BioWorld International Correspondent

An Australian company with a U.S. development partner is expecting to float on the Alternative Investment Market in London to raise £15 million (US$27.2 million).

Norwood Immunology Ltd., of Melbourne, is developing gonadotrophin-releasing hormone (GnRH) analogues as immune system boosters for adjunctive treatment in cancer and for treating viral diseases, with longer-term plans to move into immune rejection, stem cell therapies and vaccines.

Richard Williams, Norwood CEO, told BioWorld Today Norwood wanted to attract international institutional investors. The company thought the Australian Stock Exchange was unsuitable, and it chose AIM over Nasdaq because "AIM has set itself up to allow overseas companies to come to a quoted market and has a lot more user-friendly interface [than Nasdaq]."

The scientist behind Norwood, Richard Boyd, studies the biology of the thymus and has built up preclinical and clinical evidence that GnRH analogues encourage growth of that organ, leading to an increase in production of immune-stimulating T cells.

The clinical data come from a trial the company is conducting in Australia in patients undergoing bone marrow transplants who have received GnRH analogues as adjunctive therapy. The trial is not placebo controlled, but Williams said the immune systems of the 60 patients treated so far recovered more quickly than usual.

Norwood said that its focus on a class of drugs already in use reduces development costs and commercial risks. Williams said the company has applied for a number of patents for using GnRH analogues in immune modulation and expects to start clinical trials in the U.S. in the second half of 2004.

Norwood's U.S. partner is TAP Pharmaceuticals Inc., of Lake Forest, Ill., the largest vendor of GnRH analogues in the U.S. TAP will provide the drug and Norwood is paying for the trials. TAP is a joint venture between Abbott Laboratories, of Abbott Park, Ill., and Takeda, Japan's leading pharmaceutical company.

The aim of the collaboration is to extend the label for Lupron Depot, TAP's treatment for prostate cancer, to include immune system indications. Under the terms of the deal, Norwood will receive a royalty on all sales of Lupron in an immunological indication. The drug had U.S. sales of $850 million for prostate cancer in 2003.

Williams said Norwood would start two U.S trials in bone marrow transplants in the second half of 2004, noting, "Although this is not a big market, demonstrating that Lupron has a role in restarting the immune systems of these patients will be an important proof of principle."

Another trial will look at patients receiving Lupron for prostate cancer, measuring T-cell output and antibody responses to vaccination, to build evidence of the immune-boosting activity of GnRH.

A fourth trial, using Lupron as an adjunctive treatment in a cancer vaccine trial for the treatment of melanoma also is planned to start this year.

"The basic market we are after is Lupron as an adjunctive treatment to chemotherapy in cancer," Williams said. "Once we start to generate some U.S. data and get an extension of the label approved in one indication, we expect it to be widely adopted."

Norwood is a spinout from Norwood Abbey Ltd., also of Melbourne, a medical device company that is listed on the Australian Stock Exchange. The parent company would retain a 75 percent share following the flotation, which is expected to give Norwood Immunology a market capitalization of £115 million.

Williams said the money raised is expected to see Norwood to cash-flow break even. Beyond the expected royalty stream from Lupron, the company intends to build on its expertise in thymus biology and move into transplant rejection, stem cell therapy and other areas.

Following the London listing Norwood will continue to be based in Melbourne, where it employs 28 researchers. Williams and Chief Financial Officer Richard Scarrott will be based in London, and the company will operate on a virtual model, buying in all administrative and clinical development services.