Suite 17, Level 9320 Adelaide StreetBrisbane QLD 4000Telephone...

Suite 17, Level 9
320 Adelaide Street
Brisbane QLD 4000
Telephone +617 3229 5755
Fax +617 3229 4655
Website www.bioprospect.com
Email: [email protected]
ACN 008 130 336
ABN 58 008 130 336
BIOPROSPECT TO COMPLETE STRATEGIC INVESTMENT IN
NOVEL APPROACH TO TYPE 2 DIABETES TREATMENT
The Board of BioProspect Limited (“BioProspect”) (ASX: BPO) is pleased to announce
the entry into an agreement to acquire a strategic investment in a US / Australian Drug
Discovery Company (“Astrum Therapeutics Pty Ltd” – Astrum) focused on Type II
Diabetes Mellitus (“T2DM”).
Preamble:
The most common form of diabetes is Type II diabetes or non insulin dependent diabetes
(T2DM). This disease affects beta-cells of the pancreas. T2DM commences with insulin
resistance, whereby the body’s cells fail to respond to insulin, which in turn diminishes
glucose transport into cells, leading to an increase in blood glucose levels. The beta-cells
of the pancreas compensate by increasing insulin secretion. Clinical diabetes then
emerges. It is treated initially with diet, weight loss and exercise, with often, the later
addition of drugs designed to promote further production of insulin by the body. In many
people with T2DM the beta-cells progressively die off due to the accumulation of a betacell
protein called Islet Amyloid Polypeptide (IAPP) which is toxic to beta-cells. Insulin
production then falls and insulin replacement is needed.
Highlights:
• Astrum has identified critical residues of a beta-cell protein called Islet
Amyloid Polypeptide (IAPP) that is toxic to beta-cells and clarified the
mechanism of IAPP mediated beta-cell toxicity. The active destruction of
beta-cells inevitably results in worsening of the diabetes and the shortening
of lifespan. Astrum has identified the crucial fragments of IAPP that can be
targeted with drugs designed to prevent IAPP mediated beta-cell toxicity and
aims to synthesise such drugs. Astrum’s science is considered to be unique
and novel in its approach to the treatment of T2DM as opposed to the current
oral drug and insulin replacement approaches.
• Strong intellectual property position with existing and pending patents
• Experienced scientific management team to focus on the commercialisation
path
• Positive synergies flowing from Astrum to BPO in boosting its scientific
capabilities, increasing its ability to access the USA biotechnology market
and further opportunities for Astrum to utilise BPO’s unique natural library
and screen a number of new and unique compounds for future research
• BPO acquires a 33.3% interest in Astrum for US$530,000 with a first right to
increase its interest by an additional 9%.
Astrum Therapeutics Company Background
Astrum scientists have identified the basic principles of building drugs that prevent the
destruction of beta-cells and critical fragments of IAPP that interact with such drugs.
Astrum has designed and plans to synthesize and test non-toxic compounds with the
premise of arresting the progressive decline in insulin secretory capacity that occurs
inexorably in established T2DM Such a compound would have major potential in the
firstline treatment of type 2 diabetes mellitus and preventing the major burden of its
complications.
Current main line drugs used in the treatment of diabetes replace insulin, promote
greater insulin release or improved glucose uptake and utilisation by alternate
mechanisms. Astrum have modelled small molecules which can allow delivery and
potency without toxicity. Currently available drugs for treatment of T2DM are largely
ineffective in controlling the symptoms of the disease and in delaying many of the direct
and indirect adverse health outcomes. No single drug prevents the death of beta-cells
associated with progression of the T2DM state. Astrum has designed drugs that are
expected to provide protection against the death of pancreatic beta-cells in T2DM.
Founded by Dr Alexander Zolotoy, Dr Eric Hayes, Mr Bob Besley and Dr Martin Soust,
Astrum’s business activities are focused on capitalising on its solid intellectual property
position through novel drugs that target T2DM and creating world-leading approaches for
the treatment of T2DM. The key Astrum personnel have experience in developing
effective non-toxic drugs for other conditions such as cardiac arrhythmias, and
reproductive disorders and inflammatory diseases.
Astrum is one of a few companies with a T2DM drug development approach that is
focused on preventing beta-cell death. The Astrum advantage is based on the ability to
produce small orally available molecules that are very potent and expected to be nontoxic.
Commercialisation Path
Key commercial milestones targeted by Astrum over the next 6 – 24 months are:
• Synthesize and test novel drugs that prevent the death of insulin secreting cells of
the pancreas (beta-cells);
• Finalise patents for drug combinations based on the Astrum platform that targets
the three major metabolic problems associated with T2DM;
• Continue research and development efforts focussing on novel target identification
and drug development for specific cardiovascular, inflammatory and neurological
complications of T2DM; and
• Commence commercial discussions with potential partners and initiate clinical trials
within 18 months.
T2DM Market
Approximately 177 million people suffer from T2DM and this number is projected to grow
to 370 million by 2030. The problem is fuelled by increasing affluence in developing
countries with increased sugar consumption, sedentary life styles and aging populations.
The overall cost of T2DM is approximately US$45 billion annually in the USA alone with
current treatments for T2DM generating sales of US$8 billion annually. Sales of antidiabetes
therapies are expected to reach US$20 billion by 2007.
The Astrum team
The key personnel involved with Astrum include:
• Dr Alexander Zolotoy - PhD in Physical Chemistry. Expertise in molecular design
including efficacy enhancement and toxicity reduction. Involved in 8 patents for the
pharmaceutical industry and including a $68m drug for Cardiome Pharma Corp.
Successful clinical trial for Immune Network Research Ltd.
• Dr Eric Hayes - PhD in Pharmacology. Expertise in target identification and model
development for drug discovery. Involved in 2 patents for
pharmaceutical/biotechnology companies and has strong contacts in the
pharmaceutical industry.
• In addition, Astrum has assembled a scientific advisory panel of well credentialed
scientists in the US focussed on T2DM, preclinical and early clinical drug
development, safety pharmacology and late stage clinical drug development.
Key BioProspect Synergies
• BPO’s vision has always been to further expand its activities into the human health
sector.
• BPO has always seen value in the diabetes market sector because of the aging
population and the eating behaviours of today’s society. It recognizes the
importance to human health in finding a cure.
• As set out above, BPO will boost its scientific capabilities, increase its ability to
access the USA biotechnology market and work with Astrum to utilise BPO’s
unique natural library and screen a number of new and unique compounds for
future research.
Placement and Deal Particulars
As part of the investment in Astrum, BioProspect is completing a placement to investors
on the following terms:
a) 21.8m Shares at 4 cents per Share to immediately raise approximately $870,000
with 21.8m free attaching options (existing listed class – 20 cents, 25 January 06)
to be issued subject to shareholder approval;
b) 10.75m Shares at 4 cents per Share to raise approximately $430,000 with 10.75m
free attaching options (existing listed class – 20 cents, 25 January 06) with the
Shares and options to be issued subject to shareholder approval; and
c) 2.2m Shares at a deemed issue price of 4 cents and 2.2m Options (existing listed
class) to be issued (subject to shareholder approval) to promoters of Astrum.
BioProspect will obtain a 33% interest in Astrum for US$530,000 and have a nominee on
the Board. BioProspect also has the right to participate pro rata in any subsequent capital
raising by Astrum. In addition it has a priority right over the next US$510,000 raised by
Astrum whereby BPO can acquire an additional 9% for US$430,000. If BioProspect
proceeds with its second investment (at its discretion) a further 2.8m Shares and 2.8m
Options will be issued to the Astrum promoters. Further, a final payment of 2m Shares
and 2m Options will be payable to the Astrum promoters in the event BioProspect
acquires 100% of Astrum or if Astrum is successfully listed on a recognised stock
exchange in Australia or the United States.
The requisite shareholders meeting will be convened shortly.
For further information contact: Selwyn Snell
Chief Executive Officer
+61 7 3229 5755