Panbio pulls back from dendrimer joint venture

By Pete Young
Monday, 04 March, 2002

A million-dollar collaboration between nano-drug company Starpharma and diagnostics specialist PanBio Ltd has come unstuck.

Only a few months after announcing a $1 million investment in a joint venture, Dendritic Nanotechnologies Ltd (DNT), PanBio has pulled out of the agreement.

The company has effectively decided it makes more sense to access dendrimer technology via licensing agreements than to buy an equity stake in the technology itself.

Dendrimers are tiny molecular structures can be constructed using nanotechnology techniques to interact with cells. They could facilitate delivery of therapeutic material to cells without triggering body immune responses.

Ongoing verbal agreements with Starpharma will survive PanBio's withdrawal from the heads of agreement pact, according to PanBio CEO Mel Bridges.

Bridges said he talked by phone on Friday with the third party in the joint venture, US scientist and dendrimer discoverer Prof Donald Tomalia, and described him as "comfortable" with the situation.

In strategy discussions immediately following public announcement of the deal last month, it became apparent the joint venture was "not necessarily the most efficient way for us to adapt the technology to a new generation of diagnostics," Bridges said.

PanBio is interested only in dendrimers focused on diagnostic products, while DNT was aiming for broader spectrum of development, including non-drug uses.

Bridges said he was not embarrassed by PanBio's quick about-face on the deal.

"This happens all the time with deals," he said. "It was only a heads of agreement and it doesn't interfere with DNT being formed or funded."

PanBio's half-year results are due out Tuesday and the company has experienced very modest cash burn, Bridges said. Its withdrawal from DNT won't trigger any penalty clauses and its $1 million is now freed up for other R&D programs.

At the top of its agenda is ramping up R&D to bring a string of infectious disease diagnostics to market on a new rapid testing platform it has developed for doctor's offices or field use.

It is also close to finalising collaboration with an undisclosed partner to move into development of biochips for rapid screening of infectious disease organisms.

The door remains open for PanBio to strike closer licensing arrangements with Starpharma if significant breakthroughs in dendrimer development occur.

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