Chemeq Tech signs manufacturing deal

The company born out of the collapse of one-time biotech high-flyer Chemeq Ltd has signed a manufacturing agreement with French chemical producer Arkema.

The agreement represents a breakthrough for Chemeq Technologies, which was established to extract value from the intellectual property developed by Chemeq.

As an ASX-listed company, Chemeq Ltd was one of the high flyers of the tech boom but went into receivership in 2007 after cost blow-outs at its Rockingham factory and failure to secure sales contracts.

Chemeq Ltd had been targeting intensive livestock industries such as pig and chicken farms, to commercialise its "polymeric antimicrobial" technology, which was promoted as an alternative to antibiotics.

In February 2008, with the support of the receivers (Ferrier Hodgson) and investors, Chemeq Technologies was established as a licensing business. It believes there is a wide range of applications for the technology in medical and industrial sectors.

Chemeq Technologies' web site lists Ferrier Hodgson partner Martin Jones as the sole director.

The management team includes vice president corporate Brian Mangano and vice president commercial Bill McHenry.

The announcement is below:

Arkema and Chemeq Technologies sign Cooperation Agreement

Arkema France and Chemeq Technologies are pleased to announce the signing of a manufacturing cooperation agreement between the two companies. Under this agreement Arkema France will scale up the manufacturing of Chemeq Technologies' breakthrough polymeric antimicrobial compound PPPA.

Under the Cooperation Agreement, Arkema proposes to utilise its patented technology to produce PPPA from renewable organic material. As a result, Chemeq Technologies will be able to offer the market a 'green' and sustainable technology, ideal for the personal care, pharmaceutical and industrial markets.

Chemeq Technologies will be marketing the PPPA technology under the trademark of Cereese for the personal care market. It also has plans to commercialise the technology in a range of other important industrial and medical markets.

For the cosmetics industry, Cereese is a breakthrough antimicrobial that is non-toxic and generally safer than most currently available preservatives and actives. It has broad spectrum activity against bacteria, fungi, bacterial spore and viruses. Recent independent laboratory and clinical studies have also shown Cereese to be effective against acne and dandruff causing organisms. Cereese's polymeric nature and the size of the molecules inhibit absorption through the skin making Cereese ideal for the cosmetics market. Cereese is considered to be an ideal preservative for the cosmetic and personal care industries because it is:

 Soluble in a range of solvents

 Polymeric by nature

 Difficult to absorb through membranes

 A broad spectrum antimicrobial

 Not subject to the development of resistance

Bacteria is developing a growing resistance to existing antibiotics and biocides, but research shows that the PPPA polymeric technology appears to slow or even negate the development of resistance.

Arkema France and Chemeq Technologies now have a commercially viable and sustainable manufacturing process for the unique Cereese compound.

Arkema has a goal of deriving 10% of its income from sustainable products by 2012.

Arkema is a global chemical company and France's leading chemicals producer. Arkema consists of three businesses: Vinyl Products, Industrial Chemicals, and Performance Products. Arkema reports annual sales of 5.6 billion euros, has 15,000 employees in over 40 countries and six research centres located in France, the United States and Japan. With internationally recognized brands, Arkema holds leadership positions in its principal markets.

Chemeq Commercial Vice President Bill McHenry described the agreement as a significant milestone for Chemeq.

"This supports management's view that the best way to penetrate this significant market is with a well-resourced manufacturing partner such as Arkema. Having a manufacturing partner now underwrites the supply side and Chemeq is keen to bed down commercial distribution agreements with a number of personal care companies that it is currently in discussions with. The business can now provide scale, quality and cost-effective supply of this innovative technology."

The Accord allows Chemeq to potentially penetrate a number of significant markets around the globe as Arkema can provide both quality and scale of manufacture of this green antimicrobial. New research proving PPPA's novel mode of action, combined with this agreement provides exciting news for the company and is a significant achievement in the commercial scale supply of a novel, high quality, cost-competitive antimicrobial.