Psivida launches food technology spinout

Psivida launches food technology spinout RB

Perth-based bio-nanotech company Psivida (ASX:PSD, NASDAQ:PSDV, Xetra:PSI) has created a new spinout company, PsiNutria, to develop its silicon technology in the food industry.

PsiNutria will receive seed funding of AUD$1.5 million from Psivida, as well as a royalty bearing exclusive license for the use of BioSilicon as an ingestible ingredient in food. PsiNutria will also develop patentable intellectual property using silicon in food packaging.

"These are areas that we always intended to explore, but Psivida was initially created to go down the drug delivery path," said Psivida's investor relations manager, Brian Leedman. "As we did with AION Diagnostics to commercialise the diagnostic applications of BioSilicon, we're doing the same now with PsiNutria to commercialise the food applications of BioSilicon."

BioSilicon dissolves into silicic acid which is found in foods such as beer, wine, rice and cereals.

"BioSilicon has applications not only in biodegradability, but also optical properties -- it can be structured in such a way that it can change colour, based on its environment," said Leedman.

BioSilicon can be structured to absorb gases, enabling it to preserve food for long periods, as well as enabling consumers to tell whether a pathogen has been applied to food. "So you can tell if food has been tampered with," Leedman said.

Other potential food industry applications of BioSilicon include products to detect variations in storage temperature and for food tracing.

"You can add a coffee smell to BioSilicon, so that it would emit an odour or a flavour," said Leedman. "You can apply that into a food and that would be a different way of flavouring something with the by-product being silicic acid in such small quantities that it would be harmless to the body."

While Leedman said the company has only just started exploring potential applications "the market is enormous for these types of products".

"Major companies like Kraft, Altria, and Unilever are pursuing these applications in nanotechnology," said Leedman. "We're not creating a new market, we're entering a market that they're forging for us. But we believe our technology is better."

The United States Department of Agriculture estimates that the cost of illness and premature death from the top five food borne pathogens is US$6.9 million in the US alone and the market for so-called functional foods (for example, food products with improvements to shelf life, traceability and nutrition) is estimated to be about US$100 billion.

Leedman said that the potential to have products on the market is shorter than for therapeutic products, given the different regulatory environment. "We would suggest less than two years in some areas, particularly the non-ingestible applications," he said.

In the future, PsiNutria will seek either its own trade sale or public listing, with Psivida shareholders receiving PsiNutria shares if the company lists.

Psivida is using analysis from nanotechnology research and advisory firm Lux Research to help develop PsiNutria's strategy.

Psivida's shares were trading at $0.635 at the time of writing, down $0.005 since the market opened this morning.