BioWorld International Correspondent
LONDON - One of the most established Australian biotechs, Peptech Ltd., is changing its name to Arana Pharmaceuticals following the $128 million acquisition of Sydney neighbor and fellow antibody company EvoGenix Ltd. in August.
The new name, which comes from the Aborigine word for "moon," is intended to reflect the company's Australian roots, John Chiplin, CEO, told BioWorld International. "As a result of the merger with EvoGenix, we felt we needed a new direction. We didn't like any of the combinations, such as PepGenix or EvoPep, and wanted to establish some Australian context."
With its new moniker, Arana is setting out to build its antibody-based portfolio, taking products through Phase II before out-licensing. The company has cash of A$169 million (US$150.4 million) to finance its plans.
Peptech went on the acquisition trail in December 2006, following the sale of its $139 million stake in domain antibody company Domantis Ltd. to London-based GlaxoSmithKline plc. At that time, Peptech bought Scancell Ltd. of Nottingham, UK, picking up two preclinical-stage antibodies.
The acquisition of EvoGenix brought in two antibody technology platforms: superhumanization, a second-generation approach to humanizing antibodies that Arana claims reduces the chances of provoking an immune response, and synhumanization, a method of restoring the potency that is lost in the humanization process.
When Peptech relinquished its interest in Domantis, it kept the lead domain antibody (dAb) arising from the Domantis platform. The antitumor necrosis factor (TNF)-alpha product, now renamed ART621, recently completed a Phase I safety trial.
Chiplin said the data are being analyzed. "We are delighted with it so far. We are perusing the pharmacokinetic data which are very interesting." The dAbs are scaled-down versions of antibodies that are easier to manufacture and can reach intracellular targets that are inaccessible to their full-size brethren. In animal models, ART621 showed greater potency than marketed anti-TNF-alpha antibodies. The product will go into Phase II in 2008.
Currently, Chiplin is in Europe, promoting Arana and describing its new strategy. In particular, he wants to boost liquidity in the company's listing on the Alternative Investment Market (AIM) in London. "I'm not enamored with the level of liquidity on AIM," he said, noting there has been little activity in the stock since it was added to the London market a year ago.
"Overnight, 1.1 million shares traded on the Australian Stock Exchange (ASX); today, there have been no trades on AIM," said Chiplin, adding that while the company's backers have urged patience, the cost of maintaining the listing cannot be justified unless liquidity picks up.
Not that he is happy with how the Australian market views the company either, claiming the ASX share price does not appropriately reflect its value. "We have cash of A$169 million, a receivable from GSK in relation to the sale of Domantis of A$17.7 million, and ongoing royalties and license fee revenues, which could be valued at a minimum of A$65 million," said Chiplin. "These amounts represent A$1.07 per share, and with a current share price of around A$1.12 per share, means that the market is only valuing our technology at A$0.05 per share or around A$12 million."
Peptech, which was founded in 1985 and joined the Australian Stock Exchange in 1986, has been profitable for the past four years on the back of patents it holds on anti-TNF antibodies, as well as royalties it receives from sales of Remicade, from Johnson & Johnson subsidiary Centocor Inc., and Humira, from Abbott Laboratories.