Company Brief - AGX - Agenix

AGX - Agenix

- Undergone refocus in priorty since Dec 2005 when failed to find partnership deal for its development product Thromboview.

- Thromboview is a technology that uses radio-labelled antibodies to find blood clot in bodies. The market is the digital imaging market.

- Technologically, Thromboview is a significant product in its field - does not appear to have direct competitor. More importantly it has shown efficacy (positive results) in Phase II trials for Deep Vein Thrombosis DVT.

- It had previously shown to be successful in Phase Ib trial in Pulmonary Emboli PE.

- It is now in a better position to seek partnership deals. Successful future trails may more like increase the share price significantly, although current success are not reflected in the share price.

- Currently AGX has focussed completely on Thromboview. It has divested its other businesses: "Animal Health" and "Human Health". This focus developing a single product present great risk - if Thromboview is successful, AGX price wil shoot up, on the other hand if the trials fail, that may be the end for AGX.

- Financially, the company may survive for quite a while, it has $6m cash, $7m from divestments, another $3-$5m for sale of diagnostic test business. Cash burn is about $3.6 p.a. Optimistically, it can survive 4-5 years at current burn-rate. Price / NTA = 1.264 is very favaourable compared to other biotechs.

- It has an incredible team in its scientific advisory board. Team score is roughly 7.

- Recently one of its strategy to mitigate the one-product risk is that it acquired a Chinese company that has developed an anti-Hepapititis drug to successful Phase III trial. The company has a GMP manufacturing facility, connections with major Chinese medical universities and may provide a platform for AGX into the Chinese and Asian market.

- Major risks identified here. The AGX announcement indicated AGX's board and advisors have experience in doing business in China. However, there is no clear indication from the public information on the directors that indicate any of them had any associations with any biomedical business with China.

- The Chairman Ravi Govindan is also Managing Director of MatrixView - a software company with data compression technology focussed on the medical sector. He is an entrepreneur in Singapore and may have some limited experience with China. However, in an overall sense, I do not believe AGX as a whole has shown that it is able to understand and deal successfully in China. As a result - its planned acquisition is a significant risk.

- In summary, AGX is a company to watch. If there are further trial success with Thromboview, it may be too late to buy into, since the price would have rocketed. Its planned acquistion of the Chinese company is also something to watch for.

Recommendation: Extreme speculative buy at 10c within the next 3 month, given no significant news or events.