Southpoint acquires Boron molecular
Tuesday, 30 March, 2004
Former Perth-based telecommunications company Southpointe (ASX: SOU) plans to become a biotechnology investment company after acquiring interests in two biotechnology-related ventures.
The company recently invested AUD$5.1 million into biomaterials company Polymerco, which has an exclusive royalty free license from CSIRO Molecular Science to develop and commercialise a biodegradable, biocompatible polymer for use in a variety of applications including orthopaedics, drug delivery, dental applications, cartilage and wound repair. Southpointe and CSIRO will each hold 50 per cent equity in Polymerco.
According to Southpointe chairman Karl Paganin, the funds will provide for more than two years of R&D, expediting proof of concept and pre-clinical development of the polymer technology. He said that Polymerco would be likely to enter into collaborative agreements with other institutions and companies to develop applications.
Southpointe has also acquired 100 per cent of Melbourne-based chemistry specialists Boron Molecular for $4 million through issue of 20 million Southpointe shares at $0.20 per share. In addition, the company plans to invest $1 million into Boron and retire a $1 million debt to CSIRO, through a combination of cash payment and share issue.
Boron has an exclusive worldwide license from CSIRO to produce organoboron compounds for the pharmaceutical and biotechnology industry.
"Boron's technology is good -- it's a good business with a good business plan, but it's short of capital," Paganin said.
Southpointe also plans to raise another $4 million through a share placement underwritten by Euroz Securities. According to Paganin, the company -- which plans to change its name to Xceed Biotechnology -- will look for further compatible biotechnology investments to join Polymerco and Boron.
"The expected growth and investor interest in this sector has been driven by recent significant positive research and clinical outcomes by existing Australian and international biotechnology companies," he said.
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