Peptech in cancer JV

Peptech (ASX:PTD) has entered into a joint venture with University of Sydney spin-off Biosceptre International to develop a range of diagnostic and therapeutic products based on a specific cancer marker expressed in a broad range of human cancers including skin, prostate, breast, bowel and uterine cancers.

Chairman Mel Bridges said the two companies would jointly develop two diagnostic products and two therapeutic products, splitting profits from commercialisation of the products equally.

Peptech has paid AUD$3.5 million to Biosceptre for an exclusive license to develop its two applications, and these funds have been used by Biosceptre to acquire equity of about one per cent in Peptech at $1.51 per share.

According to Bridges, the move is in line with Peptech's strategy to broaden its therapeutic targets to include oncology, in addition to the existing focus on anti-inflammatory targets.

"Peptech is looking to expand past therapeutic antibodies to diagnostic and imaging antibodies," he said. "Imaging antibodies in particular are a lucrative market and one that has been ignored for some time especially by multinational companies."

While both companies will work very closely together on all four products, Peptech will be financially responsible for commercialising two products -- an imaging antibody to diagnose cancer in situ, and a therapeutic antibody based on the Domantis domain antibody technology; while Biosceptre will be responsible for a diagnostic test and a topical cream for dermatological use, Bridges said.

The diagnostic test is likely to be ready for market in the second half of 2004, giving the joint venture early access to cash flow.

"That's one of the attractions for Peptech, given that the diagnostic will go to market fairly quickly," Bridges said.

He said it would probably take 3-5 years to develop a topical product, and a similar time to develop an imaging antibody.