AGT soars on OTC obesity product hopes

The share price of AGT Biosciences (ASX:AGT) leapt nearly 15 per cent today, after the company announced it had filed patent applications for a series of 10 proteins that are likely to be suitable targets for the development of over-the-counter (OTC) products to combat obesity.

The proteins are all involved in sending a signal from the gut to the brain indicating fullness or satiation, said CEO Prof Greg Collier. "It's a scientifically based OTC approach -- we're looking at gut proteins that signal to the brain that it's full," he said.

Collier said the project was part of a move to leverage AGT's IP into different areas. Last year the company formed a partnership with the Institute for Pharmaceutical Discovery in the US to conduct natural product screening with the intention of identifying compounds that could block or stimulate these proteins.

The Institute specialises in screening natural products for use as OTC dietary supplements, and has experience in up-scaling and marketing the products as well.

In the US and other major markets, natural products can be registered as dietary supplements without the need for extensive clinical trials, providing a fast path to the market.

Now AGT and its partner will embark on a screening program to identify compounds with the potential to act on the targets. "We have a two-year program with the US group -- at the end of that two years, we hope to have something ready for up-scaling and getting to the market," Collier said.

And the potential market is a big one -- Collier estimated that more than US$12 billion is spent a year on OTC anti-obesity products, with growth predicted to be 20 per cent per annum for the rest of the decade. So even a tiny market share is potentially worth a lot of money, he says.

Ultimately, the company plans to look for therapeutic leads against the same proteins, Collier said.

At press time, AGT shares were trading at AUD$0.55 after opening at $0.52 this morning.