said, was how to identify these active cryptic protein fragments quickly. In many cases, there was a balance in the disease state between beneficial and harmful molecules, and the Cryptome technology was designed to take advantage of that balance.

"We tried to be smart about it and used evolution as our strategic partner," Smith said. "Optimised sequences are conserved -- there are many examples in nature where enzyme treatment leads to new activity."

The basis of Cryptome's technology is to use proteolytic enzymes to systematically break down proteins in a biological sample, such as plasma, tissue or cultured cells. After fractionation, the protein fragments are tested in a suitable assay system for activity.

"The platform is applicable to a wide variety of diseases. Its advantage is the speed of discovery, everything is robotic and proteomics-based," Smith said. "The screening assays are very simple, and we can use more sophisticated assays to identify the precise site of action."

Using anti-clotting assays to identify molecules involved in thrombosis, the company has already identified an anticoagulant molecule that may have utility as a treatment for heart attacks or venous thrombosis. A provisional patent has been filed while further evaluation of the molecule takes place.

Other disease targets under consideration include cancer and inflammation.

Smith said the benefit of using cryptomics to identify potential lead targets is that the human derived fragments are highly potent, unlikely to be toxic or antigenic, and may require only minimal lead optimisation.

At this point, Cryptome is planning to partner with other companies to take its compounds through clinical trials, he said.

For now, the company plans to expand its operations using the funds raised in the IPO, which are expected to keep the company operational for 18 months to two years.

"We plan to establish a cancer platform over the next 3-6 months, and develop a pipeline of hits," Smith said.

Both the board of directors and the scientific advisory board boast an impressive pedigree of biotechnology experience in Australia and internationally, with the board of directors also including Prof Axel Ullrich, director of the department of molecular biology at the Max Planck Institute in Germany, former Johnson & Johnson Research managing director Dr Denis Wade and Graham Watman, in addition to Kinston and Kelly.

As well as Vadas, Berndt and Smith, Cryptome's scientific advisory board includes Australian scientists Prof Grant Sutherland and Prof Ashley Dunn, as well as US-based professors William Hancock and John Harlan.