BioWorld International Correspondent

SYDNEY, Australia - EcoBiotics Ltd. is raising A$3 million (US$1.62 million) from investors to continue what the company said is a "targeted" biodiscovery program mainly in tropical rainforests that has identified lead compounds with new structures.

EcoBiotics, of Brisbane, issued an offer information statement as required by law to raise funds from the public, but is unlisted and expects to remain off the stock market boards, under its present schedule, until 2003.

But EcoBiotics' executive chairman, Victoria Gordon, said that the company's search program already has identified five possible lead candidates, including four completely new structures. The lead compounds may be of use as antibiotics but there also may be nematocidal (anti-worm) treatments.

Gordon said that the company's main competitive edge was its expertise in ecology, including her own specialty of chemical ecology and another director's expertise in forest ecology. That additional expertise meant the company was allowed to collect samples - it has rights to collect samples in rainforests in the state of Queensland and on the Solomon Islands - where there is more chance of finding a likely compound.

The usual strike rate of a bioscreening program, where any and all samples from the wild are put through bioscreens, may be between 0.1 percent and 1 percent. Gordon said that with EcoBiotics' approach the strike rate is 85 percent.

EcoBiotics is applying for patents for the initial lead compounds it has discovered and is in negotiations with major pharmaceutical companies over development. The company intends only to discover the compounds and leave the development up to others.

Gordon said that eventually the company hopes for a cash flow from sign-on fees, typically of between A$0.3 million and A$2 million, and milestone payments - typically five to seven payments of anywhere between A$0.5 million and A$2 million - plus royalties, assuming that the product gets to market.