Progen appoints new CEO

Brisbane cancer drug developer Progen Industries (ASX:PGL) managing director Lewis Lee has resigned, and the company has named his replacement -- one-time Monsanto executive Justus Homburg.

"The board of Progen is confident that Justus can take Progen through its next stage of growth," said the company's chairman, Stephen Chang. "He is a proven senior executive, a strong strategic thinker with a solid commercial background in international pharmaceuticals."

Progen said Homburg had a reputation for driving business development in international markets, technology commercialisation, mergers and acquisitions, and financial transactions. His experience ranges from start-up organisations to 11 years in senior management at Chemical giant Monsanto. There, Homburg managed a number of core businesses and new technology development processes, including the creation and development of the Monsanto's pharmaceutical services division and health and wellness businesses. He managed the company's new life sciences technologies development platform that led to the rapid commercialisation of Celebrex.

Homburg moved to Australia three years ago to take the helm at Deakin University spin-off Chirogen.

"I started to work with Progen before Christmas and my family moved up [from Melbourne] in January," he said. "I have been in Australia over three years and we look at it as a permanent thing with no time limit.

"It is a very smooth transaction -- we have good continuity and I have been able to get to know all the Progen staff and projects very thoroughly. It is a really exciting company with a tremendous opportunity with PI -88 and its glycomics pipeline.

"There are five key things the company is working on -- PI-88 and PI-166, which are currently in development and the driving focus of commercialisation. We have enabling technologies, discovery which is unique and well developed patents and other core capabilities including glycomics, manufacturing biopharmaceuticals and managing clinical trials."

Homburg said he was drawn to Progen because of its position as one of the top 10 biopharma companies in Australia, with an established history. "It has very exciting technology, has a solid share price and has been there for the last 10 years," he said. "It has very exciting technology good prospects with oncology -- it is a very important area and we are trying to make difference."

It is widely speculated that Progen is on the verge of making a major licensing deal on PI-88. "I can't comment on those deals," Homburg said. "They are always confidential. We look at maximising the deal -- we will clearly tell the market when it is necessary."

Next phase

Progen is preparing for its next phase of development, focused taking its lead drug PI-88, an anti-cancer compound, towards market and positioning the company internationally as a leader in drug development. The latter is supported through the company's current drug portfolio and active drug discovery program. Lee will continue to provide support to the company in an advisory role. "Justus will be instrumental in implementing organisation change to increase the focus on drug discovery, progress the existing product portfolio including Progen's lead anti-angiogenesis drug PI-88, and identify creative opportunities to further strengthen Progen's pipeline," said Chang. "The board would like to thank Lewis for his leadership of the company over the last six years and his contribution to the scientific and commercial progress that has been achieved under his leadership. He leaves with our very best wishes for his future enterprises."

Asked about his management style, Homburg described himself as collaborative. "I have a background in international situations and always worked with people from different cultures," he said. "I have lost track of the considerable number of business ventures I have been involved with, M&A activities and alliances. I rely on other people in everything that I do."

'Right move'

Alison Coutts, executive director of investment bank EG Capital, said the new appointment was "the right move" for Progen. "It is time for the next stage," she said. "Without taking anything away from Lewis, he was very conservative and very careful not to over-promise.

"Progen is obviously close to a deal and Justus has lots of experience with big pharma and small biotechs -- he can talk the story at all levels, technologically and to the market. He comes across very strongly and his appointment will make difference to their partnering program and the financial markets will stay it is the positive."

Asked about Lee's future, Coutts said: "I think Lewis is always employable, his experience with Roche and building Progen plus his role on board of [unlisted Queensland firm] Xenome makes him useful to fledgling biotechs building critical mass."

In a note to the market, analysts Scott Power and Tanya Solomon at ABN-AMRO Morgans said they were not surprised by the announcement.

"The market should react favourably, giving Justus Homburg a brief 'honeymoon period' before looking for results, particularly with respect to a licensing deal for PGL's lead anti-cancer compound PI-88, something that the market has been anticipating for over 12 months now," they wrote.

"Justus has also been charged with the task of strengthening PGL's pipeline, a recurring theme among biotech companies of late, with Peptech making similar comments at its AGM last week."