chemgenex tip of the year

Great management and a nice pipeline

Chemgenex // cxs.ax

Marketcap: 94 mio$
Price:0,63$

www.chemgenex.com

Results put ChemGenex on radar
Kimina Lyall
December 11, 2006
GEELONG-BASED pharmaceutical company ChemGenex is now "on the radar" of big pharma and biotech firms hoping to form licensing or partnering deals with it after the company announced positive results of a combination trial of its major drug hope at the weekend.
The trial of 12 patients at the US's largest cancer hospital, in Texas, tested whether Ceflatonin was effective in treating chronic myeloid leukemia (CML) when combined with Gleevac, Novartis's breakthrough CML drug. Five of the 12 patients experienced a reduction of the leukemia cells in their blood, including two who achieved complete remission.

One of the patients now in remission -- and remaining so for about eight months since the trial -- had previously been in the "blast phase" of the disease, which meant he or she had had a life expectancy of only weeks.

The "back-up" trial for Ceflatonin did not affect the drug's main phase 2/3 trials next year, ChemGenex's vice-president of operations, John Campbell, said yesterday.

If those single-therapy trials were successful, the drug was expected to yield $100 million a year for the small Australian company, analysts have previously said. There are about 100,000 CML sufferers in the developed world.

Ceflatonin treats CML by destroying leukemia cells, unlike Gleevac and other similar drugs, which work to inhibit tyrosine kinase, a protein that causes CML.

Gleevac, costing about $US35,000 ($44,000) a year per patient, has earned Novartis $US2.3 billion in revenue in the past year. It was considered the great hope for CML sufferers when introduced in 2001. However, since then around 25 per cent of patients have shown resistance to the drug.

All of the 12 patients who were trialled with combined Gleevac and Ceflatonin had previously shown signs of resistance to Gleevac.

Last month, ChemGenex won approval from the US Food and Drug Administration for fast-tracking approval of Ceflatonin if it could be demonstrated to be effective with those patients with a particular form of resistance, known as T315I.

ChemGenex chief executive Greg Collier said yesterday that timing was the key to a potential partnership deal. "Everyone knows that big pharma and big biotech are always looking for compounds into 2008," he said, referring to the fact that many of the global companies were losing their most profitable drugs to patent expiries later this decade.

"So when you've got a compound that's going to be potentially approved in 2008 ... and the fact that we've managed to get this far all by ourselves and have all this inhouse and not licensed everything out, clearly puts us on the radar."

But he said ChemGenex's strategy had been to raise enough capital to keep control of Ceflatonin's development "so we didn't have to rush into any sort of deal structure ... so there's not going to be any deal imminent". Dr Collier spent the weekend in Orlando, Florida, presenting the research to the American Society of Hematology.