Peptech boosts Domantis investment

Sydney biotech company Peptech (ASX:PTD) is lifting its investment in leading UK domain antibody therapeutics developer Domantis by the equivalent of £6.2 million (AUD$15 million) this year to remain Domantis' major investor.

Domantis announced today that it has raised £17.5 (AUD$42.11 million) in one of Europe's largest Series B financing round in the past 12 months, led by the UK-based 3i Group.

The capital raising drew in several new investors including Gray Ghost of Baltimore, US, Albany Ventures, UK, and an anonymous US institutional investor.

Peptech is making its increased investment in two equal instalments of £3.1 million -- one to be paid immediately, the second later in the year.

Domantis developed Peptech's lead drug, a new domain antibody (dAB) molecule to treat rheumatoid arthritis and other immune-system disorders mediated by the inflammatory cell-signalling molecule TNF-1, including inflammatory bowel disease (Crohn's disease) and ankylosing spondylitis, a disorder that causes pathological curvature of the neck and spine.

The Domantis-developed dAB has also demonstrated its promise as a second-generation therapeutic in pre-clinical trials in an animal model of arthritis, according to Peptech's manager of investor relations, Dr Paul Schober.

Under an agreement signed when it acquired its original stake in Domantis, Peptech has options to develop two more dAB products for therapeutic targets of its own choice.

Peptech's executive chairman, Mel Bridges, said the results from the Domantis TNF-1 dAB project had been impressive. He said drugs for rheumatoid arthritis were one of the fastest growing areas of the pharmaceutical market, with conventional monoclonal (mAB) therapies now exceeding US$4 billion.

He said Peptech was ideally positioned to cash in on the lucrative biopharmaceutical market for a second-generation dAB therapeutic.

Domain antibodies -- effectively, cut-down versions of monoclonal antibodies -- have significant advantages over mABs, which currently account for about 25 per cent of all drugs in clinical development for a range of therapeutic applications, including cancer. Global sales of protein-based drugs already exceed US$15 billion annually.

"Domantis has an outstanding future, not just through our projects, but also through its other partnerships with other major pharmaceutical companies. We intend to maintain our share of that future," Bridges said.