Giaconda aims for Sept IPO

Sydney-based gastrointestinal drug development company Giaconda, has opened its initial public offering and plans to list on the ASX in late September, with the aim of raising AUD$6 million.

Giaconda was incorporated in 2004 to commercialise the therapies of Prof Tom Borody who is an internationally recognised authority on the diagnosis and treatment of gastrointestinal disorders and founder of the Centre for Digestive Diseases (CDD) in Sydney.

Borody believes that many gastrointestinal orders are conditions caused by infection and this has led him to develop and patent therapies which treat these causes, rather than the symptoms.

Giaconda CEO Patrick McLean said he was so excited by the technology he came out of retirement and moved to Australia to lead its commercialisation, "It was really only about three weeks of retirement.

"I meet Tom Borody at last year's digestive diseases conference in New Orleans. I saw his work and it is superb -- he is a genius and when you meet some of his patients you see he has an innovative approach to disease."

Prof Borody has used existing, registered antibiotics, in varying dosages and combinations, to establish what have been found to be effective treatments in initial clinical trials across a range of gastrointestinal diseases.

"All the patents and therapies come from clinical experiences. They haven't just been tested on poor mice in labs. They are clinically proven and close to market," said McLean.

The company's commercial strategy is to focus on five products initially although it has also secured a pipeline of similar developments from the work. Giaconda has already been granted 20 patents for its intellectual property, with another 19 patent applications filed. Ultimate product registration is intended for Australia, the US and Europe.

Giaconda's most advanced product Myoconda for Crohn's disease, has finished its first phase III trial.

"We will have to do one more phase III for FDA approval and believe it should be approved in the US by 2008," said McLean.

"Tom's approach is that Mycobacterium avium Paratuberculosis (MAP) is the cause of Crohn's disease. It is almost a revolution in the treatment of Crohn's and there are more and more people being converted to it everyday. The current treatment for Crohn's disease suppresses a symptom of the disease," he said.

Giaconda's product Heliconda for bacterial stomach infection causing peptic ulcer disease has finished its first phase II and those results should be published within the next couple of months. They are likely to follow 1 to 2 years behind Myoconda.

Commencing phase II trials directly after the IPO is Hepaconda for hepatitis C and other liver diseases. Giaconda's other products are Picoconda for bowel preparation for colonoscopy and Iboconda for irritable bowel syndrome.

Based on IPO pricing, Giaconda will have a market capitalisation on listing of $36.25 million, with the initial capital raising being low since Giaconda intends to pursue a licensing strategy with partners to fund the final development phase to commercialisation.

"We are simply attempting to add enough value to get credibility with the licensees so that they can justify the investment for clinical development and licensing.

"We prepared a five year plan and part of the strategy was to create a checklist of 11 questions for possible partners -- 41 companies fitted the criteria for licensing. We have spoken to 20 of them and they represent 25 countries. They have all said that yes it is a good idea -- we need new products and now. They just want us to move the products a little bit further along."

McLean believes it is important to have a strong management team backing up the science, "Even though Borody is the inventor he is not CEO. We have brought in a lot of people with commercial experience, chairman, Chris Bilkey is ex Pharmacia and has over 24 years experience and I have 21 years experience -- all of it in gastroenterology."

The IPO is fully underwritten by Findlay & Co and the company will issue 12 million shares at $0.50 each. The offer is expected to September 2, with the listing anticipated for September 19.