Regenera eyes deal worth up to $130m

By Renate Krelle
Friday, 08 April, 2005

Regenera (ASX:RGA) has signed deal with an affiliate of US opthamology giant Alcon, which one independent source has valued at US$100 million (AUD$130 million), for a steroid technology it licensed in only last year which is used in eye surgery.

The company listed last year aiming to commercialise Sydney university patents covering the use of synthetic steroid triamcinolone acetonide (TA) for the treatment of age-related macular degeneration (AMD). It acquired the additional technology for the use of TA to 'illuminate' the vitreous during eye surgery from US-based MINU in August last year. MINU was set up to commercialise patents developed by retinal and vitreous surgeon and scientist Dr Gholam Peyman.

Under the deal, Regenera retained 75 per cent of future revenue streams from the acquired products.

Regenera chief executive William Audrey said US patents had been issued for the use of TA in vitreous surgery, and had around 16 years to run. "Our deal with Alcon is for the life of the patent," he said.

Most of the value of the deal is due in the form of running royalties paid when surgeons use the drug in their procedures, although the company will receive an up-front license fee and milestones payments.

Audrey said the royalties were "good" double digit royalties in the US and single digit elsewhere in the rest of the world. "We have an extremely efficient path to [FDA] approval, and the product is expected in the market by 2006," he said.

Shaw Stockbroking today estimated the deal could be worth about US$100M based on US royalties in the 17.5 per cent to 20 per cent range and royalties 7.5 per cent to 10 per cent range elsewhere.

Audrey said a large number of papers had been presented on the use of TA in vitreous retinal surgery at the American Academy of Opthamology in November last year, sparking interest in the application. "We had a drug that sold itself," he said.

At time of writing, shares in Regenera -- which were issued at $0.50 in the company's June IPO -- were down 7 per cent to $0.76.