CSL deal boosts GroPep profits
Wednesday, 27 July, 2005
Adelaide-based GroPep's (ASX:GRO) net profit after tax for the 2004-2005 financial year has been boosted by a one-off tax benefit of AUD$3.4 million, and is now expected to be approximately $6.4 million compared with a previous estimate of $3 million.
The tax benefit followed a review of the implications of the January deal entered into with CSL (ASX:CSL) to restructure the sales, marketing and distribution agreement between GroPep and CSL. The review found that payments from CSL will be taxable in the 2004-2005 year, meaning that GroPep's existing carry-forward tax losses will be used to offset the gain recognised.
GroPep's net profit before tax for 2004-2005 is expected to be in line with previous guidance at approximately $3 million.
Licensing deal
Meanwhile, GroPep has licensed Whey Growth Factor Extract (WGFE) technology rights to private Adelaide-based TGR Biosciences.
Through its Nanyang Innovation Fund, venture capitalist Nanyang Ventures will invest up to $3 million to fund further clinical development of WGFE as a treatment for oral mucositis, a chemotherapy side-effect.
GroPep will receive royalties of more than 10 per cent from TGR on commercialisation of the technology and its shareholding in TGR has dropped from 20 per cent to 12 per cent.
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