New-look Autogen touts Merck deal

Acting chairman Brett Heading introduced a "new" Autogen to friends and supporters of the company today at the launch of its new high-throughput genotyping facility at the Toorak campus of Deakin University in Melbourne.

"Autogen suffered quite significantly under its former administration, and had been distracted from its main aim of being one of Australia's leading biotech companies," said Heading, who has been chair of the company's board since the departure of former chairman and mining magnate Joseph Gutnick at the beginning of August.

"Since the Gutnick interests were acquired by Charter Pacific Corporation Limited, which is a well-known Australian investment company, there have been significant changes at all levels," he told the crowd gathered at the new facility.

Heading noted that among the changes were a change in management, including the appointment of chief scientist Greg Collier as managing director, and a significant reduction in management costs, allowing the company to focus on its core business.

"Autogen is going to be a biotech company that is run by biotech people who understand what needs to be done, and a board and management who are equally driven and excited about what is ahead of the company," Heading said.

The new facility, which has cost the company $1.6 million, will be operated in collaboration with the International Diabetes Institute. Victorian Innovation Minister John Brumby was on hand today to cut the ribbon.

Autogen also has laboratory facilities at Deakin University in Geelong as well as a Centre for Statistical Genomics at the Southwest Foundation for Biomedical Research in San Antonio, Texas.

According to Collier, the new facility will enhance Autogen's discovery capabilities and will also provide opportunities for expanding Autogen's business through increased collaborations with companies both in Australia and internationally.

The company has already used the new facility to examine the Beacon gene, which was discovered by the company a couple of years ago using its Israeli sand rat animal model. The expression of the gene is closely linked to obesity in the model.

High-throughput analysis of the human Beacon gene identified several single nucleotide polymorphisms (SNPs) in the gene and correlated them with a predisposition to obesity.

"What we came up with is that the variations in the gene are actually linked to obesity, they're linked to percent body fat, and they're also linked to the development of obesity and cardiovascular disease," explained Collier.

"What it shows is that the facility very rapidly took a gene from the early stages of discovery right through to validating it as a key potential therapeutic target."

Commercialisation deal

Collier also announced that the company had signed a major commercialisation and licensing deal with collaborator Merck-Sante for its other main diabetes-related gene, Tanis.

Under terms of the agreement, Merck will be responsible for development of Tanis as a therapeutic target for diabetes drugs and Autogen will receive both milestone payments and royalties of 5-7 per cent following commercialisation. He said the agreement would last until at least 2006.

Collier said that the company was looking for new pharmaceutical partners for its depression and anxiety gene discovery program.

Autogen is also changing its business model to better promote its gene discovery platform, according to Heading.

"In addition to the commercialisation of 41 genes discovered and protected by the company to date, we are increasing able to offer the services of our technology platform to other local and international groups looking for experienced gene derivation services," Heading said at the facility launch.

Autogen's share price (ASX: ATG) jumped with the announcements of the Merck-Sante deal and the new facility. At time of writing, the share price was 62 cents, up almost 20 per cent.