Bioprospect signs deal with US company Diversa

Listed company BioProspect has signed a pact with a second major drug developer interested in testing its library of compounds extracted from Australian plants.

It has given US drug discovery company Diversa the right to test more than 100 purified extracts from BioProspect's library of plant samples culled from Queensland and Western Australia.

No financial details were released but it is understood that Diversa will pay for initial access to the samples sample plus royalties on any resultant product.

Novartis signed a similar deal about 12 months ago but that agreement involved fewer samples, according to BioProspect CEO Selwyn Snell.

The deal is further confirmation of a business plan that positions BioProspect as a middleman between Australia's natural biodiversity and the multinational pharmaceutical and neutriceutical companies who are interested in harvesting novel genetic material from it.

The company, which went public in a $3 million float nearly two years ago, has non-exclusive bioprospecting licences from Queensland and Western Australia.

It previously announced it is in talks with two large agrochemical players, NuFarm and Sumitomo, who are evaluating a natural herbicide named Q-cide found in the leaves of a north Queensland plant.

Brisbane-based BioProspect has an agreement that gives the Queensland Government 10 per cent of gross revenues earned from commercialisation of biological samples collected on state land.

Other companies, notably AstraZeneca, have also signed bioprospecting pacts with the Queensland government.

At its current cash burn, BioProspect can fund its commercialisation cycle for another three to four months, and the company has gone out to its shareholder base and institutions in search of a further $3 million.