Biotech concern seeks $5m for trials

Dunedin biomedical company Pacific Edge Biotechnology is seeking additional working capital as it prepares to release its first commercial products.

Chairman Trevor Scott told the annual meeting yesterday that between $1 million and $5 million was needed to fund validation trials, but an investor or shareholder would have to bring more than just cash - as he did not want to dilute shareholder value.

Directors were working with three potential sources; an overseas company with links to multinational medical device companies, the placement of shares with two existing shareholders or merging products with a publicly listed Australian bio-med company.

A decision would be made within the next three months.

Validation trials of its cancer diagnostic products would add considerable value to PEB products.

In the past two years, PEB has raised $4 million in working capital from shareholders.

Scott said: "It is a high-risk company, but should we achieve what we set out to achieve. The rewards will more than compensate."

Validation trials over the next one to two years were planned on three PEB developed diagnostic products: the early diagnosis of bladder cancer, monitoring recurrence of bladder cancer and for colorectal cancer.

Chief executive David Darling said PEB was discussing an exclusive European licence with a company there for its colorectal prognostic signature product.

It was also talking with two Japanese companies on two separate gastric cancer products.

Darling said clinicians were now recognising the value of bio-markers with the international market estimated at more than $1.5 billion by 2008.

A bio-marker test for breast cancer has just been released in the United States and Europe and will cost US$3500 ($5621) a test.

Key markets for PEB were in Asia, especially Japan, Europe and North America which has a potential gastric cancer market of 240 million people estimated to be worth US$400 million.

Darling said the company needed partners to get access to medical device companies, but completing validation trials would strengthen its negotiating position.

PEB has reported an after-tax deficit of $2.5 million for the year to March 31, a $330,000 improvement on the year before.

Operating revenue increased sharply from $135,000 to $719,000 because of higher grants and consultancy fees, but higher research and development investment saw expenses grow slightly from $2.99 million to $3.2 million.

- OTAGO DAILY TIMES