Agenix to divest business in China

Melbourne-based biotech Agenix (ASX: AGX) has plans to divest its business in China to enable the company to concentrate on diagnostics for the next few years.

“We have completed preclinical studies in a project involving a tenofovir prodrug for hepatitis B, AGX-1009,” said Nick Weston, chairman and chief executive of Agenix. “We are negotiating with a number of companies interested in buying the patent and plan to exit China and they will take the project through to Phase 1, 2 and 3 trials.”

The expected funding from this deal and reduced cash burn will help the company progress its point-of-care diagnostic platform, DiagnostIQ, and its Phase III ready clot diagnostic, ThromboView.

Agenix recently entered into a collaboration with Scottish microarray technology company Arrayjet.

“Arrayjet has a bunch of patents around microarray bubble-jet technology,” said Weston. “Their role in the partnership is to modify the DiagnostIQ platform as a microarray device.”

DiagnostIQ is a flow-through point-of-care platform technology originally developed by Tyrian Diagnostics, formerly Proteome Systems, to use with its tuberculosis tests.

“We saw that the platform was pregnant with possibilities,” said Weston. “And we could structure a deal to commercialise it without parting with cash.”

Agenix has a licence agreement with Tyrian to use the platform for applications in human health - a deal that was signed in October 2012. Similarly, Bayer CropSciences AG has a licence deal with Tyrian to develop the platform for testing wheat. Tyrian holds and manages the patent.

The partnership will involve adapting the device and reader then using Arrayjet’s bubble-jet technology to spray analytes onto the platform.

In its current format the platform can conduct only two tests, the modification as a microarray will significantly increase the number of analytes that can be assessed.

“It will be a biomarker panel of spots rather than strips,” said Weston, adding that the modified platform is likely to accommodate about 50 analytes per panel. “And it should take around 5 minutes to get a result.”

Antibodies are used to test, for example, for kidney function or tuberculosis, depending on the specific analytes.

The plan is to develop the DiagnostIQ flow-through technology to work as a microarray platform and then license this out to others for diagnostic use.

“There is a need for this in low resource settings like China,” said Weston, “but it will probably also be appealing in the US and Europe.”

“The suggested protocols to process the adapted DiagnostIQ will be different to the current incarnation, but they are all adapted from standard immunochemistry used within the diagnostics industry,” he said.

It is early days as the deal has only just been done, but Weston expects they will be eligible for the R&D tax incentive in Australia.

“Aspects of the project can only be done in Scotland,” he said. “We are likely to be eligible for the 45% refundable offset for the R&D work being done in Australia and because no more than 50% is being done overseas, we will seek an advanced finding from AusIndustry to determine whether we are eligible for the overseas portion of the R&D spend as well.”