openbriefing.com
Bionomics Limited (ASX: BNO) has recently released its 4C for the December quarter. Could you outline the main points and the outlook?

CEO & MD Deborah Rathjen
Cash at 31 December was $8.475 million in line with expectations. Net cash outflow for the quarter was $2.078 million, in line with expectations and with the previous quarter. Outflows included clinical trial costs for the two BNC210 European trials initiated in October. The clinical component of the trial which compares BNC210 to Lorazepam was also completed in the quarter.

Inflows were higher for the December quarter at $1.448 million vs. $1.092 million for the previous quarter reflecting increased US dollar payments from Merck Serono under our collaboration agreement and increased Euro revenue from the contract services business of our European subsidiary Neurofit.

We expect to further strengthen our cash position through the sale and lease-back of our research facility in the coming months. Agents have been engaged and marketing of the property will commence shortly. The book value of the property is $7.3 million and our outstanding debt to the Land Management Corporation of the South Australian Government is $2.45 million. The sale and lease-back will free up capital to further support our clinical programs and for us to execute our partnership strategy.

openbriefing.com
The company is expecting results to be available for its Phase II trials of anti-cancer agent BNC105 and its Phase Ib trials of anxiety and depression drug BNC210 in the first half of CY2011. Can you update us on the progress of these trials?

CEO & MD Deborah Rathjen
Bionomics has four clinical trials in progress with each anticipated to yield data in the short term. This is a particularly interesting and important time in the company’s history.

Two BNC105 trials are in progress, one trial in patients with metastatic renal cancer which is being undertaken in association with the Hoosier Oncology Group in the US; the other trial is in patients with mesothelioma undertaken by the Australasian Lung Cancer Trials Group across Australia. Due to the withdrawal of patients over the holiday period, the consequent need to identify replacements and the inability to amend the structure of the trial to accommodate new patients without impacting the timing of results, the renal cancer trial is now anticipated to report initial data after 31 March. Two new clinical trial sites were initiated in January in New York and New Mexico which are expected to contribute strongly to recruitment. The mesothelioma trial is recruiting strongly and will report interim data in the second quarter. BNC105 has been well tolerated by patients in both the renal cancer and mesothelioma trials with some individual patients continuing on treatment for over 9 months.

We anticipate data from both the BNC210 Phase Ib trials this quarter. One trial is evaluating the effectiveness of BNC210 to overcome symptoms of panic induced by the administration of a peptide CCK-4, while the other trial will contrast the side-effects of a valium-type drug Lorazepam with the very clean side-effect profile of BNC210. Lorazepam has all the typical side-effects associated with the benzodiazepine class of drugs such as sedation and memory loss. BNC210 is a pioneering “first in class” drug which to date has been shown to be free of these troubling side-effects. Preclinical data has shown that BNC210 overcomes the heightened anxiety induced by CCK-4 administration in animals.

openbriefing.com
How significant are these trials to Bionomics’ development strategy and to its ultimate commercialisation strategy?

CEO & MD Deborah Rathjen
Bionomics strategy for BNC105 is to partner with Phase II clinical trial data. The initial and interim data coming from the renal cancer and mesothelioma clinical trials over the next few months may underpin BNC105 as a successful treatment of solid tumour types and achieving a valuable partnership. If the interim analysis from the mesothelioma clinical trial is positive we will talk to the FDA about fast track designation for BNC105 and the requirements for approval of BNC105 for the treatment of mesothelioma. These would add substantial value to the BNC105 licensing package.

The current BNC210 clinical trials and the already completed trials will provide the platform for continued development of BNC210 for treating different forms of anxiety and depression as well as related conditions. The CCK-4 trial has the potential to give an early indication of the usefulness of BNC210 in reducing the symptoms of panic and anxiety, paving the way for randomised Phase II trials. Success in the current trials would position us well in partnership discussions.

openbriefing.com
Edison Investment Research recently upgraded its valuation of Bionomics based on the improved competitive position of BNC105. What potential advantages does BNC105 have in the market for vascular disrupting agents? What is the size of this market?

CEO & MD Deborah Rathjen
Edison Investment Research has increased its valuation of Bionomics to $235 million, or 73 cents a share, based on the improved competitive position of BNC105 following the failure of Novartis’ ASA404 in clinical trial. Among its advantages BNC105 has a well defined mechanism of action and importantly is the first of the VDAs to show “on target” activity in cancer patients. The high level of selectivity BNC105 has for the blood vessels which feed solid tumours clearly differentiates BNC105 from the most advanced VDAs in development. Selectivity for cancer blood vessels provides BNC105 with a broader therapeutic window than its competitors with the potential for fewer side-effects. When this high level of selectivity is combined with the ability of BNC105 to cause direct cancer cell killing it gives rise to a very potent anti-cancer agent.

BNC105 has the potential to treat all solid tumour types so the market opportunity for BNC105 is very large and can be compared to that of Avastin. Avastin targets newly forming blood vessels within solid tumours. BNC105 targets both established blood vessels and newly forming tumour blood vessels. In 2009 worldwide sales of Avastin were approximately US$5 billion.

openbriefing.com
Your recent presentation lodged with the ASX provided an update on Bionomics’ pipeline which now includes an Alzheimer’s disease program. Could you elaborate on this program?

CEO & MD Deborah Rathjen
The new program has been incubated over 2010 and has drawn on the expertise in CNS models and resources of our subsidiary Neurofit to discover compounds which modulate the function of an ion channel called the alpha 7 nicotinic acetylcholine receptor. Switching on this receptor improves memory. Compounds which switch on the receptor have potential applicability across a broad range of conditions including Alzheimer’s disease, schizophrenia, Attention Deficit Hyperactivity Disorder (ADHD) as well as mood and anxiety disorders.

The program is very well matched to our ionX® drug discovery platform and we have already been able to identify compounds which modulate the receptor to restore memory in animals whose memory has been lost through treatment with an agent called scopolamine. Our aim with this program is to identify compounds with the potential to become drug candidates and to seek an early stage partnership similar to our Merck Serono collaboration in Multiple Sclerosis.

openbriefing.com
The tender process for the sale of Start-up Australia Ventures’ 27.76% shareholding in Bionomics is scheduled to close on 31 March 2011. Do you have any indication of the likely outcome of this process?

CEO & MD Deborah Rathjen
The tender process is being conducted by Start-up Australia Ventures. The company is not involved in the tender process, which may or may not result in a bid for the company. We are continuing to execute Bionomics established business strategy and are committed to securing partners for our key compounds, encouraging all parties with an interest in partnering BNC105 and BNC210 to work with us. The Board believes that Bionomics has a strong and exciting future as an independent company and is well positioned to deliver value to its shareholders. The continued progress of BNC105 and BNC210, building value in our pipeline and executing our partnership strategies are the foundations of that.

openbriefing.com
Thank you Deborah.