Research group puts faith and cash into drug

Jul 23 2008 by Chris Knox, The Journal

DESPITE racking up annual losses of £2m, a drug research company expects to hit the headlines when its cancer drug goes to market in five years’ time.

Newcastle’s e-Therapeutics believes it has the potential to become a £100m business once it perfects a treatment for a wide range of cancers, including those of the skin, breast and colon.

The prediction came as the firm posted full-year pre-tax losses, which have increased to more than £2m from £1.15m a year ago.

However, the three-year-old Newcastle University spin-out is keen to stress its financial position is on target and that the figures should not be seen as a loss, but as a mark of its heavy investment in a potentially lifesaving drug.

The figures show the firm’s administration expenses more than doubled from £1.15m to £2.39m during the year, which accounts entirely for the losses.

A sizeable cost was also attributed to its launch on AIM last month, which allowed it to raise £1.33m to fund its research and development work.

Chief executive Professor Malcolm Young believes the cancer drug will make the front pages when it finally goes to market, much like Abiraterone, which yesterday attracted attention when The Institute of Cancer Research said it had the potential to treat up to 80% of prostate cancer patients. Prof Young said: “We are close to completing second phase tests on a number of new drugs.

“However, these processes take time and we have to be very careful as to when we launch them on the market.

“This process has led to a lot of investment on our part, which is evident in the figures.

“Every pharmaceutical company in the land starts their life in this way.

“However, we know the drug works and are looking forward to a sizeable pay-off.”

He cites a number of recent deals which show the levels of business that can be achieved in the sector, including a $1.1bn contract won by GlaxoSmithKline and Synta Pharmaceuticals to develop and sell a treatment for melanoma, a form of skin cancer.

The firm, which was set up in 2005, is also developing treatments for MRSA, asthma, depression, high cholesterol, diabetes and pain control.