Starpharma has option to ditch PDF status

The board of Melbourne nanotechnology company Starpharma (ASX:SPL) has been given the discretion to give up the company's pooled development fund (PDF) status if it becomes necessary.

According to CEO Dr John Raff, the move means that if an opportunity comes up to increase its investment in US subsidiary Dendritic Nanotechnologies (DNT), or to merge with another company, the board will be able to make that decision in a day, rather than having to wait for the 6-8 weeks required to put it to the shareholders. In addition, a rapid decision means the share price is locked in, rather than being subject to manipulation.

"We're not giving up our PDF status, we still believe in the incentives of the system, but the option is now there," Raff said. "We want to outgrow the PDF one day."

Raff said that the decision, which was passed by a healthy majority of shareholders at the EGM on Thursday, also demonstrated confidence in Starpharma's board of directors.

Starpharma also gained a new substantial holder this week -- investment management group Acorn Capital, which now holds 5.45 per cent of the company's shares.

Acorn has invested on behalf of a number of interests, including the Queensland Investment Corporation, its own Microcap Trust fund, and two superannuation funds, the Commonwealth Bank Officer's Superannuation Fund and UniSuper.

According to Raff, the additional investment makes Acorn the largest institutional shareholder on the company's books. "We're delighted to have them on board," Raff said. "They're a good supporter of the biotech industry."