Nanotechnology company pSivida has emerged this year as Western Australia’s largest biotechnology stock. Mark Beyer reports on its global progress.
FOUR years ago this month, failed vegetable grower Sumich Group relisted on the stock market with new management, a new business direction and a $2.8 million capital raising under its belt.
Today, under its new name of pSivida, the company is capitalised at more than $260 million, making it one of Western Australia’s top 25 stocks, and is moving towards a listing on the Nasdaq market in the US.
pSivida is quite unlike other biotech companies in WA and, until recently, also had an unusual corporate structure.
In contrast to biotechs such as Clinical Cell Culture and Chemeq, which are seeking to take home-grown technology to the global market, pSivida is a global company that happens to be headquartered in Perth.
Its global credentials are impre-ssive.
pSivida’s research activities are based in the UK, where its core BioSilicon technology was first developed.
Its major shareholder is QinetiQ, formerly the UK Government’s Defence Evaluation Research Agency, which is Europe’s largest R&D organisation with a track record that includes the invention of liquid crystal displays, carbon fibre, infra-red sensors and radar.
pSivida has negotiated multiple research collaborations and licensing deals around the world, with the latest being with giant Japanese company Itochu.
It has negotiated manufacturing agreements with companies in Germany and the UK, which means it doesn’t need to build its own factory. And, in just the past two months, staff members have been invited to speak at conferences in Tokyo, Chicago, Baltimore, Singa-pore and San Diego.
The reason pSivida is based in this corner of the globe is that Perth happens to be the home town of managing director Gavin Rezos.
Formerly an investment banking director with HSBC, Mr Rezos lined up the pSivida deal before returning to Perth with his young family.
Initially pSivida had a complex corporate structure, but earlier this year moved to full ownership of its UK subsidiary pSiMedica and Singapore company pSiOncology.
pSivida’s UK-based chairman Roger Brimblecombe, a former chairman of SmithKline and French Research, said the group had a little more work to do on its corporate identity.
“All these various ‘pSis’ do confuse people a little bit. One of our tasks over the next couple of months is to clarify our corporate branding,” Mr Brimblecombe said.
pSivida’s key asset is a global licence to commercialise BioSilicon, a porous, biodegradable form of silicon that is ‘nanostructured’ (extremely small).
As a ‘platform’ technology, Bio-Silicon can be applied in many ways.
Mr Brimblecombe said the company had a “very disciplined focus” on drug delivery applications and on providing support for research collaborations.
pSivida’s lead product utilises brachytherapy, a localised cancer therapy in which the cancer tissue is directly exposed to an implanted source of radiation.
Clinical trials of its brachytherapy product in Singapore have delivered encouraging results but Mr Rezos said local investors hadn’t recognised the wider opportunities.
“In the US, people look at our company and the range of applications and say that your market cap is basically just on the brachytherapy,” he told WA Business News.
“What the Australian market hasn’t really picked up is that the brachytherapy is simply a lead product.”
He says the brachytherapy trials: “Provide data which can be used to support our licensing activities. Licensing in drug delivery is the main area.”
While pSivida focuses on drug delivery, it is negotiating licensing deals with other companies so they can pursue opportunities in areas such as tissue engineering and orthorpaedics.
It plans to appoint a technology licensing group to assist with this task.
In addition, pSivida has estab-lished a wholly owned subsidiary, AION Diagnostics, to develop diagnostic applications of BioSilicon.
pSivida provided AION with $1.2 million of seed funding and will seek further funds from venture capital firms before pursuing an Australian Stock Exchange listing within two years.
By that stage, pSivida is likely to be headquartered overseas.
“Eventually I would see the company being based and run from the US and with a major listing in the US while AION is based here,” Mr Rezos said
Patersons Securities analyst Kim Christie says 2005 is shaping up to be a “particularly interesting year” for pSivida, with more advanced brachytherapy trials getting under way and licensing agreements expected to generate revenue.
She remains positive about pSivida’s prospects.
“Despite the rise in the share in the current year, pSivida remains an attractive option in the increasingly important nanotechnology sector.”
