PanBio to raise $7 million to speed products to market

Diagnostics company Panbio (ASX: PBO) has raised AUD$3 million in a placement to existing and new shareholders at a price of $0.42 per share, and plans to raise a further $4.2 million through a share purchase plan to existing shareholders at the same price.

The funds will be used to accelerate the company's development programs, which have just been boosted by the acquisition of a worldwide exclusive license from Stanford University for technology which promises to speed up diagnostic immunoassays from hours to minutes.

The technology, known as Reporter Subunit Complementation (RSC) will enable the development of a homogeneous enzyme immunoassay system for the clinical laboratory, which will reduce the run time significantly and provide results with greater sensitivity at a lower cost.

Stanford will receive a small up front payment and ongoing royalties in return for the licence.

"We're estimating it will take two years to get to market with this new technology," said CEO Jim Porter. He said that while it was too early to say what the initial products developed using the system would be, it was likely that the company would adapt one of its current products to be the first off the line.

Just as importantly, however, Panbio will be able to sub-license the technology to other diagnostic laboratories, particularly if it turns out to have the impact that the company believes it will.

"This innovation would be a major step change in diagnostics," Porter said. "It would have a dramatic impact."

The company is in discussions with other parties to acquire additional technologies to enhance its position in coming months.

Panbio is also continuing to develop its Oligo Rapid point of care products, which will enable testing for multiple disease states from a single disposable device.

Porter said the acquisition of the licence and the capital raising marked a turning point for the company, which has made a lot of changes to its business base in the last year.

"Over the last 12 months, we have aggressively restructured the company's costs to create a profitable base business going forward. We've focused on developing people and have a strong team of scientists and business people in place. Our R&D is highly targeted with an active new product pipeline and two breakthrough technologies. With this capital plan, we will have the financial resources to drive growth and build value for our shareholders," he said.

A shareholders meeting to approve the share purchase plan will be held in the next 3-4 weeks. Shareholders in Australia and New Zealand will be able to acquire up to $5000 worth of shares.