Peptech MD moves to sweeten $8.9m loss

Peptech (ASX: PTD) managing director Stephen Kwik is accentuating the positives after Peptech reported an after-tax loss of $AU8.9 million loss in the 12 months to September, after a $AU32.7 million net profit in the previous year.

Commenting on the result, Kwik expressed his disappointment that Peptech's "excellent progress" had been overshadowed by the decision of US pharmaceutical company Centocor in September to not pay Peptech royalties on its sales of Remicade, its market-leading rheumatoid arthritis therapy.

Despite Peptech's "strong legal advice" that Centocor was obliged to pay royalty payments on Remicade sales before that date, Kwik said Peptech directors had decided to be conservative and exclude these revenues from the company's 2002 result.

"I again confirm the Board's determination to resolve the Centocor matter speedily and in our favour so Peptech can continue to build upon the exciting progress we are making in both our human and animal health businesses," Kwik said in an announcement.

Peptech's positives, according to Kwik, include promising progress on developing a single-domain antibody targeting the TNF-1 receptor.

Peptech has a research agreement with UK-based Domantis, in which it has 30.3 per cent equity, to develop a second-generation therapeutic for treating auto-immune diseases. It invested $AU4.6 million in the project this year.

Kwik said development was ahead of schedule, and Peptech expected to begin testing its lead compound in animal models of human auto-immune diseases in the second quarter of next year.

He said existing players in the anti-TNF therapeutics field, including Centocor and its European rival, Abbott Laboratories, were "logical partners" for developing and marketing Peptech's second-generation product.

Abbott already has its own research agreement with Domantis to develop a second-generation compound.

Kwik said revenues from Peptech's veterinary fertility-control product, Ovuplant, widely used in the international racing industry, increased by 32.7 per cent, to $US1.9 million.

The company expects its six-month male dog contraceptive to be approved for use in Australia and New Zealand by the middle of next year.

Trials of a 12-month, reversible unisex contraceptive for companion animals are nearly complete. Some of the trials are being conducted on koalas in overpopulated reserves in Victoria, and on zoo chimpanzees.