Pi2 heads for the great outdoors

Sydney-based company Pi2 Limited (ASX: PAI) has touted a new business strategy with two acquisitions, one in life sciences and the other in outdoor advertising.

The company has flagged a name change to reflect its new strategy, which is subject to shareholder approval after a general meeting in November.

The proposed rebranding comes at the end of a year of soul-searching by Pi2 after its decision in 2001 to abandon clinical trials of its PAI-2 compound for treatment of skin disorders.

Pi2 was floated on the ASX in 2000 at 50c a share, but its value plummeted when clinical trials of PAI-2 proved unsuccessful.

In a statement, Pi2 managing director Chris Bregenhoj said the company had looked at about 40 proposals over the last year, about half of which were biotech-related. Most were "early-stage and therefore of substantial risk," he said, so the company opted for "less risky proposals" with the aim of restoring value to Pi2.

The total value of the new acquisitions is $7.85 million, with the up-front cash cost component being $2.8 million, the company said. The remainder of the acquisition cost is in shares in Pi2 at 10 cents each, some of which will be issued on a performance basis.

Both new acquisitions, the company said, were cash-flow positive.

Pi2's life science acquisition involves two patented products -- Inhibin, an FDA-approved product used to diagnose and monitor hormonal reproductive disorders during pregnancy, and an early-stage kidney and liver regenerative, Follistatin. Inhibin is marketed and manufactured by the Texas-based Diagnostic Systems Laboratories.

Both products are owned by BioB Limited, a company spun off from the now defunct Biotech Australia. In the year to June 2002, BioB's gross royalties and income from sales of antigens and antibodies were about $1.3 million.

Pi2's other acquisition, Outdoor Network Australia, manages outdoor advertising billboards at sites in most Australian states.

It is said to have an annual revenue of $20 million, which Pi2 said ranked it within the top three Australian participants in each of the outdoor market segments in which it operates. Pi2 said it aimed to expand Outdoor Network's market reach and had appointed the company's managing director, Brendan Cook, as a director of Pi2.

Pi2 director Dr David Irving explained that Outdoor Network was an established business with a capacity for growth.

"From the point of view of our future direction, we wanted to have a revenue stream and the potential to grow," he said.

Irving said Pi2 was continuing to assess the PAI-2 compound's effectiveness as a cancer therapeutic, in a research project with the University of Wollongong and St George Hospital.

Pi2 has also called an extraordinary general meeting in mid-November.