Psiron license triggers $2.5m raising

Sydney-based biotech Psiron (ASX:PXS) is putting its house in order -- having announced its intention to license oncolytic enteroviruses technology from University of Newcastle alumnus Virotarg, the company today said the license would trigger an AUD$2.5 million capital raising.

The equity and cash proposal values Virotarg's intellectual property and patents at close to $10 million. To raise the $2.5 million, Psiron plans to place 13,300,000 ordinary shares at an issue price of $0.19 a share, a discount to its current share price, which is in the 20 to 23 cent range.

Psiron's CEO, Julie Nutting, said the Virotarg project, published recently in Clinical Cancer Research and also covered by The Lancet Oncology, would become the company's key focus. "I think that this has got every sign of being a company-maker," she said.

She speculated that Virotarg would either be set up on its own as an oncology business or licensed out to big pharma. 'We're looking to fund this adequately," she said. "As a small company you can stretch development out because of poor financing which cuts into your patent life and [you lose your] advantage against competitors."

The Virotarg intellectual property licensed by Psiron relates to several strains of oncolytic viruses, which attack cancer cells. In animal trials, the therapy has shown potential against a range of cancers including melanoma, breast, prostate, ovarian and colorectal cancer. Nutting said Phase I clinical trials would take place once a good quality clinical trial stock for administration in patients had been manufactured. This is expected in the next 12-18 months.

Psiron also owns 45 per cent of drug delivery business InJet Digital Aerosols, which last year signed a worldwide licence agreement with Japan's Canon, providing it with exclusive worldwide rights to the Vapotronics inhaled drug delivery system.

"We're looking to develop some new IP in that business and then list it on a foreign stock exchange," said Nutting.

Nutting said the license agreement was expected to be finalised before the end of July.