New biotech Bone revs up in Perth

A new biotechnology company sprang into being yesterday -- seemingly fully-formed -- when Perth-based Revenir (ASX:REV), formerly a property management company, announced plans to merge with private British biopharmaceutical company Bone Limited.

Under the terms of the share sale deed, Revenir will undertake a one-for-four consolidation of capital. It will then issue 34 million shares to Bone vendors in payment for 80 per cent of the British companies' ordinary shares and all of its preference shares.

Revenir will also lodge a prospectus with ASCI on June 21 to raise at least AUD$1.5 million in new capital through the issue of 2.5 million 60 cent shares. There will be capacity for an additional $1 million in oversubscriptions.

Bone's chief operating officer, John Fitzgerald, said $2.3 million was also available in the Revenir shell, including $900,000 outstanding from another raising.

"Our concept is you go to the market and ask for what you need," said Fitzgerald. "We believe then that we can take the money and significantly move the company forward and perhaps on the back of that look for a further raising."

Fitzgerald said Bone was incorporated in 2002, taking over work which had been underway at Bone's major shareholder, fellow UK biotech Proxima Concepts. An Australian listing was seen as advantageous alternative to a UK listing because of the "quality research, infrastructure, and cost-effectiveness" said Fitzgerald.

"We were looking for the opportunity to move into a public vehicle so that [our research] could achieve its full potential," he said. "If you were to do similar work in the UK you'd be substituting a pound sign for a dollar sign. And the new European rules [for clinical trials] are an enormous cost burden for a young company.

"The European IPO window has been fairly shaky and is probably 6-12 months behind Australia and the United States."

Bone has a portfolio of drugs for osteoporosis and rheumatoid and osteo-arthritis, mostly in pre-clinical or drug-discovery phase.

Its most advanced candidate is oral calcitonin drug BN002. Calcitonin is a hormone which has been used as an injectable or intra-nasally for 25 years to treat Paget's disease, hypercalcaemia and osteoporosis.

So far, primate studies have shown that BN002 can be delivered orally into the bloodstream, and a bridging Phase I/IIa study is underway in Britain, with results expected mid-year. Bone will apply for bio-equivalence registration of BN002, and expects a quick path to market.

Fitzgerald said Bone's calcitonin formulation increased the delivery of the drug across the gut. "The level of drug required will also be significantly less -- up to a half."

He said there were two other orally available calcitonin candidates in development -- a Phase I therapy in development at San Diego-based Novex and another by New York's Emisphere, in collaboration with Novartis.

Bone's oral parathyroid hormone (PTH), BN003 uses the same platform technology. Injectable PTH is currently used to maintain normal calcium levels -- mobilising calcium from the bone, enhancing its absorption in the small intestine, and stimulating its re-absorption in the kidneys.

Two pre-clinical studies have shown that BN003 can be delivered orally into the bloodstreams of animals, resulting in increased calcium levels. A toxicology study is scheduled to take place in Australia.

The company's second platform technology is the mosaic drug discovery system -- which has been used to derive Bone's anti-TNF drug candidate. Unlike current anti-TNF blockbusters, monoclonal antibodies Humira and Remicade, BN006 is a short chain peptide, able to be delivered orally.

Two bone cell regulators, BN005 and BN008, have been developed using the mosaic system.

Secondary pre-clinical work for the company's joint protection and collagen tolerance candidate BN007 is due to commence in 2004.

Bone also holds three exclusive licences from the subsidiaries of Proxima Concepts. These licences cover applications in the field of osteoporosis, arthritis, cartilage replacement and collagen tolerance.

"I think what you'll see is the initial projects will be partnered early to bring in cash and build the dream," said Fitzgerald.

Shareholder approval for the appointment to the Revenir board of current Bone CEO Dr James Neil Phillips, as well as Chris Bilkey and Glen Travers, will also be sought at the general meeting.

In addition, shareholders will be asked to approve a change of name to Bone Medical. Bone Limited will then become a subsidiary of the listed entity.