eastland news article - june 14

this article was found at biotechnologynews.net.

complete URL - http://www.biotechnologynews.net/StoryView.asp?StoryID=1136737


Eastland investment runs into trouble?

Amanda Ellis
Monday, 14 June 2010

MALARIA treatment developer Eastland Medical Systems says its latest Phase 3 program is on schedule, while investee Berlin Pharma has apparently begun insolvency proceedings in Germany.

On Friday, Eastland told the Australian Securities Exchange that Berlin chief executive Dr Roland K Wildner had informed the company he was forced to start insolvency proceedings.

Berlin holds manufacturing rights to Eastlands ArTiMist technology, which Eastlands UK consultant ProtoPharma is preparing to investigate with Phase 3 clinical trials.

Wildner took over from foundation CEO Ottmar W Geiger early in May after Geiger resigned due to urgent health reasons, the Frankfurt exchange-listed company announced on May 3.

While Eastland did not report Geigers departure or reveal when it was told of the alleged proceedings, it did disclose on Friday that it met with Berlin Pharma late last month.

In late May 2010, EMS representatives held meetings over two days in Berlin with Berlin Pharma in an effort to resolve commercial issues between the companies, Eastland said in its update.

The outcome of these meetings was positive.

BTN left messages for Eastland chief executive and company secretary Dermot P Patterson to clarify what those outcomes were and to ask after the companys Phase 3 research program and ProtoPharmas yet-to-be-reported data pack from a Phase 2a study reported late in April.

However, while Patterson was in the office on Friday, he did not return calls.

Berlin insolvency proceedings

After its meetings with Berlin, Eastland was told of Berlins insolvency proceedings.

Eastland has since been informed by Dr Roland K Wildner, CEO of Berlin Pharma, that, flowing from a complete review of the financial position of the company, he was forced to commence insolvency proceedings, Eastland said.

Berlin did not response to a BTN request to confirm this report on Friday.

Eastland told the market it had undertaken to assist Berlin where possible to resolve its current financial issues and was working closely with Wildner and Berlins supervisory board.

Eastland does not consider that these insolvency provisions will have any material adverse operational effect on Eastland, the ASX-listed company said.

The company said it may have to write off the balance of its investment in Berlin Pharma which, at December 31, was worth $1.113 million with amounts receivable of $57,000.

Perth-based Eastland does not anticipate manufacturing difficulty as it has a current agreement with ProtoPharma for UK manufacturing of ArTiMist.

Phase 3 research

Eastland recently drew criticism for its quiet decision to complete a Phase 2 study before moving on to Phase 3 clinical research.

Late in April, Patterson told BTN the company was now on a path to begin a 100-patient Phase 2b/3 study, expecting to fund that in part with the sale of a subsidiary that is currently on the market and has a number of interested parties.

In its Friday announcement, Eastland did not update the market on the West Coast Surgical and Medical Supplies sell-off, but said its confirmatory trial was on schedule.

Presumably it was talking about its Phase 3 research, however later in the update it referred to multiple Phase 3 trials which would get underway later this year.

Patterson could not be reached for clarification.

Price moves

Eastland shares closed 2.13% down to 4.8c on Friday.