Ellex awarded $3.3m R&D grant

Adelaide company Ellex Medical Lasers (ASX:ELX) has been awarded a AUD$3.3 million R&D Start grant from the federal government to develop a new ophthalmic laser device.

According to CEO Victor Previn, the company announced a new product development strategy last year targeting the expanding photocoagulator market. Photocoagulators use finely focused lasers to cauterise blood vessels in the retina. The grant will be used to develop a multi-wavelength photocoagulator system, that will have the capabilities to treat different areas of the eye, depending on the wavelength selected, providing greater flexibility to the surgeon.

"Our intent is to develop instrumentation that has several wavelengths available in one instrument with an ergonomically friendly and efficient design," Previn said.

He estimated that it would take more than two years of the three-year grant to develop the device to prototype stage.

The expected market size for a ophthalmic laser of this kind would be significant, Previn said, and the company would expect to sell hundreds of units annually at a cost of around $100,000 per instrument, especially in the US and Japanese markets.

Previn said the receipt of the Start grant made it feasible to accelerate the development program for the photocoagulator, providing a significant proportion of the costs. Matching funds would be provided by the company out of revenues from existing products.

"The industry is moving very rapidly and dynamically -- it's important to move quickly," he said. "[The grant] will help us fast-track our product development."