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ASX Announcement INSTITUTE OF DRUG TECHNOLOGY AUSTRALIA LIMITED ANNUAL MEETING: FRIDAY 31 OCTOBER 2003 CHAIRMAN AND MANAGING DIRECTOR'S REPORT I am pleased to welcome shareholders to our Annual General Meeting for the year ended 30 June 2003. I especially welcome new shareholders both to this meeting and to our premises. For the year ended 30 June 2003, IDT reported a profit after tax of $4.2 million. Revenue for the period increased by 21% to $25.8 million. A fully franked dividend of 3.5 cents per share was paid on 24 October 2003. Taken with the interim dividend of 2.5 cents per share, the overall dividend was increased over the previous year by 20%. The most significant new contribution to the company's business during the year under review was the inclusion of a full year of revenue from our Adelaide based CMAX facility. Shareholders will recall that the company acquired this outstanding early stage clinical trials unit from Mayne Pharma in June 2002. The CMAX unit provides a range of services including Phase 1 studies of potential new pharmaceutical agents in our 48 bed clinical ward at the Royal Adelaide Hospital, supporting analysis of biological samples in our state of the art analytical chemistry facility, statistical analysis of data, the writing of reports for regulatory submissions and a host of other services required for early stage clinical development of new medicines. The business and staff of CMAX are now fully integrated into the IDT business and we are delighted with the success of the facility. Over the past year, a number of new clients have engaged our CMAX unit to perform clinical work, notably several international companies. We continue also to attract early stage clinical work from Australian biotechnology and pharmaceutical companies and it is pleasing to note that the services provided by IDT through our CMAX facility compete very favourably on price and quality measures with international units that provide similar services. Our fee for service research and development work continues to develop with business from the local biotechnology companies beginning to grow again, partly as a consequence of the improving market for capital raisings and partly in response to the re-opening of the Commonwealth Government's Start Grant programme. In our manufacturing business, the demand for key active pharmaceutical ingredients remains strong, although there has been some weakening in our generics API business as I mentioned in our Annual Report. The manufacture of one generic drug that we had been supplying for an international client has now been moved from IDT to a European site as part of a streamlining of that company's supply requirements. We have also experienced some downward pressure on margins and volumes for a couple of other generic API's. The validation work on our new 100 litre and 400 litre containment facilities has just been completed. We currently have two manufacturing projects being transferred into the facilities. Another initiative that I mentioned in our Annual Report is the opportunity we have identified for specialised secondary manufacturing. Shareholders will be well aware that the company has built a significant reputation for high quality technical work in production of products requiring high levels of containment. We need these high levels of containment to deal with drugs that are highly potent or toxic, such as a number of the anticancer drugs that we manufacture. The same containment requirements are relevant for certain secondary manufacturing of finished pharmaceutical products such as capsules, tablets or injections. The company has recently acquired new premises to capitalise on this opportunity and we are presently installing equipment to begin the validation stage of a new project with an international client. Several further opportunities have been identified in this area and we anticipate a significant growth in our business over the next two to three years from this new area of operations. On behalf of the Board, I continue to express my thanks to our staff for their outstanding contribution to our work during the year. I also place on record my thanks and appreciation to our senior management team, especially our General Manager Dr Robyn Elliott and our Finance and Administration Manager Mr Adrian McKenzie who have worked tirelessly for the company. Finally I express again my personal appreciation to our shareholders and to my fellow directors for their support and encouragement. Dr Graeme L Blackman -------------------------------------------------------------------------------- Please note: For best results printing the announcements, we suggest you select landscape as your print option rather then portrait.
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