ANTISENSE THERAPEUTICS LIMITED INVESTOR UPDATE

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ANTISENSE THERAPEUTICS LIMITED INVESTOR UPDATE
                                                                                   February 2003


Dear Investor                        for Phase I clinical trials       oversubscribed shares
I am pleased to report that          of ATL1102 and receipt            offer.
Antisense Therapeutics               of approval on 4
                                                                   And finally, our strategic
Limited (ATL) has made               February 2003 to
                                                                   partner, Isis
substantial progress since           conduct this trial;
                                                                   Pharmaceuticals Inc
the June 2002 Investor
                                 •   completion of                 announces important
Update. The highlights
                                     manufacture of                advances in the field of
described in this edition of
                                     ATL1102 for use in            antisense therapeutics.
Investor Update include:
                                     Phase I and later
                                     clinical trials;
•   the successful
    completion of a package      •   ATL1101 lead
    of pre-clinical animal           compound for psoriasis
    trials of ATL's drug for         selected in Q3 2002, on
    the treatment of multiple        schedule; and
    sclerosis, ATL1102;          •   successful raising of         Mark Diamond, CEO
•   confirmation of the site         $4.5 million in an



ATL1102 for the treatment                         Charterhouse Clinical Research Unit at the
                                                  Stamford Hospital in London
of Multiple Sclerosis                             (“Charterhouse”) to conduct the Phase I
                                                  clinical trial to assess the safety and
Development Status                                behaviour (pharmacokinetics) of ATL1102
In October 2002 ATL announced the                 in human volunteers. On 4 February 2003,
successful completion of a package of pre-        approval was received from Charterhouse
clinical (animal) studies, which has enabled      to conduct this Phase I study.
ATL to progress arrangements to start
Phase I clinical trials of its product ATL1102    The Phase I trial is expected to commence
for multiple sclerosis (‘MS’).                    on schedule in March 2003.

The results of the studies on the safety and      Manufacturing Status
properties of ATL1102 administered to             The production of injectable formulations of
animals have demonstrated the exciting            ATL1102 suitable for use in Phase I clinical
prospect of dosing human subjects as              trials was contracted out to a US company.
infrequently as once a week or less
frequently, the likelihood of which will be       Four formulations are now ready for use in
determined in the Phase I clinical trials.        the trial comprising two different
                                                  concentrations of the antisense drug
In December 2002, ATL applied to the              ATL1102 and two preparations of matching


                                                                                 (Continued on page 2)
(Continued from page 1)
placebo, which have the same basic              The ATL1101 lead compound was
composition but lack the active                 selected in the third quarter of 2002 on
compound, ATL1102.                              schedule and in line with forecasts made
                                                in ATL’s 30 June 2002 annual report. Pre-
The final steps before shipping the             clinical efficacy studies are currently
formulations to London for the conduct of       underway.
the Phase I study are quality testing and
assessment of the stability of the              A topical formulation containing ATL1101
preparations which are currently under          has been prepared for this lead
way at a contract organisation in the USA.      compound using Isis Pharmaceuticals, Inc
                                                proprietary formulation expertise for use in
Quality testing involves evaluation of the      pre-clinical studies.
formulated product to ensure it meets the
product specifications and stability testing    Outlook
is important to establish a shelf life of the   Upon the successful completion of the
formulated drug.                                pre-clinical efficacy studies, ALT1101 will
                                                be poised to enter the next stage of pre-
Outlook                                         clinical toxicology studies. These
Upon the successful completion of the           toxicology studies are anticipated to
Phase I trial, it is anticipated that an        commence during 2004.
application will be made in 2004 for a
Phase IIa trial to assess preliminary           About Psoriasis and ATL1101
efficacy in patients with MS.                   Psoriasis is a chronic, non-contagious
                                                skin disorder, which affects 2% of the
About Multiple Sclerosis and ATL1102            population.
Multiple Sclerosis (MS) is a life-long
chronic, incurable disease, which               Although the worldwide market for
progressively destroys the central nervous      Psoriasis treatments was more than
system, commonly diagnosed between              US$500 million in 2000 and is forecast to
the ages of 20 and 40 years.                    exceed US$2 billion by 2007 (Frost &
                                                Sullivan), there is an acknowledged need
MS affects about 350,000 people in the          for more effective and safer treatments
US where the estimated annual cost of           than those currently available.
the disease is more than US$2.5 billion.
Although current treatments are unable to       ATL’s candidate for Psoriasis treatment is
slow disease progression, the aims of           ATL1101, an antisense compound
therapy are to reduce the duration,             designed to block the production of a
frequency and severity of attacks.              protein involved in the regulation of cell
                                                growth in Psoriasis.
ATL1102 is a drug under development by
ATL, which aims to prevent the synthesis
of a protein called VLA-4 known to play a       Other Projects
part in both the onset and progression of
MS.                                             ATL has several other antisense projects
                                                in its research portfolio including
                                                compounds directed at treating
ATL1101 for the treatment                       gastrointestinal, cardio-vascular,
of Psoriasis                                    inflammatory, immune and viral diseases
                                                and growth disorders. ATL intends to
                                                announce details of the specific disease
Development Status                              indications together with the lead
ATL1101 is being developed by ATL in            compounds upon successful completion
collaboration with research partner the         of pilot animal studies and once the
Murdoch Childrens Research Institute.           relevant patent applications have been


                                                                           (Continued on page 3)
(Continued from page 2)
lodged.                                       pre-clinical testing.
Development Status & Outlook                  As previously announced, ATL is on track
Six lead antisense compounds have been        and on budget to meet these milestones.
produced for ATL since its listing in
December 2001, for disease targets            In December 2002, ATL successfully
relevant to the treatment of viral, skin,     raised additional capital of $4.5 million
growth and inflammatory disorders. Pilot      (with the issue of 60,275,268 shares), in
efficacy studies in animals are underway      an oversubscribed offer, for the purpose
for two of these compounds.                   of funding the next stage in the
                                              development of these key lead
Additional pilot efficacy studies are         compounds and to progress the pipeline.
expected to be completed by the end of        This share issue was approved by
the 2003 financial year. A select number      shareholders of the company at a general
of successful candidates may then be          meeting.
progressed into formal pre-clinical
development including animal toxicology       Queensland Investment Corporation, an
studies.                                      active institutional investor in the
                                              biotechnology sector, became a
                                              substantial shareholder of the company
Recent Shares Offer                           with the acquisition of 14 million shares in
At the time ATL listed on the ASX             the share placement for $1.05 million
(December 2001), the prospectus               giving it a 5.1% interest in the company.
indicated that total proceeds raised of
$13.6 million would be sufficient to fund     Other major participants in the issue were
the Company’s activities until early 2003,    existing shareholders Circadian
at which point ATL’s candidate drug for       Technologies Limited and Isis
the treatment of Multiple Sclerosis,          Pharmaceuticals Inc who were issued
ATL1102, would reach the stage of             10,333,333 shares for $775,000 each.
Phase I clinical trials and ATL1101 for the   Circadian’s and Isis’s interests in the
treatment of Psoriasis would enter            company are now 23.5% and 14.6%
                                              respectively.


                                              Phase I – a relatively small number of
 What are the Steps                           healthy volunteers are treated to test the
 in drug testing?                             safety of a new drug.

                                              Phase II – selected patients showing a
 1. Pre-clinical trials                       number of common features, such as
 These are performed in animal models         age, sex and severity of the disease
 to test toxicity and efficacy of the drug    participate in trials to establish the
 and properties related to its uptake,        effectiveness of the drug.
 distribution and metabolism. The
 outcomes of pre-clinical testing             Phase III – large numbers of patients
 determine whether clinical trials will       from the ‘clinical setting’ who are widely
 proceed and also influence the               representative of the patient population
 conditions selected for clinical trials.     are enrolled in the trial. Patients come
                                              from all walks of life, often from a
 2. Clinical trials                           number of participating centres.
 All clinical trials involve testing on       The aim of Phase III trials is to
 humans whose participation is voluntary.     determine whether a new treatment is
                                              any better than the standard treatment in
 There are three levels:                      a direct comparison of the two.
ANNOUNCEMENTS FROM ISIS SPELL GOOD                                About Antisense
NEWS FOR ANTISENSE-BASED DRUGS                                    Therapeutics
                                                                  Antisense Therapeutics Ltd
                                                                  is an Australian publicly
Successful tests on a new oral formulation                        listed (ASX: ANP)
of Isis anti-inflammatory drug                                    biopharmaceutical drug
Until recently, antisense inhibitors, similar to most             discovery and development
biologically derived medicines, could not be                      company.
delivered orally in the form of a tablet, capsule or              ATL’s mission is to create,
powder.                                                           develop and commercialise
Recognising the benefits of delivering drugs in this              novel antisense
convenient form, Isis has committed considerable                  pharmaceuticals for large
resources to producing a new, second generation of                unmet markets. Its two most
antisense formulations that can be administered                   advanced projects target
orally, making them more acceptable to patients                   Multiple Sclerosis
than an injectable treatment.                                     (ATL1102), and Psoriasis
                                                                  (ATL1101).
In November 2002, Isis announced the successful
completion of a Phase I study of its capsule form of              The Company’s access to
an anti-inflammatory antisense drug. The plasma                   these projects is derived
concentrations reached by the drug were indicative                from its technology and
of tissue concentrations being high enough to                     research collaborations with
produce a therapeutic benefit.                                    Isis Pharmaceuticals Inc.
                                                                  and the Murdoch Childrens
This study is a watershed not only for being the first            Research Institute.
antisense research program to overcome what was                   California-based Isis is a
thought to be a significant technical hurdle, but also            world leader in the field of
for dramatically broadening the therapeutic and                   antisense drug technology
commercial potential for antisense compounds.                     and has a market
The data indicates that other second generation                   capitalisation of
compounds have the potential for oral                             approximately US$276
administration, which obviously would provide a                   million.
significant advantage over other types of                         The collaboration agreement
administration. We will pursue an oral dosage form                with Isis provides ATL with
as development of ATL1102 progresses.                             extensive access to Isis’s
Treatment Groups from a Phase III trial of an                     antisense drug discovery
anti-cancer drug about to be revealed                             technology of relevance to
                                                     TM
                                                                  the treatment of viral, skin,
The Isis investigational anti-cancer drug Affinitac               growth and inflammatory
(a trademark of Eli Lilly) is the subject of two                  disorders. ATL plans to
Phase III trials for the treatment of non-small lung              commercialise its pipeline via
cancer. One of these involves a comparison of                     licensing/collaboration
         TM
Affinitac with two treatments currently in use,                   agreements with major
carboplatin and paclitaxel.                                       biotechnology and
Isis has announced that the findings from this trial              pharmaceutical companies.
will be analysed in March.                                        ATL’s major shareholders
Positive results will provide the basis for a new drug            include Circadian
application (NDA) to the US Regulatory Agency:                    Technologies Limited (ASX:
Food and Drug Administration. An announcement of                  CIR), Isis Pharmaceuticals
the successful completion of this pivotal study                   Inc. (NASDAQ: ISIS),
should have a significant positive impact across the              Queensland Investment
whole antisense sector.                                           Corporation and the Murdoch
                                                                  Childrens Research Institute.

Contact Information:    Website: www.antisense.com.au
                        Managing Director - Mark Diamond +61 3 9827 8999
                        Investor Relations - Natalie Korchev +61 3 9827 8999