Select Vaccines boosted by licensing agreement

Select Vaccines (ASX: SLT) shares jumped 18 per cent to close at AUD$0.33 yesterday after the company announced it had successfully reached an agreement to license its hepatitis E laboratory and point-of-care diagnostic tests to Genelabs Diagnostics.

The agreement was initially flagged in September last year, when the two companies entered a technology evaluation phase and gives the Singapore-based diagnostics company rights to manufacture, market and distribute Select's tests globally outside the US.

Select has the only rapid point-of-care diagnostic test for hepatitis E and studies by GeneLabs and US Armed Forces Research Institute of Medical Sciences have confirmed the sensitivity and specificity of both tests.

While financial terms of the deal are confidential, Select will receive upfront payments, as well as ongoing royalties for the 12-year life of the licence.

"The completion of this transaction marks an important phase in the development of Select Vaccines from a pure R&D status to one with a mix of on-going revenue-generating and development products," said Select's managing director Dr Martin Soust.

He said that the company expected that once the tests were on the market, the number of tests sold would be well up into seven figures.

The major markets for the tests will be in developing countries, particularly in Indian subcontinent, China, the Middle East and South East Asia where hepatitis E is endemic. Soust said it was likely that the rapid test would be particularly useful in these areas as a field test, and noted that there had already been interest from some global medical organisations in the test.

Evaluations of Select's hepatitis A rapid diagnostic test by a number of companies are continuing, according to Soust, and the company hopes to be able to enter into one or more agreements over the technology in the near future.

"We are confident we have a few parties interested in selling the test either globally or regionally," he said.

Select is also developing a hepatitis C rapid diagnostic, but Soust said the company was still evaluating the test, and hoped to reach commercial viability later this year.