Bioprospect and Bio-Gene team on eucalypt-derived flyspray

Queensland’s Bioprospect (ASX:BPO) has entered into a heads of agreement with Perth’s Bio-Gene Technology for the grow-out and distribution rights of Qcide, BioProspect’s eucalypt-derived natural insecticide.

The agreement comes over two years after BioProspect first licensed Qcide to Bio-Gene.

Under the agreement, Bio-Gene will pay a AUD$100,000 upfront licence fee, and must raise at least $1.5 million to establish a plant-out of, the Australian native from which Q-Cide is extracted. Bio-Gene will gain the exclusive right to produce and distribute Qcide oil commercially in Australia and New Zealand. Bioprospect will receive a 7.5 per cent gross royalty on oil and consumer product sales.

Bioprospect R&D manager Matt Kealley said that neither the number of hectares of trees to be planted nor the amount of oil to be produced was specified in the agreement. “It depends on the demand for oil at the end of the day,” he said.

Qcide is an extract of Eucalyptus cloeziana, an Atherton tableland native also known as Gympie messmate, which grows to a height of 15 to 20 metres.

Keally said the initial work on QCide began in 2001. “There was a study done by Bioprospect on various tree species -- leaf oils were extracted and tested against insect species,” he said. “QCide seemed to have an effect against flies and ants.”

The oil is extracted by steam distillation, in a process similar to tea tree oil extraction.

“We’ve earmarked it as a potential household product,” said Keally. “But it depends on the collaborater and how they will commercialise it. I see it for hygiene in the domestic market -- as a household flyspray.”

The Qcide compound is patented and is currently undergoing studies for registration with the Australian Pesticide and Veterinary Medicine Authority.

“We have conducted toxicity studies under OECD guidelines and that data will also be used for the registration of the product,” said Keally. “Toxicity was very low and it was non-mutanogenic.”

BioProspect has conducted its own research with the assistance of Queensland government departments QFRI and DPI to collect seed for motherstocks, and understand the plant’s behaviour in order to establish a successful production regime.

According to the company, it is currently in evaluation collaborations with international agrochemical companies, Sumitomo, Neudorff, and Endura.

Although the heads of agreement sets out the essential terms of the deal with Bio-Gene, it is subject to approval by Bioprospect shareholders at a meeting to be held on September 7 this year. It is also subject to Bio-Gene conducting further research and development and raising $1.5 million to fund the grow-out program.