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    A biotech pioneer making his future
    By TANIA BAWDEN
    30aug03

    DURING much of his lifetime, John Smeaton has seen the brave new world of biotechnology and genetic engineering start to unfold.
    Now he can see the benefits more clearly.

    Not only is the science making progress, but so are the companies which have struggled to develop it.

    His company BresaGen's pioneering work on human stem-cell research and earlier work in genetic modification in pigs to develop organs for human transplants have moved closer to reality.

    BresaGen has its sights set on becoming a world player in the emerging field of protein pharmaceuticals.

    However, the path has been littered with big disappointments and difficulties.

    In 16 years as managing director of BresaGen, the Adelaide University spin-off has faced funding constraints, research dead-ends and a long-running dispute with the Australian Tax Office.

    "I guess you could say, we've had a chequered past," Dr Smeaton said.

    Earlier this year, the future of the Adelaide-based listed biotech looked dire.

    Dr Smeaton was due to stand down as managing director as BresaGen headed towards an end to its research funding.

    The shares slipped to one-third of their $1 issue price with a financial crunch time forecast for December.

    But a bold corporate restructure – involving a move offshore to seek US funding – has breathed life back into the company's vision.

    It also could be a lifeline for the company's new $9 million manufacturing facility at Thebarton which is capable of making protein pharmaceuticals to world standards.

    "If it just stayed here (in Adelaide) toddling along, it could become a steady, solid business but not become a major drug business," Dr Smeaton said.

    "We have got some very talented people here and modern research and development facilities which will be fully utilised with overseas growth."

    The restructure aims to allow BresaGen to produce the company's first "blockbuster" generic peptide (small protein) drug to treat osteoporosis.

    "I can see it (BresaGen) turning over several hundred million dollars within five years," Dr Smeaton said.

    Additional funding would also target getting a second drug – involving other common ailments such as diabetes – to market by 2006-07.

    "We remain a proudly Australian company but BresaGen must look outside Australia for future raisings," he said.

    "We hope these first couple of drugs will be made here and mean a major expansion for South Australia."

    The projected $US22 million ($34 million) capital raising coincides with BresaGen's shares becoming eligible for level-two trading on the Nasdaq exchange – another route to valuable funds for research and development.

    Over time, both the protein drug developments and cell therapy businesses will transfer to BresaGen's existing operations in Athens in the US state of Georgia.

    But the flow-on effect back to the BresaGen holding company in SA could be great.

    "We need the funding exposure to really take advantage of what we have got here," he said.

    The company made its first move to the US in 2000 when it bought a sister biotech company, CytoGenesis, located in the University of Athens. This took Dr Smeaton back to the US where he had already spent more than 14 years of his early career.

    "I enjoy living in both places and they have different advantages," he said.

    "You get a real buzz in the US. It's a function of the size and there is very much more of the can-do attitude."

    BresaGen is at the forefront of the worldwide race to unlock the potential for using replica human stem cells to treat diseases of the central nervous system, such as Parkinson's.

    Last year, the Bush administration cleared four of its embryonic stem cell lines for National Institutes of Health funding to promote the research.

    The son of an English banker who migrated to Australia in 1949, Dr Smeaton has always had big ideas.

    In his spare time, his hobbies are building his own aeroplane and analysing the technology of motor sport, including Formula One racing.
 
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