AustCancer miffed by market reaction

Cancer vaccine developer Australian Cancer Technology is mystified and disappointed by negative share market reaction to positive news from human trials of its cancer vaccine, Pentrix.

The Perth company has watched its share price slide 22 per cent to about 14 cents since it announced the trial results in mid-November.

What deepens the puzzle for AustCancer is the different market reception accorded CSL during its more recent announcement of good results from clinical trials of another cancer vaccine.

CSL's share price gained 17 per cent to $20.20 in the days surrounding publication of news that a vaccine it co-developed had shown 100 per cent protection against one type of cervical cancer virus.

By contrast, AustCancer's mid-November announcement of successful Phase Ia trials of Pentrix, a broad-spectrum vaccine that could potentially target 50 per cent of all cancers, was met by the market with a yawn. Instead of lifting, AustCancer's shares slumped enough to trim several million dollars from its market capitalisation which is now about $8.5 million.

"We were very disappointed by the market reaction," said AustCancer company secretary Brett Dickson.

He speculated that it proves junior biotechs can't rely on letting good results speak for themselves in a share market which is still in recovery mode.

"You just have to get out there and let people know."

On the face of it, AustCancer has a good story to tell. Unlike the CSL vaccine which operates against specific viruses, AustCancer's Pentrix is broad-spectrum.

It targets one of the most common defects in cancer cells -- a mutated p53 gene.

Called the 'guardian of the genome', p53 stops cells which have damaged DNA from multiplying and inducing cell death. In about half of the cases where p53 is damaged or mutated, it allows damaged cells to divide uncontrollably and results in the formation of a cancerous tumour.

The mutant form of the p53 protein is potentially vulnerable to Pentrix which is not cell-based and is more efficient in its treatment methods than cell-based vaccines.

Initially it is seen as a potential replacement for chemotherapy in cleaning up residual cancer cells in patients who have had a cancer surgically removed. AustCancer announced on Nov 12 that all five patients in Phase Ib/IIa clinical trials of the vaccine at St Vincent's Hospital in Sydney produced a strong immune response when given the vaccine.

The company is now planning a Phase IIb trial which will probably be a multicentre trial with overseas participants, including the US.

"We are currently talking with a lot of people and the Phase IIb trial will be a much larger effort," said chief operating officer Dr Julia Hill.

On another front, AustCancer is upbeat about its joint venture with UK-listed drug discovery services company BioFocus on a program to seek a small molecule replacement for the multibillion dollar breast cancer drug Herceptine.

The project, based on the use of c-erb receptors to block the development of breast cancer, is ahead of schedule and is being accelerated further in terms of dollars and people, Hill said.

Using AustCancer's technology to screen BioFocus' library of small molecule has uncovered a family of structurally-related hits which appear to bind to the erb B2 receptor and downregulate it, she said.

The company has developed a series of assays to determine which of the hits are most potent and expects to proceed to animal trials in about 12 months.

The challenge for AustCancer is to construct a financial environment to fund further development of its two promising next-generation cancer drug projects.

Its cash in hand stands around $1 million which "doesn't go a long way" in terms of financing large clinical trials, Dickson concedes.

The company stands to recover about $300,000 to $500,000 of its 2001-2002 research spending under a Federal government R&D rebate scheme.

Apart from that, the company has not yet decided whether it will look for a big brother or go to the market for additional funds, Dickson said.

"But we don't see it as a big hurdle because money is always available for good projects," he said.