A tiny piece of Geelong on the Nasdaq [June 27, 2005]

Posted by rob on June 27, 2005 under Uncategorized | Be the First to Comment

David Nason

June 27, 2005

THE battling Victorian coastal city of Geelong is best known for the collapse of the Pyramid Building Society and for the mercurial footballer Gary Ablett.

But now a little biotech company with big dreams is set to give this oft-maligned community a morale boost when it this week becomes just the 12th Australian company to list on the Nasdaq.

ChemGenex Pharmaceuticals, a company based at the Geelong campus of Deakin University, is working on the development of new drugs to treat cancer, diabetes, obesity and depression.

It will list on the Nasdaq tomorrow night, a move designed to maximise the investment potential of the company, which was formed last year when Deakin’s AGT Biosciences merged with San Francisco-based ChemGenex Therapeutics.

ChemGenex will join a mixed bunch of Nasdaq-listed Australian companies. The roll call includes big players such as condom and glove maker Ansell, paper and packaging group Amcor and petroleum company Santos, along with ambitious smaller biotech companies such as the nanotechnology-focused Psivida, which earlier this year was the last Aussie to list.

Shares in ChemGenex have been rising steadily since managing director Greg Collier this year announced that the company’s anti-cancer drug, Ceflatonin, was entering phase-two human trials at the Anderson Cancer Centre in Texas.

The shares closed at 68c on Friday but expect them to go higher. The word on the street is that Dr Collier has another big announcement to coincide with the Nasdaq listing, one related to the company’s efforts to build a profile in Europe. If that announcement happens to have anything to do with Bill Gates, look out.

News last week that the Gates-funded Foundation for Innovative New Diagnostics was to collaborate with the Sydney-based biotech Proteome Systems to fast-track the development of a rapid antigen-based diagnostic test for TB sent the Australian company’s share price through the ceiling.

Proteome closed on Friday at 35c, up from 15c a week earlier, giving the struggling biotech sector a desperately needed dose of positive news. After a miserable 2004, biotech stocks have continued in the doldrums, with stocks down an average of more than 20 per cent in 2005.

On of the worst performers has been Prana Biotechnology, a company whose fortunes nose-dived when forced to abandon its clinical trial of an Alzheimer’s drug because of its toxic side effects.

Prana listed on the Nasdaq in 2002, which proves that heading to the US is no guarantee of success.

But for ChemGenex and Ceflatonin the prospects appear bright. Ceflatonin is a drug intended for the estimated 50 per cent of patients who develop a resistance to Gleevec, the most effective drug available to treat the blood cancer chronic myelogenous leukemia in its advanced stages.

Last year Gleevec, which costs US patients about $US2500 ($3248) a month, reportedly earned its owner, Novatis, $US1.6 billion from worldwide sales.

ChemGenex, however, is not putting all its eggs in one gilt-edged basket. It has also discovered and patented a number of genes related to depression, type-2 diabetes and obesity and has products being worked up for trial.

It also has another oncology drug, Quinamed, in stage-two trials for the treatment of solid tumour prostate, ovarian, breast and colon cancers.

Investors generally show most interest in companies that have more than one product in clinical trials.

The Australian: A tiny piece of Geelong on the Nasdaq [June 27, 2005]