Bio-Layer plans backdoor listing

Brisbane-based materials science specialist Bio-Layer is planning a backdoor listing on the ASX through SSH Medical (ASX:SSH) in September, aiming to raise between $3.5 and $5 million in capital to commercialise its products.

Founded in 2000 as Polymerat, Bio-Layer has developed a high-throughput proteomics screening platform to design materials for biotechnology, diagnostics and pharmaceutical industries. In April, the company received a $1 million Start grant to develop surface coatings that orient and lock antibodies for drug discovery and diagnostics.

These surface coatings align, support and create a simple protocol for antibody attachment and improve assay performance up to 70-fold, said Bio-Layer CEO Jason Armstrong.

Bio-Layer's assay products are being sold in the US for Alzheimer's disease and cancer research and the company has been engaged by four clinical diagnostic companies to use Bio-Layer products in existing or new immunoassays.

Bio-Layer conducted three feasibility studies for clinical diagnostic assay companies in the last month, said Armstrong. "Companies pay us up front, and if the product works they pay us a royalty," he said.

Royalties range from 4 to 10 per cent and the company plans to develop five to six major kits per year. "We are currently focusing in the US, but we have just started discussions in Europe and are about to start in Japan," said Armstrong.

The company's second generation of products will remove the need for antibodies from assay systems altogether, through selective binding, presentation and bio-molecules protection. The company plans to develop a specific surface for the detection of various diseases and then licence each surface to a different commercial partner.

Bio-Layer expects to be profitable within two years.

SSH Medical will acquire Bio-Layer, with the acquisition requiring approval at an extraordinary general meeting to be held in early September, and a capital-raising of up to $5 million.

Sydney-based Emerging Growth Capital (eG Capital) is acting as adviser to the transaction. SSH Medical has been valued at $3 million for the purposes of the transaction and Bio-Layer has been valued at $15 million. Consideration will be an issue of ordinary shares in SSH Medical to shareholders of Bio-Layer. Two SSH Medical directors will remain on the board.

At June 30, SSH Medical had $297,000 in cash.

Armstrong said the backdoor listing option offered "liquidity, a cheap way to get to market, and a small capital raising that is more sensible than the VC approach".

Bio-Layer's products

Two of Bio-Layer's assay products are LR Solution and self-ligating Mix&Go surfaces.

LR is a ligation reagent based on metal complexes. Using a coupling protocol, capture antibodies are reacted in solution with a metal complex to form an antibody-metal conjugate. This conjugate is then reacted to the solid phase for coupling to, for example, bead based assays. The metal cation serves as a cross-linker between the protein and the carboxylic groups on the surface.

Mix&Go surfaces are pre-activated polymeric coatings for antibody coupling. The coatings contain metal ions and can be applied directly onto microbeads or other substrates. The one-step conjugation protocol takes less than an hour from start to finish.

Bio-Layer is one of several companies presenting at EG Capital's annual biotechnology conference in Sydney on Tuesday, August 9. More information: www.egcapital.com.au