Psiron chair spells out business plans

Psiron (ASX:PSX) has moved to reassure shareholders of its ability to fund its business plans, in the wake of last week's resignations of the company's CEO and CFO.

"We've changed out business plans substantially," said Psiron's executive chairman Stephen Jones, who took over day-to-day management of the company when CEO Julie Nutting resigned.

Nutting told Australian Biotechnology News last week that she had left Psiron on good terms, but said that she and Psiron's board had disagreed about the best way in which to develop the company's technology.

Psiron's board includes former pharma execs Wolf Hanisch and Dennis Feeney, and Adelaide virologist Darren Shafren, the inventor of Psiron's technology, as well as Bryan Dulhunty and Jones himself. Stephen Lambros will also arrive in Australia from North America this Wednesday to take up the position of chief medical officer.

"There was disagreement amongst the scientific members of the board, who are pretty august individuals," said Jones. "They all thought that the clinical trial design that was being proposed for the phase I study was not appropriate.

"The people on the board are all mature people and they all have points of view," Jones continued. "Facts have a way of finding their way to the surface at the end of the day, and facts are generally driven by logic. That's all that's happened in these circumstances.

"I take the view that a team approach and openness in management at all levels and the board is a prerequisite to a successful business."

Jones said that rather than hunting for a new CEO, Psiron would be considering the performance of four people in the "ranks" who have put themselves forward as possible candidates. "We'll assess the available people over the next six months, see how they perform and then make an appointment at that time," he said.

Cost reductions and funding

The new approach to Psiron's Cavatak clinical development program -- a melanoma therapy based on the company's patented Cocksackie A21 virus strain -- has resulted in a 50 per cent reduction of the costs previously planned for 2006, according to Jones.

"I think there was a lot of fat in the budget, which was able to be removed," said Jones. "We think we've got a compressed time frame, and thus a reduction in costs."

The Australian Technology Innovation Fund, of which Jones is chairman, has also made provision for Psiron to access a AUD$5 million convertible note facility. If shareholders approve the transaction and the facility is fully drawn, the money is expected to be sufficient to meet the company's cash needs through to early 2007.

Psiron made a loss of nearly AUD$5.9 million in 2004/05 and at the end of the second quarter of 2005/06 had just $966,000 in the bank.

"It's hoped that we will position ourselves by the end of 2006, based on hard results, to be attractive enough to partners who want to talk to us further. That's certainly our commercial objective," said Jones, who said the company had already made initial contact with possible partners in the United States and Europe.

Psiron is planning to lodge revised ethics documents for a phase I clinical trial in 12-15 patients with malignant melanoma to assess the assessed full therapeutic dose of Cavatak. "We are quite hopeful of seeing a clinical effect manifested in a substantial tumour reduction," as well as safety and efficacy, said Jones.

Jones also said that the company probably has sufficient Cavatak, and possibly Echo virus as well, to commence trials in ovarian and prostate cancer.

"We're also quite hopeful of concluding a development agreement, a collaboration with a very major cancer clinic in the United States who have approached us, in multiple myeloma," said Jones. "We're also looking at some work which would be funded in the States, by a group over there in certain brain cancers."

The company is also conducting a trial in three patients in Newcastle which it anticipates will finish in the near future. As well, the company is intending to out-license Sorafin, its drug for mild to moderate atopic dermatitis, in the USA shortly.

Psiron shares were steady at $0.16 at the time of writing.