Optiscan strikes 'company-making' deal with Pentax

Optiscan Imaging's flexible confocal microscope technology is to be developed and commercialised by marketed by Asahi Optical in a $20 million deal.

Asahi, better known as Pentax, is a global leader in flexible endoscopy.

The agreement, described as "company-making" by Optiscan managing director Peter Delaney, will give Pentax exclusive global rights to market Optiscan's high-magnification flexible endoscopes.

The Optiscan technology is already near completion, and the company expects it to hit the market within 18 months.

"We have been making the transition from product development to commercialisation and marketing and this crystallises the reality of the market potential and technology," Delaney said.

As part of the deal, Pentax agreed to take a placement of 3.33 million shares in Optiscan at $US1 per share, which at the time the agreement was struck marked a 100 per cent premium to the company's market price.

Delaney said the price demonstrated Pentax's recognition that Optiscan was undervalued. "This technology brings to the table true microscopic magnification without having to prepare the tissue to go under the microscope, and the amount (Pentax) was willing to pay shows the value of this technology," he said.

"We have been pursuing a relationship like this for a while, so now we are in the situation where, with their payment, we are cashed-up to go hard at this and other developments."

Unlike traditional endoscopes, which simply identify abnormal cells for biopsy, Optiscan's endomicroscope will have the ability to zoom in at individual cell level. Delaney said this meant it could potentially look at more tissue than could be examined in a biopsy.

He said the technology would be particularly beneficial in the diagnosis and management of diseases such as colon, mouth and gastric cancer, where abnormal tissues could be easily missed.

Delaney said Pentax's equity in Optiscan cemented future collaborative products in the area of flexible endomicroscopy.

"This is exactly the right vehicle to take our miniaturised microscope technology to the next stage," he said.

As part of the deal, Pentax will pay an initial fee to further develop the technology and another on completion of the development phase. The company will then integrate Optiscan's proprietary imaging technology into its own flexible endoscope system in exchange for undisclosed ongoing royalties to the Australian group.

Delaney said Optiscan's rigid endoscopes and hand-held skin endoscopes were not covered in the agreement.

Optiscan is a Melbourne-based company, and listed on the ASX in 1997.