Colorectal cancer test developed

Pacific Edge Biotechnology says it is making progress in developing cancer test products but will need more funds before commercialisation.

The Dunedin-based NZX-listed company has completed the first phase of development of a prognostic test for colorectal cancer. The test aims to identify the risk to the patient of the tumour aggressively spreading to other parts of the body.

Pacific Edge is now entering into clinical trial discussions with third parties, but the trials could take up to two years to complete depending on patient recruitment.

The company said 1.1 million new cases of colorectal cancer are identified worldwide each year, with more than 530,000 people expected to die this year.

Chief executive David Darling said he was not aware of any competition for the test in the market place. A similar test for breast cancer costs more than US$2000 ($2945).

The company has two options for commercialising products. It can complete the clinical trials itself and take the products to market or it could license products to other parties to commercialise, with Pacific Edge receiving fees, royalties and milestone payments.

Darling said several early-stage offers had been received but the company was planning to complete the clinical trials itself and capture greater market value for shareholders.

Pacific Edge was founded in 2001 to commercialise cancer research taking place at the University of Otago, which retains a cornerstone stake in the company based in the University's Centre for Innovation.

Without any products in the market place the company posted a net loss of $2.85 million for the year ended last March and there is no indication yet when it will generate a positive cash flow.

However, Darling said, the company had supportive shareholders who were "not the sort of people who are needing a 5c rise in the share price so they can trade out of them".

Before commercialisation, the firm expected to raise more capital, which was a challenge, he said.

Venture capitalists could be reluctant to invest in publicly listed companies due to the removal of an exit strategy.

The pool of funding had grown significantly, Darling added.

"But it's still not easy to get. There's definitely a trend of companies seeking venture capital funds from the US."

The company's other main product is a bladder cancer test called uRNA, for which patient recruitment for clinical trials is expected to start in June.

The test for bladder cancer, the ninth most common cancer, will have two uses - early diagnosis and monitoring for recurrence after treatment.

The test for early diagnosis could reach commercialisation within four months of patient recruitment.

The clinical trial for the recurrence test is likely to take at least two years.

PACIFIC EDGE BIOTECHNOLOGY

* Develops cancer testing products.

* Listed on the stock exchange in 2002.

* Net loss of $2.85 million for the year ended last March.