In 2004 the biotech company raised C$2.24 million net of expenses from a public offering of securities, and C$0.82 million from net liquid assets of capital pool company Dupont Capital, with which it amalgamated.
It said in a statement that these measures have given Advitech "the financial resources necessary to continue developing its main technology, XP-828L, and to continue financing its operating activities for at least the next year".
Advitech acquired the exclusive rights to the technology behind XP-828L, which is intended to help alleviate mild to moderate psoriasis, when it entered into an agreement with French firm Pierre Jouan Biotechnologie in 2003.
It originally hoped to roll out the product by the end of 2004, but decided to delay whilst it carries out a program of placebo-controlled clinical trials, the results of which are expected to give the product weight with dermatologists, as well as just with natural products suppliers.
"The product's long term success depends on this," Advitech VP and CFO Michel Lamontagne told NutraIngredients-USA.com.
The first clinical study, to determine the effectiveness and safety of XP-828L on adults suffering from mild to moderate psoriasis, was carried out on 11 patients over a 112-day period in the first half of 2004. Promising results suggesting that it may improve the condition amongst sufferers were first presented to the International Psoriasis Symposium in Toronto in June.
A second study - double-blind with placebo control group - began at the end of 2004 and is expected to confirm the results of the first.
An in vivo study is also underway to assess XP-828L's potential to alleviate the symptoms of chronic inflammatory bowel diseases such as Crohn's disease, a condition which, although very different from psoriasis in terms of symptoms, is the same in terms of inflammation cell mechanisms.
Although XP-828L is classed as a dietary supplement in the US, meaning that, for regulatory purposes it falls under the DSHEA, Advitech is in discussion with pharmaceutical companies about bringing it to market.
Lamontagne said that there is no oral product targeting mild to medium psoriasis in the US at the moment, and the marketing resources afforded by pharmaceutical companies will help ensure it comes to the attention of healthcare professions and achieves its market potential.
Despite the expenses associated with the trials, Advitech's net loss increased slightly over the 12 months, remaining at around C$1.4 million.
This was facilitated by the company's decision to cease its manufacturing operations, raising C$554,440 from the sale of its facility back to Perfect Lab, from which it originally bought it.
Originally Advitech had intended for manufacturing to bankroll its R&D activities, but it found it difficult to divide resources between the two.
"Focus is the best strategy to achieve goals," said Lamontagne, adding that the sale has proved a good move since development activity has accelerated now that it is the center of management attention.
Going forward, manufacturing will be carried out by Armor Protéines, part of the European group Bongrain.
Last year Advitech also decided to limit its third party research contracts, leading to a 55.1 percent decline in revenue from this source from C$317,715 in 2003 to C$142,732.
Advitech might be pruning back its peripheral interests, but it does intend to continuing supplying Lactium to the US market under its 1999 license with Ingredia for the foreseeable future.
As well as generating revenue for the development program (revenues were up 58.6 percent in 2004), it is a good showcase of dairy protein's ability to achieve clinical effectiveness, according to Lamontagne.
As for Advitech's future, Lamontagne said that the XP-828L story will not end once it comes to market.
"It has a lot of potential for other applications," he said. "The company's strategy over the next three to five years is to expand the clinical trial program to cover other health conditions."