Starpharma, DNT nab Dow dendrimer patents

Starpharma shares (ASX:SPL) have surged more than 8.5 per cent on heavy trading after details of the company's three way deal with Dow Chemical and Dendritic NanoTechnologies (DNT) were finally revealed this morning.

The company's shares opened at AUD$1.00 -- up more than 23 per cent on the previous close of $0.81 -- after the trading restriction that has been in place since January 20 pending the conclusion of the deal was lifted. At the time of writing, the share price was $0.88.

The deal revolves around a large portfolio of intellectual property and associated royalties in the field of dendrimers owned by Dow Chemical that has been reassigned to Michigan-based company DNT in exchange for a significant equity stake -- reported by Melbourne broadsheet The Age last week to be 31 per cent. Starpharma, which held 42 per cent of the privately held company before the deal was struck, has also invested further cash into the company retaining its major shareholder status with a 33 per cent stake.

In return, Starpharma gets exclusive access to DNT and former Dow IP pertaining to its polyvalent dendrimer pharmaceutical applications, which form the basis of its business. Previously, the company had non-exclusive access to the technology, which underpins Starpharma's lead drug candidate Vivagel, a dendrimer-based anti-microbial which has just completed Phase I trials as a preventative for HIV infection.

"We see it as a significant deal on two levels," Starpharma commercial manager Tim Grogan told Australian Biotechnology News. "It's good for DNT to have Dow on as equity shareholder and Starpharma has exclusive license rights to the Dow and DNT portfolio with respect to polyvalents."

Dow's 196-patent strong portfolio -- which was initially developed by DNT founder Donald Tomalia when he was a Dow employee -- will bolster DNT's own 30 patents in the dendrimer field, giving the company the broadest IP position in dendrimer technology.

"The fact that Dow is transferring their intellectual property portfolio in dendrimers to DNT reinforces that DNT, and our strategic partner Starpharma, are well-positioned to develop, market and successfully commercialise these technologies," said DNT CEO Robert Berry in a statement.

In the biopharmaceutical area, DNT is developing protein, antibody, and anti-inflammatory drug delivery technologies, as well as small-interfering RNA drug targeting and delivery solutions, and new diagnostic solutions for enhancing the findings of magnetic resonance imaging. In addition, more than 200 variations of dendrimers are currently sold or licensed to other biotechnology, pharmaceutical or diagnostics companies by DNT. "Technology like this has so many applications that a company needs to be very nimble, and that's what DNT and Starpharma offer to Dow," Grogan said.

Grogan said the deal had strategic value for Starpharma, with the exclusive rights giving it an edge over competitors in the polyvalent dendrimer field, a strengthening of its strategic relationship with DNT, and the exposure the company will get in the US as a result of the agreement. The company recently completed a level 1 ADR program allowing it to trade over the counter in the US.