Living Cell expects crucial Parkinson’s clinical trial results in early 2017

Australasian biotech company Living Cell Technologies says it will know the outcome of a make-or-break clinical trial on its regenerative cell therapy for Parkinson's disease in the first quarter of next year.

If the trial succeeds, Living Cell's lead product NTcell will be the world's first disease-modifying treatment for Parkinson's as existing treatments only deal with the symptoms rather than stopping the degeneration of the brain.

The operations of the Australian-incorporated company are based in New Zealand, where it has just launched a Phase 11b clinical trial in Auckland, the last step in securing provisional consent to sell the product to patients with Parkinson's disease next year.

A total of 18 patients under 65 years old will take part in the trial to be run at Auckland Hospital and Mercy Ascot Hospital, with the company having to wait 26 weeks after the last patient is implanted to know whether it has been successful in meeting regulator Medsafe's conditions on quality, safety, and efficacy.

LCT chief executive Ken Taylor wouldn't reveal the trial's cost as it could vary. He's confident, though, a recent $A2.8 million private placement to high-net-worth investors including Sir Stephen Tindall, Gary Lane, and Julian Robertson means the company has sufficient funds to foot the bill.

The company was founded in 1999 by Bob Elliott and David Collinson to develop a regenerative cell therapy that involves transplanting cells from Auckland Island pigs into humans. The initial target was type 1 diabetes, which is now being pursued by a joint venture company in the US, while LCT focuses initially on Parkinson's before considering other central nervous system indications such as Huntington's, Alzheimer's and motor neurone disease.

LCT has already done some work with the University of Auckland's Centre for Brain Research on which should be its next step, with Huntington's looking the most likely. It can't afford to progress trials of other indicators until the outcome of the Parkinson's clinical trial is known.

The company has just reported a 40% reduction in first-half losses, mainly due to accounting changes to losses in its joint venture company, Diatranz Otsuka Ltd.

The net loss for the six months ending December 31 narrowed to $A1.4 million after its half share in DOL was equity-accounted to zero so no future losses will be reported in the statement of profit or loss, the ASX-listed company said. Its share of the joint venture losses during the period was $A70,000, compared to $A1.3 million a year earlier.

Revenue of $A365,545 for the first half of the current financial year was dominated by $A245,244 in research and development grants and was down 53% on a year earlier due to reduced income from services that it is no longer providing to the joint venture since it shifted research and development from New Zealand to the US. LCT has a three-year grant from Callaghan Innovation to meet 20% of its R&D costs.

The joint venture is developing Diabecell, a treatment for diabetes, and the costs of research and development and gaining Food & Drug Administration approvals in the US are being borne by its other 50% shareholder, Japanese-based Otsuka Pharmaceutical Factory. OPF will pay up to $A15 million for licensing rights in the US and Japan as development milestones are met while the joint venture company holds the rights for the rest of the world.

"The diabetes programme is longer and harder and requires more funding so it's appropriate that's done in the US," Mr Taylor said.

During the half LCT forked out a total $A580,000 for the pathogen-free pig herd and manufacturing plant and equipment from the joint venture in order to secure supply of NTCELL for the Auckland clinical trial and beyond. Additional staff have also been recruited.

The company had $A3.6 million cash on hand at balance date but has since boosted working capital from the proceeds of the private share placement and also hopes a Share Purchase Plan open to existing investors until March 11 will reap around $A1 million, the amount raised in an SPP last year.

Taylor said that will give the biotech company sufficient funds to last another year.

He said Living Cell was ahead of competitors in bringing cell therapies for neurodegenerative diseases to the market.

Living Cell's share price is currently languishing around 5Ac.

(BusinessDesk)

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