bit up from 9 to 17 cent

What Avexa`s CFO says about Biotron :

Dear James

There are a number of companies that we keep an eye on both domestically and internationally that may be operating in similar fields and which may have synergistic opportunities for us in the event of a merger or takeover. Biotron is clearly operating in the HCV and HIV fields in which we have extensive expertise and is a company whose progress we are monitoring.

Thankyou for your observation.

Regards

Alan Boyd
CFO

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Biotron Limited
Marketcap: 15 million $
Price: 0,14 $

http://www.biotron.com.au/

Final Report for the year
ended 30 June 2008.

The last 12 months have seen significant advances on clinical progression of Biotron Limited’s ('Biotron'
or the 'Company') antiviral drug development program, with a major focus on developing new drugs for
treatment of HIV and Hepatitis C virus (HCV). The Company has made excellent progress during this
time with its clinical HCV and HIV programs – these are truly world-class, with a new first-in class drug,
BIT225, in development for treatment of both HIV and HCV infections. BIT225 offers the potential to
significantly advance treatments of both these debilitating infections.
Significant events achieved during the past year include:
• Successful completion of Phase I clinical trial of the Company’s lead antiviral drug BIT225. This
was the first trial of BIT225 in humans.
• Receipt of a competitive Commercial Ready Grant from the Australian Federal Government for
aspects of development of BIT225.
• Demonstration that BIT225 is highly synergistic with existing treatments for HCV, which
significantly strengthens and advances the Company’s HCV development program.
• Demonstration of activity of Biotron compounds against Hepatitis B virus.
• Presentation of Phase I data on BIT225 at an international HCV meeting in Hawaii, USA in
December 2007.
• Presentation of other data from the Company’s HIV and HCV programs at several international
scientific conferences.
• Presentation of Biotron programs at international partnering conferences including BIO2008 in
San Diego and the Fifth Anti-Infectives Partnering & Deal Making Summit, held in Philadelphia,
USA.
• Initiation and successful completion of an underwritten Share Purchase Plan, raising $2.5 million
for further clinical development of BIT225.
Since the end of the financial year under review, Biotron has progressed to the next stage of clinical
development of BIT225 with the initiation of a Phase Ib/IIa clinical trial of BIT225 in HCV-infected patients
at two trial sites. Commencement of this trial is a major milestone for the Company.

Clinical Development of BIT225
BIT225 is an investigational, orally-administered, novel antiviral compound in development by Biotron for
treatment of HIV and HCV infections. The successful completion of the first human trial of BIT225 during
the second half of 2007 was a major value adding milestone for Biotron. This trial followed on from the
completion of a comprehensive program of preclinical safety studies, and demonstrated the safety of the
drug in humans and its suitability for progression into trials in patient populations.

The data from this Phase I clinical trial indicated BIT225 was well tolerated, with no dose limiting
toxicities. Analysis of the data indicated that potentially therapeutic blood levels of BIT225 were
achieved, based on calculations extrapolated from preclinical in vitro antiviral efficacy studies. The data
from this Phase I trial is the first human clinical analysis of BIT225, and are important as they set the
stage for further studies of the drug in patient populations. The Phase I trial demonstrated that the
absorption, distribution, half-life and tolerability of BIT225 were acceptable, and that safety and
pharmacokinetic profiles of BIT225 supported ongoing clinical development.
The completed Phase I clinical trial in healthy volunteers will support trials of BIT225 in both HCV and HIV
patient populations, which significantly reduces the costs and timelines of Biotron's clinical development
programs.
The first half of 2008 has been spent in extensive consultation with international and national clinical
advisors who have specific expertise in the design of trials of new drugs in patients. As BIT225 is a new
class of drug with a new mode of action, it is critical that the next series of trials are designed correctly to
ensure that the required outcomes can be achieved. The data from these trials will be used to support
ongoing development of BIT225 and, critically, will be the major item that maximises their value to a
potential commercial partner. Correctly designed and implemented trials will benefit shareholders as
returns to the Company from a commercial deal will be maximised.
The other key reason for ensuring the trials are correctly designed is to maximise patient recruitability.
Defining inclusion and exclusion criteria for trial participants – such as stage of disease, past treatments,
current co-treatment, unrelated diseases, age and gender – determine how quickly a trial can recruit
sufficient patients and be completed. Rushing into poorly designed trials may result in slow recruitment
and significantly prolonged outcomes.
Since the end of the financial year, Biotron has commenced a Phase Ib/IIa trial of BIT225 in HCV-infected
patients, after receipt of the necessary ethics and regulatory approvals. The commencement of this trial
marks another major milestone for the Company. The trial, code named BIT225-003, will run over two
sites during the second half of 2008. The trial is a placebo controlled, randomised study of the safety,
pharmacokinetics and antiviral activity of BIT225 in patients with HCV infection. The primary objective is
to assess the safety and tolerability of BIT225, given twice daily, for 14 consecutive days. The secondary
objectives are to assess the pharmacokinetics of BIT225 as well as to assess the antiviral efficacy of
BIT225 in these patients. Eighteen patients will be randomly assigned to receive one of two dose levels
of BIT225 or placebo. The use of two trial sites, based in Sydney and Brisbane, is aimed at maximising
the recruitment rate for the trial.
BIT225 represents a first-in-class drug for treatment of HCV, targeting the p7 protein of HCV. It is
estimated that in the USA alone, some 4 million people have been infected with HCV with 2.7 million
suffering from chronic infection. Worldwide, 170 million people are infected. HCV causes inflammation of
the liver, which may lead to fibrosis and cirrhosis, liver cancer and, ultimately, liver failure. Existing drugs
for HCV have limited effectiveness and toxicity issues, leaving a significant need for new therapies. The
worldwide market is currently almost US$3.0 billion, but is estimated that this market will expand to over
US$10.0 billion as safe, effective therapies enter the market.
During the past 12 months independent research in the USA demonstrated that BIT225 significantly
enhances the activity of existing HCV therapies in an in vitro model system. The results of this research,
performed by Southern Research Institute in Maryland, USA, are significant as they indicate that BIT225
has the potential to be used in combination therapy to achieve a higher level of antiviral activity against
HCV than is currently possible, while improving the potency of each of the drugs in the combination. The
results demonstrated that BIT225 was highly synergistic in a triple combination with two of the most
common HCV therapies in use today, ribavirin and interferon-α. The addition of BIT225 to ribavirin and
interferon-α increased the level of inhibition of viral replication from 70% with the two other drugs to 100%
when BIT225 was added to the mix. The potency of BIT225 was increased tenfold in this triple
combination, compared to its activity on its own. The studies were conducted in vitro against the widely
accepted surrogate model of the HCV, bovine viral diarrhea virus (BVDV). BVDV is closely related to
HCV and is an in vitro predictor of the efficacy of anti-HCV drugs in humans. Previously, Biotron reported
that BIT225 is a potent inhibitor of activity in this HCV surrogate model system.
Biotron has filed a new patent to extend the current protection over its lead antiviral drug BIT225 and
analogues. This latest patent filing further strengthens Biotron's extensive intellectual property portfolio in
the antiviral drug development field.
BIT225 also represents a novel, first in class approach to the treatment of HIV. BIT225 specifically
targets HIV in reservoir cells and represents an opportunity to attack HIV at its source in the body.
Current HIV therapies have little or no effect on HIV in the underlying reservoir of infected cells where the
virus hides from the immune system. The market for HIV is very large, with the USA market alone for HIV
worth over US$3.3 billion per annum. Biotron is currently finalising protocols and other documentation
through the necessary ethics and regulatory processes, with the aim of progressing BIT225 into a Phase
Ib/IIa trial in HIV-positive patients.
These trials in HIV and HCV patients are critical steps in the Company's development. Demonstration
that BIT225 can attack these viruses in patients will be a truly major advance in terms of Company and
technology valuations. The Company is focused on achieving a successful outcome, and has been
holding discussions with potential pharmaceutical companies in anticipation of finalising a deal once
these trials have been completed. The proposed trials are designed to benefit shareholders through
significantly increasing the value of Biotron in the market and to its future pharmaceutical company
partners.
Biotron continues to leverage shareholder funds by accessing non-equity funding to support its
development programs. In the second half of 2007, the Company received a grant of $465,000 from the
Federal Government's Commercial Ready Grant program. The grant is a partial reimbursement of
expenditures incurred in the Phase I clinical development and testing of BIT225. This latest grant is in
addition to the previous grants, including a Biotechnology Innovation Fund Grant which assisted with
early stage development of new drugs for various targeted viruses, and a Start Grant which facilitated the
selection and preclinical testing of BIT225.
In December 2007 Biotron initiated and subsequently completed a Share Purchase Plan (SPP) to raise
additional capital for clinical development of its antiviral programs. The issue of 14,700,000 shares to
raise $2.5 million was fully underwritten and the funds raised by the SPP are being used to support the
Company's ongoing operational costs, including funding the BIT225 Phase Ib/IIa clinical trials in infected
patients.
The Director’s would like to thank all those shareholders who supported the Company by participating in
this capital raising.
Other Viral Programs
In addition to excellent progress with the Company’s anti-HIV and anti-HCV development programs,
Biotron further advanced its antiviral platform with the finding that several of its proprietary compounds
have shown potent activity against the Hepatitis B virus (HBV).
According to the World Health Organisation, 350 to 400 million people are chronically infected with HBV.
Chronic Hepatitis B (CHB) is a serious global health problem, with infection progressing to liver cirrhosis
and hepatocellular carcinoma, resulting in up to 1.2 million deaths worldwide each year. Up to 80% of the
world's primary liver cancer, which is currently the fifth most frequent cancer worldwide, is attributable to
CHB.
This latest activity data against HBV demonstrates the depth of Biotron's antiviral portfolio. The Company
has an impressive portfolio of clinical and preclinical antiviral programs developing drugs targeting HCV,
HIV, Dengue virus and Influenza virus. At present, focus is on development of the HCV and HIV
programs into trials in infected patient populations, and additional resources will be committed to these
additional programs once these more advanced programs have been successfully commercialised.
During the year, ongoing discussions were held with potential partners regarding the Virion technology.
Whilst keen to secure a partner to take the Company’s compounds through into clinical development,
Biotron can significantly increase the value of the technology by undertaking the proposed Phase Ib/IIa
clinical trials before forming an alliance. This will translate into much higher returns to the Company in the
form of upfront payments as well as increased milestone and royalty payments in the future.
The level of interest by the international community in Biotron’s antiviral programs was reflected by the
selection of Biotron to participate in several prestigious international scientific conferences during the
year. In July 2007 Biotron was selected to give two presentations at the International AIDS Society
conference in Sydney, NSW, and in December 2007 Biotron scientists were selected to present data at
an HCV conference and at an HIV conference in Hawaii, USA. Presentation at these meetings provided
an excellent opportunity to further discussions of the Company’s technologies with potential
pharmaceutical partners. In addition to these scientific meetings, Biotron participated in international
partnering forums including the Fifth Anti-Infectives Partnering & Deal Making Summit, held in
Philadelphia, USA and the annual biotechnology partnering conference BIO2008 in San Diego, USA.
These forums provide an excellent opportunity to showcase Biotron’s antiviral drug programs to an
international audience and to hold meetings with business executives and potential partners from USA
and European biotechnology and pharmaceutical companies.
Patent Update
Biotron is focused on progressing patents related to its antiviral programs through the international
patenting process. The Company recognises that the key to establishment of partnerships is the
expansion and continued strengthening of Biotron’s intellectual property (IP) portfolio. Strong, defensible,
international patents are essential to attract partners and to ensure a competitive advantage for the
Company’s products in the marketplace. Biotron continues to build a strong wall of patents around its IP
to maximise the value of the technologies and to ensure its competitive position.
As discussed above, during the past year Biotron has filed an additional patent to extend the current
protection over its lead antiviral drug BIT225 and analogues. This latest patent filing further strengthens
Biotron's extensive intellectual property portfolio in the antiviral drug development field. In addition,
Biotron has progressed existing patents through the international PCT system into national jurisdictions.

A summary of Biotron’s patent portfolio is set out below:
TITLE STATUS
WO0021538
Method of modulating ion channel
functional activity.
Granted in Australia, New Zealand and China.
Under examination elsewhere.
WO9813514
Method of determining ion channel
activity of a substance.
Granted in Australia and USA.
Under examination elsewhere.
WO04112687
Antiviral compounds and methods.
Entered into national phase.
WO6135978
Antiviral compounds and methods.
Entered into national phase.
Recent PCT filing
Hepatitis C antiviral compositions and
methods
PCT filed in August 2008.

On behalf of the Board we would like to thank the dedicated Biotron staff for their commitment and efforts
during the year. Biotron is poised to achieve the outcome that we have all been working towards –
demonstration that its antiviral drug development program can produce new, novel drugs which can
attack virus infections in humans, resulting in significant clinical benefit to patients, and generating major
financial benefits to our shareholders. We look forward to the next year with confidence.