Lacklustre listing for Dia-B Tech

ASX debutant Dia-B Tech (ASX:DIA) suffered a poor debut today; although its shares listed at $0.27, they quickly fell below their $0.20 issue price and at time of writing were trading at $0.17.

But investors, who put $6 million into the oversubscribed initial public offering, could not dismiss Dia-B Tech as just another one-trick company: it launched with a portfolio of four projects, all related to the treatment or prevention of Type 1 (insulin dependent) and Type 2 (non-insulin dependent) diabetes.

Professor Paul Zimmett, foundation director of the International Diabetes Institute at Monash University, describes the four projects as "not bad for a little operation".

Zimmett, who leads the insulin-sensitising factor (ISF402) research project at Monash, said developed nations are experiencing an epidemic of Type 2 diabetes, associated with obesity.

In this form if diabetes, patients continue to make insulin, but their cells become insensitive to the hormone, which regulates blood glucose levels.

In the early 1970s Zimmet and Monash University colleague Associate Professor Frank Ng discovered a small peptide molecule consisting of just four amino acids, that restores insulin sensitivity in a rat model of Type 2 diabetes.

In rodents - including obese rats with human-like Type 2 diabetes ISF402 significantly reduces blood sugar, as re-sensitised muscle and liver cells take up insulin and store it as glycogen.

Dia-B is investigating a traditional treatment used by Pacific islanders to lower blood-glucose levels - an extract from the bark of a tree native to Tonga and many other islands. Like ISF402, it promotes cellular glucose uptake.

Zimmett said the the compound was originally identified by Professor Greg Collier, founder of Deakin University-based ChemGenex, which is developing diabetes and cancer drugs, but Collier felt it did not fit within the company's portfolio.

Another Dia-B project, led by Professor Mark Cooper at the Baker Medical Research Institute, is investigating a recently identified protein, CDA1, which is involved in the accumulation of collagen in tissues affected by the complications of diabetes, including the kidney, and cardiovascular system. A drug to suppress CDA1 could reduce the complications of diabetes.

Dia-B is also working on a monoclonal antibody to detect the presence in food of a toxic compound, bafilomycin, produced by common, soil-dwelling Streptomyces bacteria that infect root crops like carrots, turnips and sugarbeet.

Zimmet said food toxins are now suspected of causing a "fair percentage" of Type 1 diabetes in genetically susceptible humans, and bafilomycin a prime suspect.

Zimmet said an ELISA (Enzyme-Linked Immuno-Sorbent Assay) test for bafiloymycin was likely to be Dia-B's first commercial product.