Narhex board ousts MD

Sydney anti-viral drug developer Narhex Life Sciences (ASX:NLS) has relocated its head office to Melbourne following the resignation of founder and managing director John Majewski.

"We were concerned that there appeared to be a time slippage in what we wanted to achieve in the first two years," said chairman Michael Cohen, who has taken over from Majewski as executive chairman. "In parallel, there was a breakdown in communication with the market about what we had achieved and how the projects were going.

"The board decided that these issues were of sufficient concern to warrant intervention, and decided that it was appropriate that the incumbent CEO be replaced by executives who had extensive previous experience in Australian biotech companies."

Non-executive director Prof John Mills has been appointed as managing director. "Prof Mills is well known in Australian HIV medicine and is based in Melbourne. I am also based there and it seemed a logical decision to relocate the head office," said Cohen.

"The dilemma for the new company is that there is a lot to do, and a lot is clinical and technical development. It is helpful to have knowledge about biotechnology protocols and procedures to ensure that the optimum route to commercialisation is chosen.

"The board has always acknowledged John Majewski's role as founding visionary for the project that resulted in the discovery and development of our HIV protease inhibitor DG35 and prodrug DG17."

Cohen said Narhex was still focused on the fast-track development and commercialisation of its HIV protease inhibitor drug DG35/17. "At this stage the board remains committed to its primary objective -- to pursue registration in China," he said. "We would also consider other opportunities on their individual merits.

"At the moment we are doing formulation as a precursor for an extended pharmacokinetic study. It is being done to understand the effect of formulation, proton pump inhibitors and protease inhibitor booster compounds such as Ritonavir. It is a priority and we are still committed to trying to commence the pharmacokinetic study in Australia before the end of October.

"All this work is considered important in establishing an acceptable data package to present to Chinese regulatory authorities as a necessary part of gaining approval for phase II trials."

Financial results

Narhex remains in a strong cash position with AUD$7.3 million cash in the bank, after raising $8 million in an IPO in January. "The company retains most of the cash it raised from the IPO. Until it begins various clinical studies it has had little demand on its capital reserves," said Cohen.