gday stan , This part on page 1 gives the answer -PYC’s business...

gday stan , This part on page 1 gives the answer -

PYC’s business model provides a level of predictability on cash flow. The Company is not
incurring the high costs for late stage drug development, clinical trials and regulatory
approvals. PYC is exclusively focused on early stage drug discovery which once validated
in pre-clinical studies is licensed to big Pharma in return for substantial upfront and
milestone payments and royalties on sales that follow. This is a proven business model.
Given the current scenario it is possible that Phylogica may in the course of the next two
years become a target for acquisition by a major biotechnology or pharmaceutical
company.

In-house Drug Discovery Pipeline
Phylogica’s drug discovery projects are focused on anti-inflammatory conditions. By
targeting a number of key points in the inflammation process, it is possible to develop
therapeutics against a wide range of diseases that share some common pathways. The
discovery pipeline already comprises three lead drug candidates (for stroke, burns and
cardiac ischaemia) and we expect that at least one of these, PYC36S for stroke, will be
out-licensed in 2007.

PYC36S (Stroke)
Stroke is one of the top three causes of death in Europe and the United States and its
incidence is expected to increase in the next ten years because of an ageing population.
Long term disability caused by stroke is a major economic burden on healthcare systems
costing around US$28 billion a year in the United States alone. For the vast majority of
victims there is not currently an effective treatment. The leading emergency stroke therapy
is tissue plasminogen activator (tPA) which costs in the region of US$2,000 per
administration and must be administered within three hours of symptom onset as beyond
that time, the drug is often ineffective or may even increase tissue damage; only about
three percent of stroke patients who could receive it actually manage to do so. Delays in
recognising stroke and getting to an emergency room cause many patients to arrive too
late for tPA. Hospitals' and doctors' ability to diagnose stroke quickly and willingness to
deliver the drug also gets in the way; tPA carries a risk of fatal bleeding if given to the
wrong patient. Additionally, tPA attempts to restore blood flow to the brain, however, there
is no suitable therapy to delay the death or degeneration of nerve cells that continues
even after the blood flow has been restored; this is the cause of most brain damage due to
stroke. Phylogica has discovered a number of Phylomer peptides that block a key
pathway associated with neurological damage and their blocking action continues long
after the blood flow has been restored after a stroke. Phylomer peptides are stable in
freshly drawn human plasma with 50% of the original peptide concentration measured
after 12 hours; this augurs well for their function as stroke therapeutics. Their stability has
also been assessed in an animal (rat) model and here half-lives of 35 to 100 minutes (the
time taken for the plasma concentration to halve) have been recorded, comparing
favourably with the half life of tissue plasminogen activator, which has an in vivo half life of
approximately six minutes in rabbit.

Their peptide pyc36s is for stroke, this is now/ nearly ready for a company to take it to the next stage. The company that takes pyc36s has to purchase it and pay royalties !!

Hope this healps..

This is my take on it but i am no expert..

Cheers
Ag