BioWorld International Correspondent

SYDNEY, Australia - John Majewski has started what might be the last round in a long personal battle to develop an HIV drug by launching an initial public offering to raise funds for trials and commercialization of the drug in China.

Majewski is CEO and founder of Sydney-based Narhex Life Sciences, which last week announced it will sell 25 percent of its capital to raise A$8 million (US$6 million), by issuing 40 million shares at A$0.20.

The money will be used to complete Phase II and III trials for a protease inhibitor, called Nar DG 35 Prodrug, and, assuming the trials go well, to gain approval from the Chinese State Food and Drug Administration (SFDA). The company also will manufacture the drug in China.

IPO documents state that Narhex has an agreement with CMC Shaanxi, controlled by the Chinese Ministry of Foreign Trade, to see the drug through clinical trials. Such is the company's confidence in its drug that it has set aside $3 million from the funds raised to buy an SFDA-registered company to manufacture it.

The cost of trials and commercialization in China is far less than Australia. The drug does not have the backing of a major pharmaceutical company, and Majewski previously has declared that he would not sell out.

He also has also declared that he is a man who doesn't like to quit.

When BioWorld International first reported Majewski's drive to develop Nar DG 35 in 1998, Australian scientists who had tested the drug declared that it had potential. (See BioWorld International, Feb. 25, 1998.)

Since then, among other efforts to get the drug commercialized, Majewski has raised money through an Australian tax-shelter scheme for clinical testing in Brazil. Narhex also was in voluntary administration - something similar to bankruptcy - for several months last year, before adding financial support that allowed it to emerge.

Majewski said that once the drug is registered in China, other Second and Third World countries also might permit its use, including those with substantial HIV problems. Once the drug has been on the market for some time, the developed nations might then admit its use.

DG 35 originally was developed by Damien Grobelny, a chemist designing compounds aimed at blocking the protease enzymes involved in AIDS. The men met in 1990, and Majewski at the time was looking for new products for his Australian cosmetics importing business.

Grobelny moved to LaTrobe University in Melbourne and in further work identified two non-toxic compounds, one of which was DG 35.

The IPO documents state that a pilot Phase I trial has been carried out with 5-mg/kg and 10-mg/kg doses in healthy volunteers. There also was a two-week Phase II study of the tolerability of repeated doses in HIV-infected patients.

No significant adverse effects were reported by patients, and the lack of toxicity is cited as a competitive edge over existing protease inhibitors on the market. The documents note also that there were reduced CD lymphocyte counts in some patients. Other tests indicate that the drug might be able to penetrate the blood-brain barrier.

Majewski said that from early indications of investor interest he expects to complete the IPO.