Spirits up at Amrad despite revenue slide

A promising development pipeline is keeping spirits high at Amrad Corporation despite its posting a $54.6 million drop in revenues in the last half of 2001.

The revenue slide from $59.9 million to $5.3 million was pinned to the sale of its pharmaceutical business in October 2000 as part of the drug discovery company's efforts to scale back to its core business of research and development.

R&D expenditure for the six months to December 31 was $1.4 million lower than the previous corresponding period at $7 million, with cash reserves at $27.6 million compared with $32.6 million at June 30 2001.

Market analysts were unperturbed by the result, pointing to an acceptance that money needed to be spent on Amrad's research and clinical trials program, which included three drugs at the Phase 3 stage.

Intersuisse analyst Peter Russell said the market seemed to be more interested in Amrad's scientific developments than in its current financials.

"The important thing is to make sure they are not running out of money and that their expenses are not out of control," Russell said.

"They have had some changes in management and the company has been rejuvenated by its concentration on its core business."

Releasing the results, new managing director Dr Sandra Webb said an extensive review of the business had benchmarked Amrad against similar biotech companies in the US and Europe.

"The review confirms that for its size, Amrad has no parallel in Australia with its proven ability to design and conduct multinational clinical trials across and range of disease indications," Webb said in a February 15 statement.

"Amrad has an enviable pre-clinical and clinical development program, supported by a strong patent portfolio."

Phase 2 projects underway include clinical trials for:

• Emfilermin for peripheral nerve repair in cancer patients undergoing chemotherapy. Interim results are expected in March.
• A fractionated cone snail venom (AM336), which is injected into the spine of terminally ill cancer patients for the treatment of severe pain. Results are expected in the first quarter.
• A hepatitis B treatment (AM365), being tested on patients in Australia and South East Asia, to reduce the amount of virus in patients' blood. Results are due in the final quarter.