Peptech profit tips $29.5 million

Peptech (ASX: PTD) has posted a net profit of AUD$29.5 million for the six months ending on 31 March 2004, mostly due to a hefty one-off settlement payment with Abbott and the first in a series of annual payments made under the settlement agreement.

The company saw its revenues in the period increase to $45.5 million versus the $2.9 million recorded in the corresponding period last year.

According to the half year report, the company expects to finish the year with a net profit of $25-28 million. Peptech's cash reserves at the end of March stood at around $39.9 million. "Peptech is in the strongest financial position of its history,"said Peptech CEO Mel Bridges in the half-year report.

It's been a busy six months for Peptech. In early October the company was broadsided by claims from licensee Abbott that its product Humira did not infringe Peptech's anti-TNF antibody patents. While the dispute was settled amicably by the end of the year, it had a substantial impact on the company's share price, particularly as Peptech was also involved in arbitration with its other major licence-holder Centocor/Johnson & Johnson over royalties due for Centocor drug Remicade.

Peptech also entered into a joint venture agreement with University of Sydney spin-off Biosceptre International, which saw them invest $3.5 million into the cancer company, in return for a $3.5 million equity investment by Biosceptre into Peptech.

The company spent $7.6 million in a February capital raising to maintain its 36.1 per cent equity investment in UK antibody company Domantis.

Since the end of the half year in March, Peptech has also been involved merger discussions with Agenix, which broke down after Peptech was unable to supply details of the value of the royalty stream expected from Centocor.