Joint venture saves Living Cell Technologies from closure
Wednesday, 02 November, 2011
Living Cell Technologies (ASX:LCT) lives after seeing a $25 million injection of cash thanks to finalising its 50/50 joint venture with Otsuka Pharmaceutical Factory, based in Japan.
The injection of funds comes at a crucial time, with the company running low on cash reserves and possibly facing closure within six months, LCT CEO, Professor Bob Elliott told the New Zealand Herald.
Read more about Living Cell Technologies.
The joint venture company will be called Diatranz Otsuka, and will focus on the development and commercialisation of LCT’s DIABECELL technology for the treatment of diabetes.
While Otsuka contributed the $25 million to the new company, LCT contributed assets associated with DIABECELL worth a similar amount, including patents, trademarks, R&D manufacturing facilities along with the specially bred pigs that produce the insulin-producing cells at the core of the technology.
As a part of the joint venture, LCT will retain an exclusive royalty free license to key patents and IP, and Diatranz Otsuka will provide services to LCT to further develop its other technologies besides DIABECELL.
The joint venture will continue to conduct product refinement and clinical trials on the product, which are expected to continue for up to three years before seeking registration in New Zealand.
Living Cell Technologies (ASX:LCT) jumped by 13% as of 11am on the back of the news, to 6.8c.
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