update on lct in general

Afternoon,

I’ve recently been in touch with Professor Elliot and Dr Tan at LCT and asked various questions about the NZ / Russian Clinical trials, future fundraising plans and product commercialization to ensure LCT are on the right track from a shareholder perspective. I’ve summarised the info for you:


On future fundraising:
LCT have advised the funds required to fully develop a new medical treatment is always going to be high and LCT is aware of the effect of diluting stock for existing shareholders – the financial strategy is up for another review in November when the Board meets before the AGM. LCT are committed to increasing shareholder value and various shareholders have indicated interest in further share purchase plans and rights issues.


On the NZ / Russian trials:
LCT would like to develop the Diabecell treatment in NZ however cannot afford to wait for the NZ government. Hence, LCT have moved the testing of the middle dose from NZ to Russia. The original plan was for Russia to start with the lowest dose and the next 2 levels were to be trialed in NZ. When it became clear that the Minister was going to take much longer than even the Ethics Committee anticipated, LCT expedited the program to outside NZ.

The aim of the clinical trials is to find the optimum dose and do sufficient numbers of patients (called the pivotal number required for registration and this varied for different countries) anywhere in the world to the same international standards so that the clinical data can be used for regulatory applications worldwide. LCT hope NZ will be part of this picture.

If the NZ trials are approved, LCT may have to continue with the 4 patients at the middle dose in NZ as this is the approved protocol, and approval (in 2007) from ethics committee is required to change this. LCT do not want to delay the trial if approval from the NZ government comes in and the 4 patients will add to the body of data that will be used in regulatory applications. The next 4 will be at the highest intended dose.

If clinical trials in NZ and USA are ruled out LCT will push to do all trials in Russia for commercialization there. Given the status of the world economy, LCT are told that that China has liquid funds and the company has been approached by centers in China and Taiwan. Other trial centers are under investigation.

As for the recent meeting with the NZ Health Minister, LCT are waiting for an announcement and understand that his office is actively putting final papers for the Minister.


On commercialization of Diabecell:
LCT are doing everything they can to commercialize the product outside New Zealand. With DiabeCell the intention is to commercialize in Russia where the trial first started. Prof Elliott is in Russia presently to assess the patients but also to continue the discussions of the process to commercialization


Timeframe for Russian trial completion:
By Q1 09 all implants will be completed (for lowest and medium dose). It has to be done at monthly intervals as it is a “first-in-human” study.


Timeframe for commercialization:
This is being discussed with potential Russian ‘partners’. It depends on what is meant by commercialization but the target is to get revenue from the treatment in 3 years if all goes well. This is a first-in-class product and the timeline is based on best estimates of what is required and how long the regulatory officials in Russia might take to approve the new treatment, assuming the trials go as well as it has been. If it is possible to move faster, LCT will do so.



Cheers

SW