Alchemia finalising oncology spin-off

Alchemia Limited (ASX:ACL) has revealed it is currently finalising the planned structure and process for the proposed spin-off of its oncology business into a separately listed entity.

In a presentation to potential investors, CEO Dr Pete Smith said he believes the spin-off will maximise value for Alchemia shareholders.

Alchemia first revealed plans for the split, which still requires shareholder approval, in November last year.

The proposed process would see Alchemia listing its oncology business as a stand-alone company, either in Australia, the US or both.

The new entity would remain 100% owned by Alchemia shareholders following the spinoff. It would concentrate on commercialising Alchemia's HyACT platform for the delivery of chemotherapy drugs to tumours.

The company is currently developing HA-irinotecan, which is produced using HyACT technology by combining chemotherapy drug irinotecan with hyaluronic acid.

At the presentation, Smith revealed that Brisbane-based Alchemia had a market capitalisation of $135 million as of December 2011.

He said that that if HA-irinotecan development is successful it would be a new branded product, giving it a price premium over generic irinotecan.

Irinotecan was first developed by the Yakult Honsha Company and the Daiichi Pharmaceutical Company. It is marketed by Pfizer as Camptosar.

Camptosar had peak sales of US$970 million ($930.4 million), but has been generic in the US since 2008, Smith said.

Alchemia (ASX:ACL) shares grew 8.6% in Wednesday's trading to $0.505.