BioWorld International Correspondent

SYDNEY, Australia Three directors of Peptech Ltd., including the board chairman, abruptly departed the company, reportedly due to shareholder concerns over how the company will spend major income streams it is set to receive.

The three departures, including Chairman Ed Tweddell, Catherine Walter and Graham Walters, occurred only three months after their appointments and caused a major slide in the share price.

Peptech’s stock, which trades on the Australian Stock Exchange under the symbol PTD, fell nearly 10 percent from A$2.89 (US$1.53) just before the announcement. The stock has rebounded since and closed Tuesday at A$3.01. The shares were above A$5 in February.

The directors left after stating to the company that “a group of retail shareholders have indicated for some time that they are not happy with the approach that [the three resigning directors] have been seeking for the company. In recent days these shareholders have actively canvassed for support for an [extraordinary general meeting] to have these directors removed.” The statement continued, saying, “In the best interests of our shareholders, and to avoid a period of uncertainty and internal disputation within the company, the directors have elected to resign.”

The managing director of Sydney-based Peptech, Stephen Kwik, told BioWorld International that no one had heard from the resigning directors since the letter was received. He said that the company would hold a meeting of shareholders to elect new directors. He also stressed that nothing has changed in the management of the company.

The event received considerable media coverage in Australia in part because Tweddell was previously CEO, and still is chairman, of a major industrial conglomerate, Pacific Dunlop, a troubled company. One shareholder of Peptech was quoted as saying that Tweddell wanted to run the company single-handedly.

Peptech has a portfolio of intellectual property products both under development and earning money. But its major asset is a series of patents on antibodies that bind to tumor necrosis factor (TNF) and rights to the product D2E7, which is used to treat rheumatoid arthritis. The TNF antibodies are licensed to a subsidiary of Johnson & Johnson German-based Knoll AG. Knoll is, in turn, owned by U.S. company Abbott Laboratories, which recently applied to the FDA to register D2E7.

Analysts suggest that the income streams from the Remicade TNF antibody patents will be substantial, but Kwik declined to comment on the amounts involved. n