Gradipore ups projected loss to $16m

Sydney separation technology specialist Gradipore has revised upwards its projected loss for the financial year, from $AUD12 million to up to $16 million.

The company said that while it had reined in its cash burn, revenues were disappointing, and it was reviewing expenditure in each of its business units.

Slow customer take-up of Gradipore's Gradiflow BF400 research instrument was partly to blame for the revenue woes, the company said.

Company secretary Simone Lockwood said the BF400, released to the market earlier this year, was originally targeted at monoclonal antibody applications. But that had proved to be a mistake, she admitted, as potential customers stayed with tried and tested methods like affinity chromatography.

Lockwood said that as a result of its new knowledge of the market, Gradipore had taken the versatile instrument back to the drawing board to conduct R&D on other applications, including proteomics.

Meanwhile, sales in the company's commercial separations division were up, but still below forecast. "Proof of principle agreements have been successful but conversion into manufacturing agreements remains a major challenge," the company said.

Lockwood said that for example, in the case of Gradipore's development agreement with Aventis, the company had run up against Aventis' merger with Bayer and adopting the new technology was "[low] on their list of priorities".

But she said a development agreement signed in February with US company Serologicals to apply Gradiflow to plasma protein purification was proving much more successful.

Gradipore's gel division also ran into trouble during the year, when problems encountered during manufacture of a new extended gel line pushed back deadlines and caused cost blowouts. But Lockwood said the problems were being addressed.

The company's US arm had been scaled back to its core business of selling gels to the US market, she said, and was facing a downturn in spending overall. The company said market response to the extended range had been encouraging and sales were growing steadily.

Lockwood said the company had enough funding to see it through its difficulties. Meanwhile, Robert Lieb, who resigned from the CEO position after less than a year in the job, was remaining with Gradipore until a replacement was found.

Gradipore's year

• May 2002: Robert Lieb appointed CEO after international executive search.
• September 2002: Jeremy Davis appointed chairman.
• January 22: Citing a revenue shortfall, Gradipore implements a 15 per cent staff cut, mostly at its Sydney HQ. Former executive chairman John Manusu steps down (remains as non-executive director
• February 6: Experiments at the Scottish National Blood Transfusion Service demonstrate Gradiflow effectively removes infectious prions from human blood.
• February 13: Gradipore signs with Hong Kong company Advantek Biologics to apply Gradiflow technology to biosafety of plasma fractions.
• February 25: Half-year results show 26 per cent sales increase, but company casts doubt on its ability to halve its operating deficit. Forecasts $4 million second-half loss. Announces development agreement with US company Serologicals to apply Gradiflow to plasma protein purification.
• April 2: Lieb resigns as CEO, agreeing to stay on until his replacement is found.
• May 15: Revises anticipated annual loss from $12 million to $15.5-16 million.