Polymerat cheered by new development agreements

Materials science start-up Polymerat has glimpsed light at the end of the tunnel by signing its first joint product development agreements with established biotechs.

According to Polymerat CEO Jason Armstrong, one pact is with Biosource International, a Nasdaq-listed life sciences company which develops and distributes reagent systems to biomedical researchers. The other is with Proteome Systems, a leading Australian player in the proteomics technology, diagnostics and discovery fields.

Neither agreement will translate into immediate revenues for Polymerat, which has reduced staff numbers by about 60 per cent so far this year in order to cut cash burn.

By demonstrating the interest of established players in Polymerat's technology, however, the deals should hearten in investors, led by venture fund CM Capital, who have invested more than AUD$6 million in the company so far.

The Biosource agreements provides for a milestone payment when joint product development is completed in about nine months plus royalties on any sales.

Armstrong declined to provide specific financial details for either of the two agreements.

Although the two pacts cover different materials, the common denominator is Polymerat's high-throughput discovery engine for generating microplate and biochip surfaces tailored for testing specific proteins.

The surfaces are selected in ways which simplify the assay process and optimise the quality of test data. Polymerat's methodology for developing new surfaces starts with a library of surfaces from which fresh variants are created through combinatorial chemistry. Candidates are screened and rated in terms of the strength of their reactions with target proteins. An iterative process driven by informatics then produces an optimised result from thousands of potential surfaces in a very competitive time frame.

Polymerat has been on an extended hunt for fresh funds and although it has received some positive response, it is still looking for "$2-3 million," said Armstrong.

An investment manager with CM Capital, Armstrong recently took over the CEO post from company founder Nobuyoshi (Joe) Maeji, who has moved into the role of chief scientific officer.

"Raising the funds is taking about as long as we thought it would," said Armstrong.

CM Capital remains a strong believer in the company and is involved in the current investment round, he said. "Venture capital is scarce, and a second issue is that negotiating paying deals in the US is difficult because of their tight economy which is making companies focus more on existing product lines."