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BresaGen doubles after securing stem-cell patent

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    BresaGen doubles after securing stem-cell patent
    By Scott Rochfort
    November 19 2002

    Dr Smeaton

    Just a week after hitting an all-time low, BresaGen shares staged a stunning reversal yesterday after the company secured a key patent which it said would give it a "clear path" to commercialise its stem-cell treatments.

    Shares in the Adelaide-based biotech soared to an intraday high of 64c before closing at 54c, up 26.5c - or 98 per cent - from Friday's close, after it disclosed it had entered into an agreement to secure the so-called "Hogan patent" currently held by Atlanta-based intellectual property firm Plurion.

    Once acquired, chief executive John Smeaton said BresaGen would have exclusive rights to use a particular technique - patented in 1992 and 1995 - to isolate "pluripotent" stem cells for the treatment of Parkinson's disease.

    Pluripotent stem cells can be developed to specialise in any of the body's 220 cell types, such as nerve cells.

    While BresaGen has already tested the technique, Dr Smeaton said the patent would allow the company to enter into licensing agreements to develop other stem-cell products apart from its core Parkinson's disease treatment.

    Under the deal, BresaGen will issue 18.68 million shares and 5.69 million options exercisable at 41c to Plurion.

    If finalised, the deal will hand Plurion 29 per cent of BresaGen once the options are exercised, and it will get two directorships on the eight-member BresaGen board.

    Described as a "virtual company" by Dr Smeaton, Plurion's core activities are primarily based on gathering intellectual property and patents.

    The deal will go to shareholders at BresaGen's annual meeting next February.

    With BresaGen's cash reserves dipping below $10 million at the end of the September quarter, Dr Smeaton said the company had "one and a bit" years left before it would run out of cash.

    He said within this time BresaGen would attempt to secure a licensing agreement with a major pharmaceutical company to market its stem-cell treatments. Dr Smeaton added that the company might look towards raising additional equity this year.

    It is expected to be 10 years before BresaGen's Parkinson's disease treatment will be available to patients, with clinical trials expected to start in 2005.

    Dr Smeaton said the deal with Plurion would not jeopardise the company's other key development area of manufacturing drugs with proteins instead of chemicals.

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