AGENIX LIMITED 2002-05-14 ASX-SIGNAL-G -------------------------------------------------------------------- HOMEX - Brisbane -------------------------------------------------------------------- +++++++++++++++++++++++++ Agenix is a now a constantly evolving company as we move to become a more customer and market driven organisation. -------------------------------------------------------------------- Our goal is to continue to provide products which improve people's lives, whether through the use of Milton Pharmaceutical products for babies or the AGEN Biomedical D-dimer test for patients with suspected blood clots. -------------------------------------------------------------------- For Agenix to continue to grow we must keep supplying products that are needed by our customers and which represent value for money. In many cases we will be able to charge more than our competitors, however we will provide superior performance and better value to customers. To take us further down this pathway we have made some structural changes by increasing the marketing functions of both Milton and AGEN to enable them to focus more on the customer and help us design better products. We are investing more into market research to better understand the customer and market, allowing us to present our products in their best position. -------------------------------------------------------------------- In order to carry out these plans, we will be increasing certain budgets. However we will continue to look for ways to do things more efficiently. As a result we do expect to increase our overall expenditure however we will continue to manage our business responsibly and invest wisely. -------------------------------------------------------------------- We are moving our major program, Thromboview(TM), from the Research and Development phase into the commercialisation phase. To achieve this, we are employing people with the necessary skills and drive to make this a world class product and one that provides the correct value equation for the health-care market. Concurrent with this is a move of the operations from its original beginnings at AGEN to under the direct guidance of Agenix. -------------------------------------------------------------------- FINANCIALS -------------------------------------------------------------------- Recently we released our half yearly financial results, that showed the business progressing well this year. -------------------------------------------------------------------- We achieved the following results; -------------------------------------------------------------------- 2001 (6 mths) 2000 (6 mths) % increase Group Sales $18.8 million $11 million 66% AGEN $9.5 million $6.1 million 55% Milton $9.0 million $5.0 million 80% Jemaka $0.3 million $0.2 million 52% Operating Profit$1.9 million $0.5 million 272% Tax $0.2 million $0.2 million - Net Profit $1.7 million $0.3 million 435% EBITDAR $3.7 million $2.3 million 59% EPS 1.1 cents 0.3 cents 270% -------------------------------------------------------------------- Our existing businesses of AGEN and Milton are proving to be strong performers in their respective markets and we are continuing to focus operations on their core strengths. -------------------------------------------------------------------- AGEN -------------------------------------------------------------------- AGEN has continued to grow this past six months in both Human and Veterinary Diagnostics. -------------------------------------------------------------------- In the Human diagnostics market we are building upon the strong D-dimer market presence we already have and are preparing to launch new versions of the product to serve higher volume automated instruments. We expect that the testing market for D-dimer will move in this direction over the coming years and we are positioning AGEN to take advantage of this move. D-dimer demand continues to grow through increased public and medical community awareness. In Australia, AGEN has taken back the distribution rights to its products allowing it to control both the growth and the margin. -------------------------------------------------------------------- Our Veterinary business has shown robust growth, despite the effects of September 11 on our largest market, the USA. Late last year we renegotiated our Distribution Agreement with Synbiotics Corporation in the USA to provide us with more certainty and revenue for the future. As a part ofthis new agreement, AGEN is now distributing products directly to Japan, rather than through the USA. This will enable AGEN to derive a greater margin for product sales. -------------------------------------------------------------------- We anticipate that AGEN will continue to provide solid growth in both revenue and profit in the upcoming year. -------------------------------------------------------------------- MILTON -------------------------------------------------------------------- The past six months have been an exciting time for Milton, as we launch new products and move into a new business sector - fast moving consumer goods (FMCG) with the Milton product line extensions. The two core franchises within the Milton company, the traditional over the counter (OTC) pharmaceutical business and the new Milton FMCG products business, have both contributed to the strong interim results. As in previous years, the OTC business is characterised by solid sales and earnings typical of this business sector. We continue to evaluate the performance that we see in this business and look for ways in which we can grow. -------------------------------------------------------------------- Both at the end of last year andin March this year we increased our management strength in Milton through the addition of two new staff. -------------------------------------------------------------------- In March Andrew Farrington joined Milton as the new General Manager. Andrew was previously the General Manager of ColorCorp's Branded Merchandise division. He began his career in FMCG with Unilever, one of the world's largest FMCG companies. During his ten years there, he progressed rapidly through the organisation, and since joining Milton has begun to make a positive difference to the company. Lachlan McKinnon joined Milton as Marketing Manager, bringing strong FMCG marketing skills, which he developed through his years at Kraft, Warner Lambert, and, more recently, Blackmores. -------------------------------------------------------------------- Milton's new product launches have been successful overall, with most of the products achieving solid market share positions in their first few months. Ongoing reviews of the performance of these products will ensure that we are offering products that are in alignment with the Milton heritage and have significant growth opportunities. -------------------------------------------------------------------- 2001/2002 is a year of brand development for Milton, and we will continue to invest in order to establish market share and brand awareness. As such, we expect it to continue to operate at a trading loss for this year. In the next financial year, we expect Milton to build from its current position and to operate profitably. -------------------------------------------------------------------- THROMBOVIEW (TM) -------------------------------------------------------------------- Clearly the greatest long-term opportunity for growth resides with this program. Agenix is committed to deliver this product in the shortest possible timeframe to assist in the diagnosis of Deep Vein Thrombosis (DVT) and Pulmonary Embolism (PE). Considerable progress has been made since my last newsletter and I would like to briefly touch on some of the most important points. -------------------------------------------------------------------- A recent addition to the Thromboview(TM) team is Helen Roberts, who takes up the position of Director of Marketing. Helen comes to us with more than 13 years' experience in pharmaceutical sales, marketing and product development in both large multinational companies such as Bayer and Merck Sharp and Dohme and small biotechnology companies such as Avax. With a strong background in sales and marketing, a degree in Medical Science and an MBA, Helen is well qualified to provide direction for the Thromboview(TM) commercialisation. Helen's experience will guide the team through the product development and trials needed to launch our initial sales of Thromboview(TM). -------------------------------------------------------------------- As previously announced, we have successfully manufactured the Thromboview(TM) antibody under Good Laboratory Practice (GLP) conditions. This proves that we can successfully manufacture commercial scale amounts of material in a controlled environment. The second production run of antibody is currently in progress. -------------------------------------------------------------------- The Thromboview(TM) program is in the process of moving from under the auspices of AGEN to Agenix. This change has been made for several strategically important reasons: -------------------------------------------------------------------- 1. AGEN will be able to focus on its core businesses of Human and Veterinary diagnostics and maximise its growth and profitability -------------------------------------------------------------------- 2. Thromboview(TM) will progress in developing its own culture and business practices. These are essential for its growth as a pharmaceutical-style company -------------------------------------------------------------------- 3. This structure will support new development programs. Programs to be evaluated in the coming year include Targeted Anticoagulant (TAC) and Medical DeviceAnti-clotting Treatments (MDAT) -------------------------------------------------------------------- Thromboview(TM) continues to progress well in preparation for Phase I clinical trials in November this year and we are confident that we will continue to reach our milestones and successfully launch this product on time. -------------------------------------------------------------------- WHAT NEW PROGRAMS ARE WE STARTING AND WHY ARE WE DOING THEM? -------------------------------------------------------------------- The new structure allows us to accelerate our Thromboview(TM) program and expand our activities to include the development of new blood clot treatments such as TAC and MDAT. -------------------------------------------------------------------- Agenix is committed to improving the diagnosis and treatment of blood clot related disorders. Two Research and Development programs which build on our unique humanised antibodies are currently under evaluation. Both will address significant markets if successful. -------------------------------------------------------------------- THE TAC PROGRAM -------------------------------------------------------------------- The TAC program is designed to look for new forms of treatment for existing blood clots. Currently blood clots are treated using a variety of therapeutic processes including surgery and pharmaceuticals. The use of surgery is generally limited to those blood clots which are too large to be treated with an anticoagulant drug and which, therefore, have to be removed using alternative means. Options include open surgery or the use of catheters to remove the clot. --------------------------------------------------------------------Pharmaceuticals can be given intravenously, subcutaneously or orally. However, as with the use of most drugs, there are important considerations prior to commencing therapy including side-effects and contraindications. The TAC program will investigate the ability of humanised antibodies to deliver a therapeutic dose of anticoagulant directly to the clot. This significantly reduces the amount of drug circulating throughout the remainder of the body and therefore reduces side effects. This approach has been used successfully in other diseases and has enormous potential to provide a suitable therapeutic response while reducing or eliminating side-effects and contraindications. Laboratory experiments have shown that when a heparin molecule is attached to the humanised antibody and this new compound is added to a clot, the process of clot formation is slowed or stopped. -------------------------------------------------------------------- There are many possible drug candidates which could be used with the humanised antibody, including heparins, warfarin, streptokinases and staphylokinases. These drugs have different modes of action and effectiveness and Agenix will examine and compare their actions when attached to the humanised antibody. From these studies we will be able to determine the correct candidates for the intended use. -------------------------------------------------------------------- As a follow-on program from TAC, we will investigate a method to control or prevent the formation of clots caused by the long-term placement of medical devices within a patient. -------------------------------------------------------------------- We will be evaluating stents, shunts and central catheter lines - devices used for the long-term injection of drugs. -------------------------------------------------------------------- When a foreign device such as a stent is placed in an artery to open it and provide blood flow, the body reacts by forming a clot as the first step in the healing process. The clots, which form, are unstable and often break away and circulate throughout the body, sometimes causing a pulmonary embolism, stroke or other occlusive damage. Companies have attempted to resolve these problems by coating stents and other medical devices with special coatings or drugs such as heparin. None of these solutions have eliminated the problem, and thuswe are looking at the use of a TAC type product to address this issue. Again, the use of humanised antibodies to direct the drugs to the source of the clot is more effective and preferable to a much higher systemic dosing of the patient as is current practice. -------------------------------------------------------------------- These new programs are designed to maximise the opportunities that we can gain from the use of the humanised antibody as a platform technology. We will continue to explore new uses and expanded claims as we move forward in the development programs. -------------------------------------------------------------------- SUMMARY -------------------------------------------------------------------- Agenix continues to grow as one the few profitable biotechnology companies in Australia and it is our intent to use this financial platform to push further ahead with our development plans for the Thromboview(TM) and the use of the human antibody platform technology. -------------------------------------------------------------------- By continuing to focus and grow our existing businesses, we will have the means to develop our next generation of products, allowing us to continue to grow and prosper as a company. -------------------------------------------------------------------- We continue to look towards the short and long term future with great enthusiasm and optimism and as a company will continue to strive to deliver our milestones on time and on budget. --------------------------------------------------------------------
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