Chemgenex rings in $5m loss

ChemGenex Pharmaceuticals (ASX: CXS) reported an AUD$5.1 million loss for the 2003-2004, with around $2 million of the loss attributable to costs associated with the merger between Australian company AGT Biosciences and US company ChemGenex Therapeutics in late June.

The loss was 172 per cent higher than last year's reported loss of $1.8 million.

"There were extra costs involved in doing the merger, but our shareholders can see that the benefits outweigh the costs," said CEO Greg Collier.

Revenues decreased 31 per cent to $3.6 million, which Collier said was due to lower contract payments and fluctuating currency values.

But Collier said revenues in 2004-2005 would cover the R&D expenditure, reserving the $6.2 million raised in a private placement in July for the clinical programs.

"The cash in the bank, based on the clinical milestones we have flagged, will last 18 months without partnering those programs," he said.

"And we've got lots of options in terms of bringing in more revenue -- our capacity is much greater post-merger than pre-merger."

The company's long-term partnership with Merck Sante remains in place to provide revenues through at least 2006 and late-stage discussions with potential partners are underway for the depression and anxiety program, Collier said.

Key events for 2003-2004:

• Entered into collaboration with Starpharma to develop therapies for type 2 diabetes;
• Entered into collaboration with the Institutes for Pharmaceutical Discovery to develop OTC obesity therapies;
• Awarded $8.4 million grant from Federal Government's Pharmaceutical Partnerships Program;
• Merged with US-based ChemGenex Therapeutics, a company with two products in Phase II clinical trials.