Acrux raises $9.8m to speed drug delivery program

Novel drug delivery company Acrux has raised $9.8 million through the sale of 10 per cent of its stock to Queensland Investment Corporation.

CEO and managing director of Acrux Dr Igor Gonda said the money raised would be used to accelerate the development of its transdermal delivery platform, particularly in the areas of pain management and female hormone replacement.

"Our priority is to generate as much value as we can in Australia before licensing our products to avoid the usual problem in Australian biotech where a company runs out of money or the investor pushes them to licence early," Gonda said.

He said he was pleased QIC, with its understanding of the biotech industry, had become a major institutional shareholder.

"They are a major player in the Australian stock market and are a long-term investor with a very good understanding of this industry."

Queensland Investment Corporation purchased about 1.64 million shares in Acrux at $6 a share, with the deal negotiated with the assistance of biotech consultancy TSL Group.

Gonda said Acrux had been seeking to raise money since last year, but had only begun negotiations with QIC in May. The Queensland group joins Singapore-based Blue Dot Capital and Deutsche Bank as Acrux's top institutional investors.

Gonda said QIC had expressed satisfaction with the current management and composition of the company's board, and as such would not be taking a seat on the board.

"This new investment will enable us to accelerate and expand the applications of our transdermal delivery platform to several new drugs, and to move our female hormone replacement and pain therapies into late stage clinical development," Gonda said.

"This way, we can generate a lot of value in Australia before we license the products to global marketing and sales partners."

He said the money would also be used to facilitate the company's move from its central Melbourne offices to a new West Melbourne location in September.

While Acrux has been considering a public offering in order to offer its investors a greater degree of liquidity, Gonda said the company was keeping its options open in the current climate.

"I think the climate is so uncertain in Australia and overseas, we have to provide ourselves for (private and public) options," he said. "Looking at the market now, it is not a pretty picture. But we are keeping an open mind about this."

Founded in 1998, Acrux is involved in the development and commercialisation of a transdermal drug delivery technology that uses sunscreens to enhance the rate of absorption of drug molecules.

These formulations are then administered with a fine mist delivered using the company's novel Metered Dose Transdermal System.