BioDiem reports new chair, increased loss

Australian corporate leader Hugh Morgan is the new chairman of Melbourne-based flu vaccine company BioDiem (ASX:BDM), replacing Rod Unsworth who has been chair since May 2002.

Morgan is president of the Business Council of Australia and on the board of the Reserve Bank.

"Morgan has an outstanding career, particularly in the mining industry -- which has some comparisons with biotechnology -- in terms of length of development, the type of detail needed to develop a resource and capture its value," said BioDiem's CEO Tom Williams.

"I think he'll bring a fresh perspective and some strategic thinking to the company that should be very valuable," he said.

Unsworth is resigning due to the increased commitments of his full time position as Vice President Asia Pacific of Schering-Plough USA.

"While he was very interested in BioDiem, the pressures of travel and time were such that he took the view that he couldn't really fulfil the position in the way he'd like to," said Williams.

Michael Nicolas, foundation chairman of BioDiem, has also stepped down as a director.

"Michael hasn't been well in the last six to nine months and has stepped down for health reasons," said Williams.

BioDiem's financial results

BioDiem reported an increased loss of $4.2 million in 2004-05 up 32 per cent from the last financial year (2004: $3.1 million), due to increased R&D activity.

R&D expenditure related to the company's poultry medicated feed additive BDM-I, a replacement for antibiotics in animal feed and BDM-E, a peptide aimed at treating retinal eye disease such as diabetic retinopathy, said Williams.

BioDiem has been preparing BDM-I for manufacture and conducting preliminary toxicology and animal model studies, with larger scale field trials starting at the end of this year or early next year.

The company is also planning a combined phase I/II clinical trial for BDM-E for early next year, said Williams.

Total revenues for the company increased from $0.4 million in 2003-04 to $1.7 million, mainly due to a $US1 million milestone payment from Akzo Nobel's vaccine division Nobilon, which struck a licensing agreement last year for BioDiem's intranasal influenza vaccine (LAIV). Nobilon has agreed to develop the cell-culture production influenza vaccine for registration in Europe and the rest of the world and will manufacture the vaccine. BioDiem retains the US marketing rights and will receive royalties on sales as well as milestone payments of US$8 million.

BioDiem had cash at the end of June 30, 2005 of $5.7 million (2004: $9.8 million). This has since been boosted with a second milestone payment of $US1 million from Nobilon.

"We have adequate resources for at least the next year's program," said Williams. "We'll consider our position beyond that based on looking at the income we're receiving from our licensing deals."

Williams said that BioDiem is building a product development business based on global partnerships.

"Our strategy is to project manage our portfolio of products, from late pre-clinical through to typically phase II proof of concept clinical trials, and then look for global partnerships to do late stage clinical trials, to take the products to market," he said.

BioDiem's year:

• Reported promising results from the first field trial of its candidate BDM-I antimicrobial as a poultry feed additive.
• Took a licence for vision peptide therapeutic BDM-E, developed at the St Petersburg Institute of Bioregulation and Gerontology, for US$500,000.
• Licensed its cell-culture production influenza vaccine to Dutch group Nobilon, part of Akzo Nobel's pharma group, for USD$8 million including milestone payments and received a US$1m signing-on payment.
• Dr Peter Hodsman replaced Prof Robert Borland as research and development director.
• Former Deutsche Bank executive Andrew O'Brien was appointed as a non-executive director.