Peptech, Genera rumours premature

Reports of Peptech's (ASX:PTD) impending takeover of tiny DNA-analysis company Genera Biosystems are premature, according the heads of both companies.

"I think they're a bit ahead of themselves," said Peptech's executive chairman, Mel Bridges, of a newspaper report today. "Yes, we are interested in having a look at Genera, but it is extremely early stage, and there in nothing concrete at all. A bid or anything along those lines is way ahead of the game."

With cash reserves at the end of March of around AUD$39.9 million, and an appetite for late-stage products, Peptech has been a keen participant in the partnering game this year, although its efforts have not been 100 per cent successful. It struck a joint venture agreement with University of Sydney spin-off Biosceptre International, but in June, Peptech's proposed $400 million merger with Brisbane company Agenix (ASX:AGX) was called off.

Melbourne-based Genera is an unlisted company, set up in late 2001 to commercialise a platform genomics technology -- a kit to detect genetic mutations -- developed at the Walter and Eliza Hall Institute and the Australian Genome Research Facility. It currently has three employees. Genera CEO Dr Karl Poetter said the newspaper article was "a big surprise".

"We've talked to a number of different people," he said. "Peptech is a big company and they're interested in certain aspects of doing DNA analysis, and Genera Biosystems has a platform, so that's about the extent of the conversation."

He said the company's first product -- silica beads to which target DNA sequences are covalently bound -- is being used for customised genetic tests. The AmpaSand beads can be used to analyse single nucleotide polymorphisms (SNPs).

"It's geared for people who want a new test designed for their particular allele. We're very easy to customise -- the readout is on a standard flow cytometer and the reagents are fairly inexpensive," said Poetter. "We've also developed a test that Gribbles Pathology will probably put into practice, hopefully by early next year. It's for a variety of different human diagnostics. Long-range, we hope to be making diagnostic systems for animals as well as humans."

In a statement to the ASX this morning, Peptech emphasised that discussions with Genera have only recently been initiated and that the company had not been subjected to any detailed scrutiny by Peptech's management.

"[There has been] no proposal to the board," said Bridges. "Not even remotely close. We're scanning a number of companies and groups. It's technology we're after, not necessarily a company, so we are considering licences and joint ventures.

"We're looking at technology that is quite advanced and if there are products that are coming to the market. Part of Peptech's growth strategy is filling out a product pipeline, over the next 1-2 years. We're looking for high-growth potential globally."