Psivida spins out diagnostic specialist

Perth nanotechnology company Psivida (ASX: PSD) has spun out an Australia-based diagnostics company, AION Diagnostics.

With seed funding of AUD$1.2 million and licences to diagnostic and biosensor applications of Psivida's BioSilicon platform technology, AION will focus on development and commercialisation of a diagnostics product portfolio, leaving Psivida to focus on slow release drug delivery technologies and PsiOncology to pursue brachytherapy applications.

According to Psivida CEO Gavin Rezos, the new company will have sufficient funding for around 12 months.

"We expect the next round of funding to involve an overseas industry partner and maybe a venture capitalist," Rezos said.

Following that, AION is likely to IPO on the ASX, possibly in as little as two years, although after Psivida completes its own listing in the USA. According to Rezos, Psivida shareholders would receive a free distribution of AION shares.

Psivida's head of diagnostics Dr Anna Kluczewska will move to AION as managing director. Kluczewska formerly managed a global product portfolio for Baxter Healthcare's BioSurgery division. And Psivida's director of strategy Roger Aston will undertake a similar role in AION as an executive director.

Initially the company will develop diagnostics products through strategic collaborations with universities and research institutes, both in Australia and overseas. AION has a number of projects in the works including the development of silicon mirror technology acquired last year from German research agency Forschungszentrum Julich.

Rezos said the spin-out was an important milestone for Psivida, which could be repeated in the future in other areas of application for the company's platform technology.