Alchemia waiting for grant revenue

Just over half a million in undelivered grant funding has left a hole in Alchemia's (ASX:ACL) accounts, with the company announcing a net loss after tax for the half-year of AUD$4.6 million, compared to $2.7 million in the previous corresponding period.

Alchemia managing director Tracie Ramsdale said the higher loss resulted from increased R&D expenditure, costs associated with the company's forthcoming Nasdaq listing and $600,000 in grant revue which had yet to be approved by the department of Industry Research and Development grants board, and had therefore not been included as revenue in the half-year results. Ramsdale said she believed the matter would be satisfactorily resolved during the current quarter

Most of the company's expenditure in the half year was incurred on the pilot study for the company's synthetic heparin at Dow Chemical Company and on external screening and animal studies on anti-cancer and antibacterial programs.

Ramsdale said the pilot manufacturing at Dow was 75 per cent complete, and due to be finished in the second half of this year. The material will be used by partner American Pharmaceutical Partners for formulation and stability studies in preparation for filing with the FDA at the end of 2006. "The market launch we anticipate will be early 2008," said Ramsdale.

Alchemia also revealed in a recent investor presentation that current leads in its antibiotic discovery program have not show efficacy in animal models of infection.

"This means that we have further optimisation to do. The drug appears to have quite high binding levels of proteins to serum. It gets captured in the bloodstream and doesn't get through to tissues to exert its effect," said Ramsdale. "Compounds often go through various iterations. We've allowed up to 12 months for this program."

At December 31, Alchemia had $17.8 million in cash.