Solid Progen looking to bolster pipeline

Brisbane cancer-drug developer Progen Industries (ASX:PGL, NASDAQ:PGLAF) has reported a reduced net loss of AUD$4.8 million for the year to June 30, down from $7.6 million in 2003, after increasing revenues by 8.6 per cent.

Progen’s MD Lewis Lee said the company had finished the financial year in a “solid cash position”, but the company’s growth would require continued, diligent application of capital.

The company had a cash/cash equivalent balance of $14.3 million, up from $12 million last year, after making a private share placement last November, and from the continuing exercise of shareholder and employee options as its shares performed strongly. Its cash-burn rate for the year was $5.3 million.

Lee said the sell-off of Progen’s life sciences division in November also contributed to its improved cash balance, as did an 8.6 per cent increase in revenue from its contract drug-manufacturing business. The rise would have been even better, but the company stepped up production of its lead cancer drug, PI-88 to meet demand as it continues to expand its clinical trials program.

The revenue increase also reflected an improved gross margin as a percentage of sales, from 15.4 per cent to 31.4 per cent, achieved through improved labour efficiency.

Lee said the PI-88 clinical development program had achieved several milestones during the year. Two Phase I and one Phase II trials had been completed, and three new Phase II trials have been initiated, involving 20 medical centres in three countries.

“Expectations are high, as we hone our focus on the recruitment into the PI-88 Phase II clinical program in parallel with a PI-88 partnership drive,” Lee said.

He said Progen is also actively screening for potential new in-licensing candidates to bolster its clinical pipeline, in tandem with its own drug-discovery program to develop new clinical candidates that would set the company up for new growth.