Zenyth posts smaller losses, revenues

Melbourne's Zenyth Therapeutics (ASX:ZTL), formerly Amrad, has posted a smaller loss for the half year to December 31, but also revealed a drop in revenues.

The company's loss after tax was $344,000 for the half year -- an improvement of nearly $1 million from the previous corresponding half year.

Zenyth CEO Andrew Nash put the smaller loss down to changes to operating activities and an increase in income from funds under investment. "The write-up of our investment in [spin-out company] Avexa had to be brought to account," he said.

The company's investment in Avexa rose from $3.1 million at June 30, 2005 to $6 million at December 31, 2005.

Although Zenyth had cash on hand of $662,000 at December 31, 2005 compared with $4.2 million in the previous corresponding half, the company's cash and funds under management stood at $47.6 million, down from $51.7 million in the previous corresponding half.

The company's consumption of $4.1 million in the period included spending on its lead GM-CSF receptor project it is developing with UK firm Cambridge Antibody Technology. The development costs for Zenyth's IL-13 receptor project are being footed by Merck & Co.

But Zenyth's revenue and investment income was down 25 per cent, to $6.8 million. "Some of the revenue from the previous half was based on milestone payments from Merck," Nash explained. "These milestone payments can be pretty lumpy. We didn't have one in the last half but we expect some in the next half."

While milestone payments are not specifically itemised in the company's account, Zenyth has received a total of US$14 million in upfront and milestone payments from Merck already.