GlaxoSmithKline advance gives Proteologics cash flow

Proteologics has a market cap of NIS 87 million, a negative return of 41% on its IPO price ten weeks ago.

23 May 10 16:51, Shiri Habib-Valdhorn

Although drug development company Proteologics Ltd. (TASE: PRTL) still has no revenue, it reported a positive cash flow from operations of NIS 9.6 million from a $3 million advance payment by GlaxoSmithKline plc (NYSE; LSE: GSK) for the company's joint development of a cancer treatment.

GlaxoSmithKline owns 5.3% of Proteologics, which also has a drug development agreement with Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA).

Ten weeks after its IPO, and given the tumble in stock markets around the world, Proteologics is traded at a market cap of NIS 87 million, a negative return of 41% on its IPO price. The share fell 6% today to NIS 5.25.

Thanks to the IPO, Proteologics had NIS 66.6 million in cash and cash equivalents at the end of March, of which NIS 46.6 million was in cash. The company spent nearly NIS 2 million on R&D during the first quarter and another NIS 1.6 million on general and administrative expenses. The company's net loss was NIS 5 million (NIS 0.53 per share) for the first quarter, compared with NIS 5.3 million for the corresponding quarter of 2009.

Proteologics is exploiting the ubiquitin system for the discovery and development of novel therapeutics. The ubiquitin system is the body's mechanism for breaking down proteins.

Published by Globes [online], Israel business news - www.globes-online.com - on May 23, 2010

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