Local biotech expansion

THREE WA-based biotechnology companies have announced milestones in expanding their respective businesses. pSivida has announced it will acquire private US-based drug research company Control Delivery Systems (CDS) for $US104 million. Founded in 1992, CDS is involved in the design, research and development of sustained-release drug delivery products. It also has strategic collaborations with major pharmaceutical companies Bausch & Lomb and Alimera Sciences. The acquisition will be funded through the issue of about 16 million pSivida American depository shares to CDS stockholders. The issue represents 40 per cent ownership in the final combined entity, according to pSivida. Two days following the acquisition announcement, pSivida revealed to the ASX that it had secured $US15 million in additional funding through an agreement signed with a New York-based institutional investor. pSivida has subsequently received an “accumulate” recommendation from US-based research and investment banking firm ThinkEquity and a positive review from Sydney-based BBY Corporate Finance.Neurology focused biotechnology company Neuro-Discovery, a subsidiary of NeuroSolutions, has entered into its first “revenue-creating” contract in the Australian market with private Perth-based pharmaceutical company Alzhyme. The company is focused on developing drugs for use in the treatment of Alzheimer’s disease. NeuroDiscovery will charge Alzhyme an undisclosed fee to access the company’s proprietary service model for testing proteins. NeuroSolutions chief executive Alistair Dixon said the contract represented a significant milestone for the company as it was its first Australian deal. He said he was confident that more work would follow as the group gained further exposure to the local biotechnology market, in particular as the reputation of its recently acquired subsidiary became more well-known. “We intend to continue to promote the company’s products and services in Australia and hope that this is the first of a number of Australian contracts we undertake,” Mr Dixon said.