TRANSCRIPTION OF FINANCE NEWS NETWORK INTERVIEW WITH CBIO MANAGING DIRECTOR AND CEO, JASON YEATES
Clive Tompkins: Hello Clive Tompkins reporting for the Finance News Network. Joining me for the first time from CBio is managing director and CEO Jason Yates. Jason welcome to FNN. Can you start by introducing CBio, what do you do? What facilities and how many staff do you have?
Jason Yeates: Thank you for having me here today Clive and allowing me to introduce CBio. CBio is an Australian bio tech company. We’re based in Brisbane, we have 26 staff – mainly scientific graduates and PHD students. CBio is currently developing a new drug. That drug is going to be used for treating autoimmune and inflammation diseases such as Rheumatoid Arthritis, Psoriasis, Lupus etc. We have a very strong board and we believe that we are developing something very exciting.
Clive Tompkins: Your focus is on developing new products for the treatment of autoimmune and inflammatory diseases. What diseases are we talking about and what is the potential for each?
Jason Yeates: XToll is a drug that we’re targeting for the autoimmune and inflammation disease market. A number of auto immune diseases are Rheumatoid Arthritis, Psoriasis, MS, Lupus, Crohn’s disease and others. That market is estimated to be $23 billion by 2011 and the three leading therapies in that market will actually make up about $20 billion of the global sales in that market in 2011. So there is a significant opportunity here if you can compete against those leading therapies which we believe our drug has the potential to do. We’re first developing XToll to treat Rheumatoid Arthritis. Rheumatoid Arthritis affects about 2 per cent of the world’s population, it’s a chronic disease, it’s a horrible disease, people can’t get out of bed in a morning, they can’t open door handles, the disease is just a significant impediment to a quality of life that you would wish that they could have. So we’re targeting that market, it’s also the largest market in the inflammation and autoimmune field. In 2008 the global sales for RA therapies alone was about $11 billion.
Clive Tompkins: Your plan is to collaborate with major pharma to bring XToll to market, how far off is such an event and why the need to collaborate?
Jason Yeates: CBio is an early stage drug development company. We’ve taken XToll from research to early drug development stages. To take it any further we would need a collaboration with a major pharma company purely because of the resources it takes to take a drug to market. CBio has granted Novo Nordisk, a leading Danish pharmaceutical company, an option to license XToll the product at the completion of this current clinical trial.
Clive Tompkins: So what about Patents, are these approved or in the process of being approved?
Jason Yeates: We have a significant patent portfolio. We have 42 patents that have been issued and we have a further 83 patents that are provisional and we are waiting for them to be heard by the various patents offices in the major territories around the world. We have just recently actually received a notice of allowance of our key patent, the cornerstone patent for XToll, in the U.S. which is the largest market. And we believe that, that patent will also be granted in the other major jurisdictions within the next 12 to 18 months.
Clive Tompkins: And what about your competition?
Jason Yeates: Our immediate competition will be the anti TNFS in the RA field and market. We believe that our product has the potential to be safer, and at least as effective, as those competitor drugs in that market. Also the way in which our drug works we believe that it can be used as a drug for other disease states. So we believe there’s lots of potential with our drug, we believe it’s going to be a safer drug and certainly equally as effective as the current competition in those markets.
Clive Tompkins: You’ve just announced a capital raising, how much are you looking to raise and where will the money go?
Jason Yeates: We are looking to raise a minimum of $25 million. The $25 million will allow us to complete the current clinical trial and do ‘value-add’ parallel development projects. We believe they are going to be very valuable when we’re at the negotiation table when we’re negotiating to collaborate with big pharma at the completion of the current clinical trial.
Clive Tompkins: I believe as part of the raising it’s CBio’s intention to list on ASX towards the end of the year. Is that correct?
Jason Yeates: That is correct. It is our plan to list on the ASX by the end of the year. But that’s obviously subject to the market conditions and also the interest that we hope to find in relation to investors in the IPO.
Clive Tompkins: CBio reported a loss of $7.3 million for the six months to the 31st of December 2008. Was this within budget and is this normal for a company at your stage of development?
Jason Yeates: CBio at the moment, we are undertaking our largest clinical trial we have to date, it’s certainly very costly, we were within budget last year and we will be within budget again this year. It is as I say a very costly stage of development at the moment and I do believe that the costs that we’re incurring as a company would be very similar to other companies who have a drug at this stage of development.
Clive Tompkins: So where has funding come from to date?
Jason Yeates: To date we’ve had a significant number of funds that have come from mums and dad’s and sophisticated investors. At this stage we don’t have any venture capital or institutional funds in the company. We have an extremely loyal shareholder base, over the years they have continued to tip in allowing us to continue the drug development stages for XToll which has been fantastic. But we’re at a stage now where we need to go and access the institutions. So that’s why were looking at doing an IPO, it allows us a greater capital market reach out there for us, and that’s why we’re looking at ‘IPO’ing’ towards the end of the year.
Clive Tompkins: Last question. Where do you see CBio in 12 months?
Jason Yeates: In 12 months I see CBio having completed recruitment into the current clinical trial. We will have approached U.S. regulators to ensure that our development plan beyond the current clinical trial is appropriate for clinical trials in the U.S. and other international sites. We will also look at doing scale-up of our production and we will also be looking at continuing our scientific research into the way in which our unique technology works. I think that if we can achieve all that in the next 12 months which we plan to, we will be in a very, very good position to start discussions with multi-national pharma’s for a collaboration.
Clive Tompkins: Jason Yeates thanks for introducing CBio.
Jason Yeates: Thank you for having me.
