Key points

• Acquires additional antibody assets
• Second M&A transaction in 2006
• Strengthens oncology franchise
• Purchase consideration of GBP 2 million plus a contingent payment of GBP 2.85 million

Australian biotechnology company Peptech Limited (ASX:PTD) continues to pursue its determined merger and acquisition strategy today announcing its second acquisition for the calendar year with the acquisition of the antibody assets of UK based Scancell Limited through its newly established UK subsidiary, Peptech UK Limited.

The acquisition, in which Peptech assumes control of cancer therapeutic antibodies and related intellectual property from Scancell, provides further validation of Peptech's aggressive growth strategy announced in January this year. The acquisition is consistent with its internationalisation strategy and builds upon the recently announced intention to list on AIM in London.

Peptech acquired Scancell’s two pre-clinical lead cancer-related antibodies, SC101 and SC104, along with a suite of additional anti-cancer antibodies in the early stages of development.

SC101 and SC104 target colorectal cancers, a significant unmet medical need with a market estimated to exceed US$3.2 billion.

Peptech Chief Executive Officer Dr John Chiplin said the additional antibodies substantially strengthened Peptech’s existing cancer product pipeline and substantiate further the company’s recent decision to list on AIM in order to strategically exploit opportunities in Europe.

“The two newly acquired lead antibodies have demonstrated promising preclinical results that can be correlated with direct cancer cell killing properties,” Dr Chiplin said.

“It is our intention to utilise these antibodies to provide additional strength to our existing oncology development program, which includes our relationship with Biosceptre International, to create a world-class anti-cancer franchise.”

“This is an excellent deal for Scancell” said Scancell’s scientific founder, Prof. Lindy Durrant. “The deal with Peptech will enhance the prospects of these exciting antibodies reaching the clinic and improving cancer treatment. Moreover it will allow Scancell to focus its efforts on its innovative ImmunoBody cancer vaccine programme"

The initial consideration will be a cash payment of GBP2 million. Peptech will make a further payment of GBP2.85 million upon any of the acquired products reaching a Phase I clinical trial, to be paid by either cash or shares, at Peptech’s discretion.

Occurring just six months after the acquisition of Promics which strengthened Peptech’s anti-inflammatory franchise, the Scancell acquisition provides Peptech with expanded options in the treatment of various cancers.

“There is a substantial medical need for new cancer products across the world and these new antibodies will provide us with the ability to enter large and growing markets for new therapies in lucrative cancer markets currently estimated to exceed US$30 billion,” Dr Chiplin said.

“By further developing the more advanced lead compounds in our Sydney facility, and continuing the research effort in the UK to further evaluate the suite of less advanced anti-cancer antibodies, we build upon Peptech's strong expertise in evaluating and developing antibody products.”

About Peptech:

Peptech Limited focuses on the research and development of peptides and proteins in the areas of human pharmaceuticals and animal health. The company is positioned to become a globally recognised leader in biopharmaceutical development.

For further information: www.peptech.com

About Colorectal Cancer:

Colorectal cancer is the cancer with second or third highest incidence in both US and Europe. About 155,000 new cases of colorectal cancer and 24,000 cases of stomach cancer are diagnosed each year in the USA, in Europe about 381,000 cases of colorectal cancer were diagnosed in 2004. The market for drugs treating colorectal cancer was about $US3.2 billion in 2004, about 13% of global oncology sales.