Peptech to pay shareholders dividend after patent win

Peptech (ASX:PTD) is begrudgingly sharing the booty from its recent legal win, announcing today it would 'reward' shareholders with a dividend of 8 cents per share.

Peptech has not revealed financial details of the settlement of its patent dispute with Johnson & Johnson subsidiary Centocor, but has given guidance that its net profit in 2004-05 is likely to be between AUD$18-21 million.

The dividend will be subject to shareholder approval at the company's February annual general meeting, and also to the receipt of a favourable tax ruling.

"Our shareholders and the financial community have differing ideas on how best Peptech can invest its strong cash reserves," said Peptech chairman Mel Bridges.

"The board is quite clear on its position that medium- to long-term shareholder value will be realised through investment of capital back into the company's thriving drug development program.

"The decision to honour a distribution to shareholders, however, reflects the board's commitment to shareholders to return, in the short term, some of the capital originally invested in the company, while preserving sufficient working capital to achieve long-term growth. We are positioned for growth as never before."

The distribution is expected to be complete by the end of the first quarter of the 2005 calendar.

Meanwhile, the Australian Research Committee (ARC) has awarded a AUD$1.4 million linkage grant to Peptech Animal Health, three universities and several state wildlife agencies to investigate the use of Peptech's slow-release contraceptive technology Suprelorin to control large marsupial populations, including koala and kangaroo.

"The product, which is delivered humanely through a simple implanting process, could well prove part of the answer to balancing the requirements of the tourism industry, which is damaged by stories about traditional culling methods, and the pressures the populations are putting on the environment," said the managing director of Peptech's animal health division, Dr Tim Trigg.