Important note: Information in this article was accurate in 1998. The state of the art may have changed since the publication date.
Mail & Guardian (Johannesburg) - April 17, 1998
Andy Duffy
Cryopreservation Technologies (CPT) refuses to divulge its funding sources, beyond its 10 feuding shareholders.
But the extent of the expenditure, which is now running at around R100 000 a month, points to a steady source of accessible income. Sales of Virodene have been banned; the drug has still to be cleared for clinical trials.
Police investigating the alleged sale of Virodene claimed this week they have evidence that CPT have been selling the drug and expect to make arrests soon. It emerged this week that the main shareholders, Olga and Zigi Visser, have been increasingly reliant on financiers in Portugal. Last month, they secured a loan of R100 000 from one contact.
The details of CPT's financing are central to a high court dispute between the shareholders that has sucked in Deputy President Thabo Mbeki and Minister of Health Nkosazana Zuma. The Vissers have claimed that Mbeki asked them to keep such details confidential.
CPT's acting manager Dr Hugo Snyckers says the group has so far raised and spent roughly R1-million. He says he is not sure how the shareholders are meeting the escalating operating costs. Alongside the Vissers, who own nearly 53% of CPT, other shareholders include fellow Virodene researcher Callie Landauer, other academics and three private investors from Pretoria. Several shareholders are contributing nothing to the costs.
CPT's expenses are likely to climb sharply this year - the current budget estimate is R5- million. It has just recruited independent consultants to help steer the drug to the market.
Probed for details of her financial fluidity, Olga Visser said she had a few insurance policies and had made a few loans.
Virodene splashed into the public arena early last year after Olga Visser and other researchers approached the Cabinet for a R3,7-million research grant. The drug was vaunted as a low-cost, effective Aids medication. However, the Medicines Control Council banned clinical trials, after CPT failed to follow accepted testing procedures. Virodene's main component is a harmful industrial solvent.
The council has since then turned down four applications from CPT to restart trials, leading the council into clashes with Mbeki and other high-profile African National Congress leaders.
The public protector is probing the alleged role played by high-ranking government officials in promoting the drug.
CPT recruited Snyckers in December after a ceasefire between the shareholders, brokered by Mbeki. CPT has just extended his initial three-month contract to June. Snyckers says his rate - R500 an hour - is fair.
He says CPT has no other South African backers, and receives no state support. He also denies that CPT is still selling Virodene.
He says CPT hopes to go back to the council for approval next month, once the outside team has rewritten the application. The consultants, recruited in the past three months, include a British virologist, Dr Lee Sequiera, a Gauteng agency that specialises in drawing up protocols, and a clinical research group. If CPT gets the all-clear it will begin to look for other investors.
Snyckers adds that the shareholders' dispute "has done a lot of damage. No one wants to invest in a company that could explode at any moment." The Vissers have been more successful finding backers beyond South Africa's borders. They are 50% beneficiaries in a Portuguese business set up last June to exclusively produce and sell Virodene in Portugal, Spain, France and Portuguese-speaking countries.
The Portuguese investors will pay for Virodene's passage through Portugal's regulatory authorities, and production and distribution costs. The Vissers will provide the know- how. Another four similar exclusive distribution ventures are on the drawing board.
The Vissers were supposed to transfer the 50% stake in the Portuguese venture into CPT so all the shareholders could benefit. They decided instead to retain the stake following the revolt among minorities - a decision that is now part of the legal action.
The Vissers have also not restricted their search for backing in Portugal to their current production and distribution partners. The R100 000 loan came from other sources - one of a string Olga Visser, Portuguese by birth, has built up.
Snyckers says the Vissers also supplied the Virodene protocol for the illegal human trials conducted in Portugal at the end of year. CPT presented the trial findings to the council in January, he adds, and only discovered afterwards that the trials had been illegal.
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