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BioSpecialist

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Alias Born 12/27/2007

BioSpecialist

Re: BioSpecialist post# 60716

Sunday, 03/30/2008 12:54:19 PM

Sunday, March 30, 2008 12:54:19 PM

Post# of 252302
re :Alchemia (synthetic heparin) update

up 30% last week
http://finance.yahoo.com/q?s=acl.ax&x=42&y=11

27-Mar-2008
Alchemia’s generic fondaparinux a potential beneficiary of heparin product recalls.
http://www.alchemia.com.au/irm/content/home.html


Alchemia Limited

Alchemia ASX symbol : ACL.AX (Australia)
Alchemia ADR symbol : AEMAY.PK ( Pink Sheets)

Marketcap : 55,9 million A$ ( 52,4 Million US$)
Cash : 20,3 million A$ ( 19 Million US$)
Price : 0,35 A$

Shares on issue: 159,851,513
Options on issue :6,768,931
Top 20 own :62% (3/3/2008)
Employees : 50


Top 20 Shareholders - at 3/3/08
http://www.alchemia.com.au/IRM/Company/ShowPage.aspx?CPID=1216


Insider Transactions
http://au.finance.yahoo.com/q/ait?s=ACL.AX

13 Feb 2008
CEO Peter Smith bought 500.000 shares at 50 cent

13 March 2008
Director Carlo Montagner bought 15.000 shares at 37,5 cent

Pipeline :
http://www.alchemia.com.au/irm/content/pipeline.html


Analyst Reports :
http://www.alchemia.com.au/irm/content/investor_analystreports.html


Alchemia Announces Successful Pre-IND Meeting With the US FDA
http://biz.yahoo.com/bw/080201/20080201005188.html?.v=1


Alchemia announces positive final data from HyCAMP Phase II
http://salesandmarketingnetwork.com/news_release.php?ID=2018509


Transcript of Interview with Alchemia's CEO 15 February 2008
http://newsstore.smh.com.au/apps/previewDocument.ac?docID=GCA00812620ACL


Appointment of Dr Reddy's Laboratories Limited RDY as its marketing partner for synthetic heparin (fondaparinux sodium).
http://investor.biospace.com/biospace?GUID=1898426&Page=MEDIAVIEWER


Alchemia Announces Appointment of Non Executive Director
Fri Mar 7, 8:01 AM
http://ca.news.finance.yahoo.com/s/07032008/34/biz-finance-news-alchemia-announces-appointment-non-executive-director.html


Alchemia Approaching Several Key Milestones in 2008
Tuesday February 26, 8:00 am ET

BRISBANE, Australia--(BUSINESS WIRE)--Alchemia Limited (ASX:ACL - News) today announced its half year results for the six months ended 31 December 2007.

Dr Peter Smith, Alchemia´s Chief Executive Officer and Managing Director, today set out the significant progress the Company had made over the reporting period to advance and de-risk the Company´s drug discovery and delivery platforms, through the completion of a number of highly important initiatives and milestones. The major highlights for the period include:

1.

Fondaparinux Program on Track to Deliver in 2009

Generic fondaparinux remains on track for approval around the end of calendar year ("CY") 2008, subject to review times at the US Food and Drug Administration (FDA).


-- Strong growth in Arixtra(R) sales up 87% to US$200 million, from US$107 million in CY 2006. Once the FDA issue their final letter of approval for the ACS indication (an approvable letter for ACS (acute coronary syndromes) was issued early in 2007) this is likely to have a positive impact on US sales of Arixtra.
-- Alchemia remains confident that its fondaparinux will be the sole generic version of Arixtra.
-- As the only synthetic molecule in the heparin market, generic fondaparinux will not meet the same regulatory hurdles that have delayed other generic heparins of animal origin at the FDA.

2.

HyACT Technology Closer to Market

In early 2008 the Company announced the results of its successful pre-IND meeting with the FDA for the design of the pivotal Phase III study for HA-irinotecan. This important milestone significantly de-risks the program and increases the potential opportunities for partnering and financing. The Company expects to file an IND (Investigational New Drug Application) to commence pivotal clinical trials of HA-irinotecan later this financial year.

3.

Other Highlights

In addition Dr Smith noted the following key achievements:

-- Development of the VAST(TM) 'Universal Library' (UL) remains on track for completion in 2009. The UL will comprise in excess of 10,000 drug-like VAST(TM) molecules and is designed to target the therapeutically rich area of G-protein coupled receptors, GPCRs.
-- The Company has undertaken successful screens against several targets for two international drug development companies using the Company's VAST(TM) compounds, with great success and is currently developing focussed libraries for those companies.
-- Receipt of a key HyACT(R) patent granted in Europe which underpins the HyACT(R) technology and the HA-irinotecan product.
Dr Smith was also delighted with the depth and calibre of the industry experts attracted to the Company's Clinical Advisory Board (CAB) and Scientific Advisory Board (SAB). The CAB comprises experts with research and clinical experience in the field of oncology, and advises on the clinical development of HyACT(R) products. The SAB advises on disease targets for Alchemia's drug discovery technology VAST(TM).

4.

Finances

For the six months to 31 December 2007 Alchemia incurred a net loss after tax of $5.1 million (2006: $6.9 million).

Total revenue for the period was $1.2 million, down from the previous period (2006: $2 million). This decrease is due to the receipt of lower grant revenue and other income. Grant revenue was down due to lower income received from a Federal Government Commercial Ready Grant for the ACL16907 anticancer program.

Operating expenditure of $6.5 million was lower than the corresponding period (2006: $9.1 million), principally because of the reduction in R&D expenditure for the period to $1.3 million compared with the previous period (2006: $3.9 million). This is mainly due to the assumption of fondaparinux manufacturing costs by Dr Reddys.

In July the Company successfully completed a private placement of 19 million shares which raised $14.7 million (net). US institutional interest in this raise was strong and resulted in over 12 million of the shares being placed into that market. The capital raising has significantly strengthened Alchemia's balance sheet, with cash at December 31 of $20.3 million. This should provide sufficient funding to see the company through to receipt of fondaparinux revenues in 2009.

5.

The 2008 Outlook

Commenting on the outlook for the remainder of the financial year Dr Smith noted that the company has a number of significant milestones ahead. "We will continue to report on our progress with our oncology platform, including preparations for Phase III clinical trials for HA-irinotecan, partnering and development of other HyACT(R) based products. For commercial reasons we are unable to give precise guidance on the ANDA filing date for generic fondaparinux but expect this event to substantially increase interest in the stock."

-------

MARC SINATRAS BIOGUIDE: ALCHEMIA

Overview: When Alchemia arrived on the ASX it had two primary assets, its synthetic heparin program and its Vast drug design platform. In 2006, Alchemia acquired Meditech Research, adding the Hyact (from hyaluronic acid) drug delivery portfolio.

With its heparin product close to market, outstanding phase II results from Meditech´s former lead product and two quality platform technologies, Alchemia should be one of the most exciting companies around. Instead its share price, at 50 cents, is languishing near all time lows.

How does Alchemia prick investor interest? What do they need to do to be identified as company likely to generate exciting returns?

Directors: Non-executive chairman, Mel Bridges; chief executive officer, Dr Pete Smith; non-executive directors, Prof Peter Andrews, Dr Julian Clark, Dr Tracie Ramsdale, Nerolie Withnall.

The make-up of the board appears more dependent on Alchemia´s past than it does on its future and, consequently, desirable areas of expertise are missing (see below).


Product Development Programs:
1) Fondaparinux - A generic of Glaxosmithkline´s Arixtra, which is used for the prevention and treatment of deep vein thrombosis. Alchemia will receive a minimum 50 percent of the profit on sales by Dr Reddy´s Laboratories, their manufacturing and North American marketing partner. FDA approval for fondaparinux is expected in late 2008.

2) Hyact drug delivery technology - Works on the premise that many cancers express hyaluronic acid receptors and that existing chemotherapeutics entrapped in hyaluronic acid will target these cancers, leading to better safety and effectiveness.
(i) HA-Irinotecan (formerly, Hycamp) Combines HA and Pfizer´s Camptosar (irinotecan). It has been shown to significantly increase progression free survival in metastatic colorectal cancer patients compared to irinotecan alone. Only one further trial is required before the FDA will accept a new drug application. This trial should begin before 2009 and be completed in three years.
(ii) Hydox and Hyfive are combinations of HA with doxorubicin and 5-fluorouracil, respectively. Both have successfully completed phase I/IIa studies. Development plans for these products are being reviewed.

3) Vast drug development platform - versatile assembly on a sugar template (Vast) new chemical entities are created though the addition of drug-like binding groups to a carbohydrate spine in a defined manner. The performance of initial entities can be used to develop superior ones. VAST is the subject of collaborations with Euroscreen, where leads for two g-protein-coupled receptors have been identified, and with Tetraq, where hits against various opioid receptors have been obtained.

4) Novel antibiotic program - Development of antibiotics that act via a unique mechanism. Results of further preclinical testing are due in the current quarter.
Significant Product Markets: The heparin market was $US4.2 billion dollars in 2006. Various drugs crowd this market, but it is dominated by the low molecular weight heparin, Lovenox (enoxaparin). It had sales of $US3.0 billion in 2006. Sales of Arixtra were $US190 million in 2007. Several new drugs in development have the advantage of being oral. These include the highly anticipated Xarelto (rivaroxaban) from Johnson & Johnson and Bayer, which has outperformed Lovenox in comparative trials. US filing for Xarelto is expected in 2008, while EU filing occurred in 2007.

The colorectal cancer drugs market was $US7.0 billion in 2006. Irinotecan is one of seven approved drugs for patients with metastatic colorectal cancer. Its sales were $US$910 million in 2005 and $US903 million in 2006. In terms of product development, there are numerous compounds in phase II studies, while both Astra Zeneca and Pfizer have compounds in phase III trials. Other companies are combining substances with irinotecan to try and improve safety and efficacy, but Alchemia is the furthest ahead.

Verdict: Alchemia´s fondaparinux should create reasonable cash flows. It is not an easy drug to make and given Alchemia´s manufacturing patents, further generic competition is unlikely. This should allow margins to be maintained. Xarelto is likely to take significant market share from the injectable heparins. However, major pre-operatiion and post-operation markets exist where injectable heparins will be preferred. Fondaparinux should do well in these markets, given its superiority to Lovenox in clinical trials.

HA-irinotecan looks especially promising given the extremely good phase II trial results obtained recently and that only one more trial will be required before registration. Considering the current sales of Camptosar and despite the current and expected future tightening in the market for metastatic colorectal cancer drugs, HA-irinotecan could yield some very significant, low-risk cash flows.

Alchemia already possesses the technology to become an exciting company, but I am not sure its directors have the skill set to make it one. Both Hyact and Vast present an enormous array of opportunities, but without the experience to quickly and accurately choose the best opportunities for each, time will be lost and mistakes made.

The Euroscreen and Tetraq collaborations are evidence that Alchemia is getting its strategy right, while their high quality advisory boards give them access to considerable experience. Nonetheless, the injection of a big dose of experience with international pharmaceutical platform-development strategy to the board should improve the speed and efficiency with which Alchemia´s technologies are commercialized and, consequently, impress upon investors how much value there is in them.

Despite these needed changes, I believe Alchemia is one of the most undervalued ASX listed life science companies, as reflected in my valuation of $1.61 a share.
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