Peplin bows to pressure, reinstates leukaemia program

Peplin (ASX:PEP) is set to raise AUD$4 million through the issue of 11.4 million ordinary shares at $0.35 per share to institutional and sophisticated investors.

Wilson HTM arranged the placement, which was well supported by existing shareholders. The shares were placed at a zero discount to the market, with $0.35 being Peplin's last closing share price on August 2.

The capital raising will be used to progress Peplin's leukaemia program, which had been put on hold until management and capital resources were available. The company plans to complete a preclinical program for PEP005 IV, its lead cancer compound in an intravenous formulation, file an Investigational New Drug (IND) application with the US Food and Drug Administration (FDA), and conduct a phase I/II clinical trial in leukaemia, for approximately $3 million.

"It's actually a fairly modest amount of capital that is required to put us back on track again," said Peplin's managing director and CEO Michael Aldridge.

Peplin expects to complete preclinical studies and the filing of an IND by the first quarter of 2006 and then commence the phase I/II clinical trial.

The company decided to reactivate its leukaemia program after research results were published in Blood, the journal of the American Society of Haematology, a review in New Scientist and coverage on the UK's Channel 4 News, said Aldridge.

"It was a culmination of all that which encouraged a lot of clinicians to call us, saying that they would like to see this product get into development, and our investors to call us saying they didn't like the idea of this product not being pushed aggressively," said Aldridge.

"Now we're a company with a skin cancer program and a leukemia program, two very different diseases with very different products," he said.

The company will also offer a share purchase plan to all Peplin shareholders who hold shares on August 10. Under the share purchase plan, shareholders will be able to purchase up to $5,000 worth of ordinary shares at the placement price of $0.35 per share without paying brokerage fees or transaction costs. This offer opens on August 15 and closes on August 26. Proceeds will be used by the company for general corporate purposes.

Peplin's other products

Peplin has completed treatment of all patients in its phase IIa clinical trial of topical application of PEP005 for actinic keratosis (pre-cancerous, dry, scaly areas of sun-damaged skin) with results expected by December 2005.

Enrolment of the two phase IIa clinical studies of PEP005 Topical for superficial and nodular forms of basal cell carcinoma is continuing and is planned to be completed by October. Peplin expects results in the first quarter of 2006.

Peplin also plans to initiate its US phase IIa dose escalation clinical trial for PEP005 Topical in August 2005. The company has retained US-based contract research organisation Omnicare Clinical Research to provide the clinical research services for this trial. Peplin will also use Omnicare for its Australian phase IIa clinical trials program. This was previously contracted with Cvitkovic & Associates SA, who will receive a share-based payment of 196,134 shares for the June 2005 quarter in August.