BioMD acquires tissue engineering company

Perth-based medical device and materials company BioMD (ASX:BOD) has paid AUD$650,000 to acquire a 50 per cent equity interest in unlisted tissue engineering company Celxcel.

The deal means that Biomd will become the major shareholder of Celxcel and will appoint BioMD managing director Michael Bennett and executive director Robert Towner to Celxcel's board.

Celxcel is a Perth-based private company formed in 2001 to commercialise the use of kangaroo tissue as a suitable biological implant (bioimplant) for humans. Animal studies conducted by the company suggest that kangaroo tissue is less susceptible to calcification than other biological tissues currently used for human implantation, such as bovine and porcine tissue.

"I think that comes basically from the kangaroo having some intrinsic properties such as very low cholesterol levels -- you never see a fat one," said Bennett.

Celxcel has been conducting research for six years to develop a fixation and sterilisation method to prepare tissues used for human bioimplants and expects to complete this research in 2006.

"It is a methodology that can be used for all sorts of tissues, including human-to-human tissue -- even human tissues that are taken out of one human and put in another, do tend to calcify to a certain extent," Bennett said.

Fixation is the process whereby tissue cells are killed and the resultant collagen matrix and dead cells are made immunogenic to stop rejection by the body. The most common chemical used for sterilisation and fixation for xenograph implants in humans is glutaraldehyde but the chemical has two problems, said Bennett. Firstly, it adds to the calcification rate, and secondly, many people have a toxic reaction to residual glutaraldehyde after implant.

"Celxcel has been able to predominantly get away from the glutaraldehyde fixation by using another method, a new procedure, and new chemicals obviously," said Bennett. "It's a method of treating the tissue from harvest time through to sterilisation and ready for implant."

Celxcel has been granted an Australian patent for its technology with a further patent application in place to cover its latest claims which will proceed to international registration by the end of 2005.

The funds provided by Biomd will be used for working capital to enable Celxcel to reach clinical trial stage in humans.

"From the point of patches, used in things like hernia operations, we would like to be looking at some ethic-approved early clinical trials by the end of 2006," said Bennett.

Celxcel currently has a trial in sheep with the animals due to be explanted during December, and a rat implant study that will start in January 2006 and run till June. "These will be the last two remaining major animal studies that will be done," said Bennett.

Biomd listed on the ASX in 2004 and the Celxcel acquisition adds a third line of business to the company's two other investment areas. The first, is injection therapy products and the second, is materials technology with Biomd collaborating with the CSIRO to develop a new plastic material for use in IV cannulas.

Biomd had cash reserves of $3.2 million as at October 31.