Eiffel hanging on as cash dwindles

Sydney drug re-engineering company Eiffel Technologies (ASX:EIF) has released its results for the 2004-05 financial year, showing losses of AUD$3.5 million -- down 8.3 per cent from the previous year -- but less than $630,000 cash in the bank.

"The company is still here and working hard toward establishing a successful path," said Eiffel general manager Pascal Hickey. "Our expenses have been considerably reduced and since the bulk of the reduction has occurred in the later half of this year we expect this trend to continue. This is a positive achievement -- we have knocked off a lot of the company's corporate cost -- the saving has come from a reduction in senior management from five to two staff, but we have maintained the same amount of technical staff."

Hickey was reluctant to answer questions in relation to the company's cash burn. "It's a lot less than 12, even six months ago," he said.

Asked how the company planned to survive with relatively few cash reserves, Hickey pointed to a "positive" relationship with a US partner. "Eiffel's cash situation will have to be addressed by continuing to progress this relationship as well as acquiring additional commercial attractive projects in the coming 12 months," he said.

Revenues related to research agreements totally $355,981 have been recorded for two feasibility studies that were signed in November 2004 and February 2005 with a US-based specialty pharmaceutical company to develop an improved asthma treatment utilising Eiffel's re-engineered drugs and the unnamed partner's delivery device. Overall, total revenue has fallen by 16.4 per cent to $1.046 million from $1.25 million, due to revenue from a Commonwealth R&D Start grant falling to $606,274 million from $1.06 million the previous year.

Hickey took the helm of the company in May after the resignation of CEO Christine Cussen. At the time, the company's share price had dipped below $0.04 -- more than two thirds below its level in January of around $0.12. Chairman Tom Hartigan blamed the price plunge on sales of the company's stock by Queensland Investment Corporation.