Starpharma breaks away from PDF status, raises $7.56m

Starpharma (ASX:SPL) today cast off the shackles of its pooled development fund status, and changed its name to Starpharma Holdings Limited.

The company also completed a placement of 9 million shares at AUD$0.84, raising $7.56 million. And as if to demonstrate its new-found freedom, Starpharma said the funds would be directed towards opportunities arising out of the US investee company Dendritic Nanotechnologies.

As a pooled development fund (PDF), Starpharma was prohibited from increasing its investment or participating in any US-based spin-offs. The company now has an opportunity to make a follow-on investment in Dendritic Nanotechnologies, in which it currently holds a 49.9 per cent equity interest.

Starpharma established Dendritic Nanotechnologies with dendrimer nanotechnology pioneer Dr Donald Tomalia, and holds commercialisation rights to pharmaceutical applications relating to Dendritic Nanotechnologies' intellectual property.

"The PDF status has been very useful in attracting initial investment into the company. However, the company has entered into a new phase of growth as an international participant in the biotechnology and nanotechnology industries, and there are commercially compelling issues whereby it is no longer in shareholders' interests to retain PDF status," said CEO John Raff.

"Dendritic Nanotechnologies is an increasingly important strategic partner for Starpharma because of its leading international position in the area of dendrimer nanotechnology."

Former Dow Corning CEO Richard Hazelton was recently named Dendritic Nanotechnologies' chairman, and nanotechnology specialist Prof Jean Fréchet was appointed as a director.

"To be able to surround Dr Donald Tomalia with the calibre of commercially focused business people we now have on board we believe bodes well for the future," said Dr Raff.

The revocation of PDF registration was approved by a general meeting of shareholders in January. Investors participating in the placement also received a March 31, 2005 variable priced option on a 1:2 basis.

Investment fund Biotech Capital Limited (ASX:BTC) took a $2.5 million stake in Starpharma's placement -- only the second investment it has made in a listed company. Biotech Capital's other listed investment is tissue engineering company Clinical Cell Culture (ASX:CCE).