GroPep offloads IP to concentrate on protein pharma

South Australian drug discovery company GroPep (ASX:GRO) has begun selling off sections of its newly acquired intellectual property treasure chest.

The IP, purchased as part of GroPep's buy-out of Biotech Australia, relates to the use of vitamin B12 to deliver anti-cancer drugs directly to tumours.

Managing director Dr John Ballard yesterday announced the technology had been sold to Texan company, Access Pharmaceuticals.

"They are much better placed than us to commercialise it successfully because of the excellent product fit with their existing anti-cancer program." he said.

GroPep expects to receive about $3.5 million through the transaction, most of which is to be paid immediately.

The Thebarton biopharmaceutical group will also receive continued payments through the leasing out of surplus laboratories, offices and support facilities to Access.

Ballard said the sale almost offset the $4 million GroPep paid for Biotech Australia's entire IP portfolio, with the remaining patents expecting to bring in $1.5 million in royalties in 2002/3.

"We will share in any upside from Access Pharmaceuticals' success because part of the transaction payment is in the form of Access shares," he said.

"GroPep also gains options to purchase Access shares in the future at current prices".

He said the sale enabled the company to remain focused on protein pharmaceuticals.