successful trial results for world-first obesity d, page-28

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Street Talk
Author: Edited by Anthony Hughes
Date: 14/12/2004
Words: 1889
Source: AFR
Publication: Australian Financial Review
Section: Market Wrap
Page: 16


Traders' pulses race over Metabolic
A breakthrough worth billions of dollars or a statistical blip of relative insignificance? That was the question analysts, investors and day-traders were asking themselves when Metabolic Pharmaceuticals released the results of its highly anticipated phase 2b trial for its "fat pill" yesterday.

What everyone did agree on, however, was that Metabolic's successful clearing of phase 2b trials for its obesity drug, AOD9604, was a big win for the Australian biotechnology industry, which was desperate for a new champion after the collapse of Biota's flu drug Relenza a few years ago.

The fact that Metabolic, which has a market capitalisation of $500 million, had maintained 100 per cent ownership of its technology to date is encouraging to other hopefuls.

The trial found that of 300 patients tested under a traditional double-blind test, those using the drug lost an average of 2.8 kilograms over a 12-week period, more than triple the weight lost by those on a placebo.

While it's true that when you weigh more than 120 kg, a Sunday night dinner is about 2.8 kg, weight loss was constant throughout the trial and there were no side effects.

This means, hypothetically, that if the trial had continued the patients could have continued to shed more weight. Also, it's worth remembering that a drug now being sold that causes the same amount of weight loss and can cause side effects last year raked in $US500 million in sales.

Investors sent Metabolic shares racing nearly 30 per cent to a high of $2.50 before cooler heads prevailed and the stock ended up 8 ? at $2.04. Circadian Technologies, which controls 21 per cent of Metabolic, closed up 26 ? at $2.43.

Now Metabolic must wait as men and women in white coats from the world's leading pharmaceutical companies study the results and decide if they want to enter a partnership