Prana CEO resigns, PBT-2 development to continue

Dr Jonas Alsenas has resigned as CEO and director of Melbourne based Prana Biotechnology (ASX:PBT; NASDAQ:PRAN), with Geoffrey Kempler re-assuming the joint positions of executive chairman and CEO.

Appointed in August 2004, Alsenas was CEO when Prana announced in April that it had halted a UK Phase II/III clinical trial for its lead compound clioquinol (PBT-1) after it discovered that manufacturing impurities could cause side-effects including mutagenicity and neurotoxicity.

Alsenas, who served as a director of Prana before taking on the role as CEO, has left "to pursue other opportunities", according to a statement put out by the company.

When asked about Alsenas' resignation, Kempler said: "people are going to have to draw their own conclusions."

Prana has also indicated that after a strategic review it is committed to the development of PBT-2 as its lead compound for the treatment of Alzheimer's disease.

"My focus as CEO is to drive this PBT-2 program which is currently in Phase 1 testing period," said Kempler.

Prana said in previous statement that as part of its effort to manufacture GMP-grade PBT-1, it had found unacceptably high levels of a toxic di-iodo form of PBT-1 occurring during synthesis.

"In our proper course of looking at the drug, and what would be involved in ramping it up in production, this di-iodo problem came up," said Kempler. "The market never valued the introduction of that possibility. But it certainly devalued us when that possibility went off the radar."

However, PBT-2 has successfully passed two in vivo mutagenicity tests and the company is confident that PBT-2 will not present the impurity problems that were found in PBT-1.

"Everything we did in our review was really satisfying ourselves that PBT-2 was not PBT-1 and that we're confident in continuing to make it the lead focus and where our energy and money is going," said Kempler.

In comparing PBT-1 with PBT-2, Kempler said that Prana owns PBT-2 and the company will therefore receive benefits solely while the economic benefit of PBT-1 was shared.

Prana commenced a series of Phase I clinical trials on PBT-2 in March, with the dosing of its first subjects at a facility associated with Utrecht University Hospital in Utrecht, The Netherlands. The Phase I program, which will comprise a series of studies, is expected to continue well into 2006.