Biosignal woos potential customers in oil, gas

Sydney-based Biosignal (ASX:BOS) has piqued the interest of some major international oil and gas companies.

To date, the company's primary focus has been the development of antibacterial contact lenses and a range of anti-bacterial coatings for medical devices. But tests by Biosignal and Q.Stat have shown that Biosignal's proprietary furanone anti-biofilm compounds can potentially prevent corrosive biofilms forming in pipelines, tanks, filters and other equipment used in oil and gas production.

"This [resources sector] is an opportunistic area," said Biosignal CEO Michael Oredsson. "We are used to dealing with companies outside the health sector and have had experience dealing with the resources sector in the past. It's not that different to collaboration with the medical sector."

But there are cultural differences between the health care sector and others, Oredsson said. "Big pharma and biotech companies are all used to collaboration, whereas it is not the culture in the industrial sector. But in recent years they have become much more open to collaborating with companies with new technologies.

"We hope to establish a collaborative project and resources companies seem to have no problem with that. Microbial corrosion it is a very significant problem for the resources sector -- given it is such a big problem it is easier to generate interest."

Another difference identified by Oredsson is the approval process, "With medical devices there are extensive trials. With the industrial sector you must go through testing, but it is a bit quicker and easier. However, cost constraints are more of a concern. Margins are higher in the human health sector, whereas in the industrial sector there are tougher demands at achieving low cost and volume becomes more important. You have to produce things cheaper and are competing against legacy products.

"They also don't have the same scientific focus -- its more on marketing, sales and product development than R&D."

Oredsson avoided speculation as to when a deal might be signed or when revenues might come from the oil and gas industry. "This is at an early stage and there is still a long way to go," he said. Meanwhile, Biosignal has been granted its third Australian patent this week. The latest, 'Synthesis of cyclic compounds', protects a key class of compounds being developed by Biosignal for use in antibacterial contact lenses and other product applications such as oral care.