Bioprospecting company on the move

BioProspect is expanding its beachead in Queensland on the back of promising results from its five-month-old biota mining agreement with the State Government.

The publicly listed bioprospector is shifting its headquarters to Brisbane from Perth and plans to open a sample collection, extraction and processing centre in North Queensland.

The new centre will introduce cost efficiencies for BioProspect and also give it better access to Papua New Guinea and other island-states in the area with whom the company hopes to forge sample collection agreements.

Executive director Greg Eaton said the expansion plan could increase BioProspect's workforce by nearly one-third, to 26.

The most promising of the company's Queensland bioprospecting finds so far is a natural herbicide, dubbed Q-cide, found in the leaves of a North Queensland plant.

BioProspect is in the process of negotiating with growers to plant "thousands of hectares" of the Q-cide plant, Eaton said.

A number of large agri-chemical companies, including Dow and BASF, are in the process of testing Qcide, which shows low toxicity to mammals and high kill rates to insects, according to Eaton.

BioProspect's plant extract library now holds thousands of species and is growing at about 1700 species per year, according to Eaton.

The company, which went public in a $3 million float about 14 months ago, entered its bio-mining agreement with Queensland last November.

Combined with an earlier West Australian pact, it gives BioProspect non-exclusive biodiscovery rights in forests and reserves in the two states that contain the bulk of Australia's plant biodiversity.

Queensland will reap 10 per cent of gross revenues earned from commercialisation of research based on biological samples such as Q-cide collected on State land.

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

However BioProspect alone is willing to make purified extracts of samples available to third parties such as pharmaceutical and nutriceutical players for analysis and testing.

Novartis is one example of a multinational which has negotiated rights to test compounds from BioProspect's library. Such rights can be either exclusive or non-exclusive and have a stepped licensing structure.

The initial licence runs for three months after which the customer must make a milestone payment to extend it or return the rights to the compounds to BioProspect.

Analysis and purification of plant samples are currently handled by Australian Phytochemicals, a laboratory complex at Southern Cross University in Lismore, NSW, which BioProspect has taken a controlling interest in. Australian Phytochemicals also does drug discovery contract work which adds to BioProspect's revenue stream.

BioProspect expects large revenue contributions from a prostate cancer nutriceutical in which it has an interest with Queensland company Lane Labs.

The bio-prospector told the ASX that its overheads will be completely covered by royalties from the product after its US launch by Lane Labs.