pSivida signs licensing deal in China

Perth-based bio-nanotech company pSivida (ASX:PSD, NASDAQ:PSDV, Xetra:PSI) has signed a licence deal worth more than AUD$2.64 million with a US-based firm.

The deal, which incorporates upfront and milestone payments and royalties ranging up to 30 per cent, was signed with Beijing Med-Pharm Corporation for the clinical development, marketing and distribution of pSivida's lead product, BrachySil, in China.

"This creates a huge marketing opportunity in China, which has the highest rate of liver cancer in the world, but more importantly this agreement validates the commercial potential of BrachySil," said pSivida's investor relations manager, Brian Leedman. "Beijing Med-Pharm are the people to deal with in China for western companies, and this will serve as a robust platform for other licensing agreements in the US and Europe." Under the terms of the licence, pSivida will manufacture BrachySil, and Beijing Med-Pharm will be responsible for clinical development, securing regulatory approval, marketing and distribution in China. pSivida will retain manufacturing rights for BrachySil under the licence. It is a condition of the licence that a manufacturing and supply agreement for pSivida to supply BrachySil to Beijing Med-Pharm is concluded within 90 days.

Beijing Med-Pharm is a US-based company with Chinese subsidiaries that offers a channel into China to primarily western pharma companies. In December 2004, Beijing Med-Pharm initiated the first ever purchase of a Chinese pharmaceutical distribution company by a foreign entity after it signed an agreement to purchase Beijing Wanwei Pharmaceutical, a pharmaceutical distributor covering most of Beijing's hospitals.

In a statement, Beijing Med-Pharm chairman Martyn Greenacre described BrachySil is "a highly innovative product" which addressed a significant patient population. "The growing middle class in China allows for a growing and significant population with the ability to pay for medicines of this type," he said.

Leedman said BrachySil would entering phase IIb clinical trials shortly as a potential new treatment for primary liver cancer. He said the product would not be on the market until 2007.

Earlier this month pSivida announced that it had entered into a definitive merger agreement to acquire Control Delivery Systems, a US based drug delivery company, which it said had the potential to create a global bionanotech company specialising in drug delivery, with revenues from existing products and generating long-term value through its diversified late-stage product portfolio.