Peptech execs talk up pipeline

Peptech chairman Mel Bridges today told shareholders that the company's best strategy for building value was to develop its product pipeline.

At Peptech's AGM in Sydney, Bridges admitted that the company's share price "is out of kilter and disappointing, but that the company has the building blocks to take it to the next level and shareholders will notice as it accelerates growth."

Bridges welcomed Peptech's new CEO Dr John Chiplin, and said he had strong international business credentials.

Meanwhile, Chiplin said he saw in Peptech "a diamond in the rough", and explained that he was drawn to the company by five of its key assets.

Two of those assets, he said, were in the form of franchises being built in rheumatoid arthritis (with UK-based Domantis) and cancer (with Sydney-based Biosceptre), and the remaining three are cash assets -- Peptech's licence deals with Johnson & Johnson and Abbott Laboratories, its 34 per cent shareholding in Domantis, and the fertility drugs in the Peptech Animal Health division.

"Domantis is a rising star -- if and when they go public, our shareholding is a very valuable asset," said Chiplin.

In December, Bristol-Myers Squibb agreed to guarantee payments to Domantis of US$9.2 million over three years, and Danish-based pharma Novo Nordisk invested US$8 million in Domantis as part of a US$29 million capital raising.

"Shareholders should be excited about Domantis," agreed Bridges, "We are starting to see international endorsement and it is only scratching the surface -- and will continue to see further licensing. It has really cemented itself on a clear projection to Nasdaq listing and continued progression."

Milestones

Domantis CEO Bob Connelly, who also attended the AGM, said Domantis had "met or exceeded" each of its milestones, and had added management and raised US$29 million in "a very difficult market".

"The new fiscal year is expected to be a breakout year, with [Domantis'] first IND submission to be filed in the US with the FDA," Connelly said. "We hope to be in position to file two to three INDs per year.

"We will also investigate domain antibodies (dAbs) in cancer and plan to form additional and larger partnerships. The cash for deals will increase and we hope to successfully list on the Nasdaq in one to two years -- we plan to be IPO-ready, so that when the market is ready we are ready to jump.

"Domantis has raised more than $83 million since 2000. Peptech has been involved in all three tranches and right now Domantis is one of the most valuable private biotech companies -- it has the investment and key drivers."

Arthritis market

Chiplin said Peptech hoped to capture a significant share of the US$10.3 billion per year rheumatoid arthritis market with two products: PN0621, the domain antibody supplied by Domanitis, and PN0615, the monoclonal antibody developed at Peptech's Sydney reaserch facility.

"Antibodies are hot property -- all big pharma want them and we are in a good position to capitalise," he said. "Our TNF [tumour necrosis factor] anti-inflammatory products have never been at a better stage. We now have the ability to manufacturing facilities to produce world-class, large-scale quantities, and we are well primed with drug candidates.

"Peptech is in a very healthy cash position and remains in a strong position with $43 million. We have closed the share buy-back, and the funds will help us to secure a product pipeline and support investment in Domantis," added Chiplin. "PN0621, will go to phase I clinical trials in early 2007 with PN0615 to follow about a year later."

Chiplin said Peptech also hoped to claim a significant share of the fast growing theranostic market -- for drugs that both diagnose and treat cancer.

He said Peptech's cancer product pipeline looked very exciting, with five products now in preclinical development, while its animal fertility drug Suprelorin has been lodged for registration in Europe and in the US with the FDA.

Chiplin said that following the JP Morgan Conference held in the US earlier this year, he came to the conclusion that Biologicals, large molecules of which antibodies are included, had a big future.

He said pharmaceutical companies, which until now had concentrated on small molecules, were now focusing on this market because of its rapid growth and multi-billion dollar sales potential for biological based drugs.

Bridges defends role

Mel Bridges was re-elected to the board, and the AGM recognised his leadership of the company through a difficult period of litigation.

One shareholder, referring to Peptech's stagnant share price, said Peptech's board should be more accountable. Bridges said that when he took on Peptech the company was "fully obliterated", with no R&D pipeline. Today's company, he said, was a "new Peptech", but he admitted that the market had not yet taken notice.