++++ news article today ++++++ Metabolic to add weight to...

++++ news article today ++++++ Metabolic to add weight to anti-obesity drug
By Rebecca Urban
March 8, 2005

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Metabolic CEO Roland Scollay, recently returned from a roadshow in the US, says more work needs to be done before the company can secure the best possible deal.
Photo: Nic Kocher
Metabolic Pharmaceutical's new chief executive Roland Scollay, recently returned from an investor roadshow in the US, is promoting his company's plans to a harsher critic - the Australian market.

Dr Scollay, previously a non-executive board member, has taken over the top job at a critical time for the drug development company.

Just three months ago, Metabolic shares were trading at $2.20 as the market speculated on the success of a 300-patient clinical study of a potential anti-obesity drug.

In November, the trial data was released. And while former chief executive Chris Belyea portrayed the result as positive, the market took a different view.

Analysts generally decried the lack of statistical significance of the data, and Metabolic shares were promptly dumped.

The stock shed 1 ¢ to close at 82 ¢ yesterday.

With Dr Scollay at the helm after Dr Belyea's resignation, Metabolic seems to be taking a more pragmatic approach to its development plans for the drug, code-named AOD9604.

Several months ago, the company tried to reverse some of the damage to its share price by boasting about unsolicited approaches from international pharmaceutical companies wanting to discuss potential commercial deals to develop the drug further.

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AdvertisementBut in an interview with The Age, Dr Scollay said that while he was talking to most of the top 10 global pharmaceutical players, more work needed to be done before the company could secure the best possible deal.

"It's almost certain that we could do some deal in the next three to six months - whether that's the deal we really want is not so certain," he said.

"I'm sure the Australian market would like us to do a pharma deal now.

"The US market says wait until you do the dosing study . . . And if it's successful it will add a lot of value to the drug."

The company's phase 2b trial was problematic in that while the drug produced an average weight loss of 2.8 kilograms over 12 weeks, the study failed to identify the optimum dose.

Metabolic seems to be taking a more pragmatic approach to its development plans for the drug.Dr Scollay said the company decided to start the dosing study before seeking a partner, and was finalising the trial protocol.

The study could incorporate up to 300 patients, and will probably be longer than the previous trial's 12 weeks.

The structure has drawn criticism from some analysts, who believe the dosing study is simply a guise for repeating the phase 2b study.

"From information out there, it looks like a phase 2 study," said David Blake, of Blake Industry & Market Analysis.

"This is part of the semantic battle Metabolic has been engaged in, that's done them the most damage."

The company has employed Neuren Pharmaceuticals to conduct a "mechanism of action" study, which it hopes will provide more information about how the drug, which is based on a human growth hormone, works.

The dose-finding study is expected to start in the third quarter of this calendar year.