This appeared in The Australian yesterday. Not a bad write up, but no mention of anx's hand, foot & mouth potential.
............. Anadis (ANX) 19c
CRITERION is happy to be a forum for contentious topics, but we're wary of weighing into the breast-versus-bottle debate for fear of a visit from the Nursing Mothers Association's "breast is better" vigilantes.
All we'll say is that the health benefits of colostrum - the milk fed to young mammals - have been known for eons. While plenty of biotechs have focused on producing synthetic antibodies, Anadis zeroed in on the natural germ-fighting properties of milk delivered to calves immediately after birth.
Unlike humans, calves are not born with antibodies and have to obtain them from the milk. Thus, the colostrum is packed with goodness, but only for the first feed, which is what Anadis harvests (don't worry, there's plenty left for the calf).
"We look at a cow as one big bio-reactor," says Anadis R&D chief Grant Rawlin. "We don't want umpteen thousand litres per day, we want the first milking once a year. On that basis we can harvest very efficiently in a way that suits farmers."
In one sense, an antibody is an antibody, but thanks to its bovine chums Anadis has perfected a way to produce them cheaply and rapidly. Natural antibodies are also polyclonal rather than monoclonal, which means they can adapt better to the germs' devious mutations.
"No one argues antibodies work, but the problem in the past has been the cost," Rawlin says. "One gram of pure polyclonal antibody could cost thousands of dollars, but for us it's a couple of bucks."
In another sense, Anadis possesses a potent weapon, but is in search of an application. In its early days Anadis focused on bringing Travelan, which prevents travellers' diarrhoea, to market. Travelan sales have been disappointing but the product provides useful cash flow for wider research on severe gastro disorders as well as an agent to provide front-line protection from bio-terror such as anthrax attacks.
Rawlin says an unintended effect of Travelan is that users report it alleviates symptoms of more severe gastro complaints. And last week, Anadis announced it was expanding an existing clinical trial program at Tel Aviv's Sourasky Medical Centre.
The target is inflammatory bowel disease such as Crohn's Disease and ulcerative colitis, which affects 4 million people. Melbourne's St Vincent's Hospital is undertaking similar trials.
In late May Anadis said it had squeezed a $480,000 grant from Canberra for Project Ectoplasm: its "revolutionary antibody-based method for biohazard detection, containment and decontamination".
Like all good (and, indeed bad) biotechs, Anadis has shifted attention from marketing to R&D. It's realised that it doesn't have the bulging wallet needed to market Travelan globally.
CEO Zeil Rosenberg says Anadis taps into the "tremendous resurgence" in antibody technology over the past five to 10 years. Despite this interest, few have thought of milk as a mainstream therapeutic agent.
Anadis generated $2 million of revenue in the half year to December 2006 and recorded a $1.2 million loss. At the time Anadis held only $1.1 million of cash, but the ongoing flows from Travelan and some contract manufacturing activities.
Rosenberg alludes to some "targeted fundraising". "We are not feeling a huge crunch for additional funds but there's some low-hanging fruit we would like to move faster on."
Criterion last visited Anadis in December 2005 and (ahem) rated the stock a SPECULATIVE BUY at 44c. We'll maintain our unrequited faith, although some argue the stock's already had ample time to prove itself.
Anadis is a difficult one to understand, but at least it enjoys some revenue flows and potential new flows from several strands of endeavour. And - holy cow! - they might even turn a profit one day.
