It has now been nearly twelve months since Solbec changed its name from Britannia Gold NL to Solbec Pharmaceuticals Ltd and its direction to pharmaceutical R&D. It has been an eventful period. In this time we have:
* Completed five animal studies.
* Treated over thirty patients with BEC(R) under the Specials Access Scheme.
* Completed a cohort of non-clinical studies.
* Lodged patents and had a patent approved in Japan.
* Shown BEC(R) to be active in over 100 tumour lines.
* Presented BEC(R) scientific data over 15,000 researchers at the Worlds largest cancer conference in America.
* Horticultural facility developed and over 2000 plants under cultivation.
* Moved premises.
* Established and commissioned new laboratory facilities.
* Launched the Web site.
* Met with all key regulatory authorities in USA, Europe, UK and Australia.
* Lodged Regulatory filings in Australia and New Zealand for Lawley's "Androfeme" testosterone cream.
* Initiated three phase II/III clinical trials for Lawley products.
* Completed one phase III clinical trial for Lawley products.
* Determined therapeutic activity of DPXC against cancer cell lines.
* Determined activity of DPX-01 against Herpes Simplex.
The above summary is an outline only of the work undertaken and much additional development work is in progress.
BEC(R) UP-DATE
In April, the Managing Director and Regulatory and Clinical Manager, accompanied by our US Regulatory Specialist and a representative of our Canadian toxicology Group met with The United Dates Food and Drug Administration to discuss our proposed clinical and non-clinical program for the United States due to commence quarter three 2002. Solbec's proposal was very well received and generated positive discussions between Solbec and the FDA. It was also confirmed that BEC(R) would go through the fast track assessment program. We will now lodge documentation with the FDA seeking to have BEC(R) designated as an orphan drug. Solbec was very pleased with the outcomes achieved.
In the first week of April, the largest Cancer Research Conference in the World was held in San Francisco, Solbec was delighted that a presentation on BEC(R) made the first day agenda of the conference. The presentation was given by Dr Robert Nagourney, a well respected Clinical Oncologist from California. Dr Nagourney has been working on BEC(R) for approximately nine months. During this time he has tested over 68 tumour types. The presentation detailed the results generated.
The highlights of the Nagourney presentation were:
* BEC(R) was effective against all 68 tumours tested.
* BEC(R) target tumours include melanoma, sarcoma, breast, and gastric intestinal tumours.
* BEC(R) activity appears to correlate closely with taxol (worlds largest selling anti cancer drug ($3.0 billion/year).
* BEC(R) potentates the activity of me other chemotherapeutic drugs by up to 32%.
The presentation was well received and BEC(R) was introduced to an audience of over 15,000 researchers.
The Managing Director has met with and is holding discussions with manufacturers in the US and Europe with regard to the manufacturing of BEC(R) formulations for international markets. These discussions are in the early stage.
Solbec's Pharmaceuticals division moved to new premises in Osborne Park, Western Australia in January 2002. The premises were chosen to allow the development of a laboratory and manufacturing facility for BEC(R) extraction.
The laboratory is now equipped and fully operational with commissioning and validation complete. We have now employed three specialist chemists engaged in formulation, stability trials, process development and BEC(R) purification. The laboratory and staff will allow us to expediate our development program. Manufacturing of BEC-2S has continued in the laboratory. Work carried out by Curtin University has successfully developed a large scale extraction - purification process for BEC(R) which our chemists are now validating at Solbec's premises.
Scale up will allow commercial quantities of BEC-2S to be manufactured
Solbec have a modern horticultural facility where propagation and cultivation of the selected plant species is undertaken. The facility south of Perth currently has over 2000 mature plants and over 1,000 seedlings in various stages of maturity. We have a second propagation facility north of Perth to ensure constant supply of plant material should there be any adverse event at either facility. Further facilities are planned as the need arises.
Results for the animal studies carries out at Murdoch University have confirmed the efficacy and safety of BEC(R) in melanoma and mesothelioma models. Mesothelioma is an incurable asbestos related lung cancer. The results Solbec has achieved in mouse studies are very promising with independent reports stating that "most researchers would be excited with 1% remission of disease", whilst Solbec achieved 17% remission.
Pre-clinical work required by the US FDA in order to commence human trials in the US, has been identified and a Canadian group has been commissioned to undertake the program. Work is expected to begin Quarter three 2002.
Phase I/II clinical trials are being planned in Australia and will be carried out to the stringent FDA standards. We are currently in discussions with a prestigious group of hospitals to undertake these studies. It is proposed that these trials will be completed by December 2002 and phase II studies in the US will be under way early 2003.
The potential for Solbec to capitalise on BEC(R) was further expanded with another provisional patent application in Australia and the USA, lodged in February, and with the approval of an existing patent in Japan. Further patents are in development and we hope to have these lodged with the Australian and US authorities in the near future.
The patent lodged in February will protect our IP in relation to the diagnostic potential of the drug as well as its use as a therapeutic. In the laboratory we have shown that we can identify and visualise cancer cells using this technology, we are now looking for partners to complete the development. Solbec has been approached by a number of companies interested in working with us on this project.
In an effort to keep the public and shareholders informed of the company and our progress, in December 2001 we initiated our web site www.solbec.com.au (http://www.solbec.com.au/). The web site has had in excess of 2500 visitors and provides a wealth of information about the company. The web site also allows interested people to subscribe free of charge to our news service, so that each subscriber will be e-mailed whenever a news article, report or ASX announcement is made regarding Solbec. This ensures real time up to date information for the shareholder or subscriber.
In the past six months Solbec has received a large amount of media coverage including:
* ABC News * National Nine News * ABC radio business hour * WA Business News * Sunday Times x 3 * Sydney Morning Herald * Bio Medoz * West Australian * Huntleys Small Companies Guide * Bioshares * Real Estate Show * Stock to Watch (Sanford) * CNBC * Melbourne Age
The Directors are aware of the benefits of good media coverage and will continue to elicit publicity at the appropriate time. We have been keeping stockbrokers updated on announcements and informed of our progress. Excellent responses have been received from many of the key firms in Biotech. Many broking firms will not recommend stock to their clients until they have completed a due diligence study and compiled their own research report. We are aware of this and are working with a number of the firms to facilitate this process. We have recently commissioned an independent review of Solbec's operations and science. This review was very positive and will be forwarded to broking firms with the hope it will assist them in their own assessment of the Company. The Managing Director will continue meeting with Investment Advisors to inform them of Solbec's progress and potential.
STEROID PRODUCTS (LAWLEY PHARMACEUTICALS JV)
The Lawley Joint Venture continues to progress well. We have received a preliminary assessment of the regulatory file submitted to the Australian TGA, for Andro-feme (testosterone for women). As is usual, the TGA have requested further documentation. This has been prepared and submitted and should expedite the approval process outcome. We have also received a response from the New Zealand regulatory authority for the Andro-Feme file submitted and data is currently being prepared to meet their requirements. Successful outcomes of these submissions will enable sales and marketing activities to rapidly increase the revenue stream generated by the Lawley products.
Regulatory submissions for other Lawley products are in preparation and are expected to be submitted to the regulatory authorities by the end of 2002.
CASH POSITION
As at 30 April 2002 the Company held $1.4M cash on deposit. The Company also has holdings in ASX listed entities currently value at ca$2.4M. Included in these holdings are 8.5 million shares (HRK) and 2.75 million options (HRKO) in Heartlink Limited. Heartlink Ltd recently acquired the Travelworld, Traveland and Jetset travel franchise groups and following a change in name to Jetset Travelworld Ltd and capital raising is expected to relist on ASX around 30 May 2002. Solbec provided loan funds of $1.0 Million to assist Heartlink in the abovementioned acquisitions and is entitled to convert the loan funds to shares and (1:2) options in Heartlink at $0.20 per share.
The investment was made to return a direct dividend to Solbec and also to enhance the value of the significant equity in Heartlink held by Intermin Resources Ltd (IRC) (currently 26% of the issued capital of HRK). Solbec holds 12.35 million shares or 13.2% of the issued capital of IRC. This holding is currently valued at ca$0.74 million.
In addition to the abovementioned current assets, the Company believes that notwithstanding the withdrawal from MIM from the Jervois Project, the project has a significant cash value. Solbec is currently negotiating with a number of parties to realize this value. Should these negotiations conclude successfully the cash position of the Company would be further enhanced.
MINERAL PROJECTS
Activities on the Company's mineral projects are gradually being phased out as joint ventures are terminated or tenements are not renewed.
JERVOIS PROJECT - MIM JOINT VENTURE
Exploration by MIM at the Jervois Project is being wound down following disappointing results in recent drilling at this project. It would appear that while early results from MIM were very encouraging and substantial copper resources exist, the Jervois Project does not provide the size/grade parameters which meet MIM investment criteria. The result is disappointing for the Company and MIM who have expended over $2.5M on this project since commencement of the Joint Venture.
The Company has been notified by MIM of its withdrawal from the project as at 28/05/2002. The Company has had numerous enquiries from parties seeking to acquire the project or to continue exploration in joint venture with the Company. These enquiries are currently being considered.
POTASH PROJECTS
The Company holds a number of mining tenements which have potential to produce potash. These include the Chandler Alunite Project (option to acquire), the Gingin Dandaragan Glauconite project and the Yaringa Potash project.
Exploration and metallurgical testwork undertaken on these projects over the past two years has been very encouraging and indicates excellent potential for viable potash recovery from resources held. The Company is seeking a well funded resource company to acquire or fund development of these projects.
OTHER PROSPECTS
Exploration activities on the Company's other (gold) prospects have been restricted to minimum expenditure input requirements. Farm in partners are being sought for these projects.
SUMMARY
Overall the Pharmaceutical project continues to provide exciting and encouraging results. The Company is well on track and on budget to achieve its long term goals of registration of BEC(R) and steroid products in world markets. The mineral assets are being packaged into marketable parcels to assist in the divestment of those assets. The Directors and Management of Solbec are pleased with the progress of the Company to date.
