WA biotech mines double benefit from listing vehicle

Backing hopeful young companies into the listed shells of mining companies is an old habit in Western Australia.

Perth-based anti-cancer drug developer Solbec Pharmaceuticals (ASX: SBP) trod the same path last May when it chose mineral explorer Britannia Gold as a listing vehicle.

But where most backdoor listings simply provide a convenient mechanism for raising fresh funds from investors, Solbec followed a cleverer script.

Britannia Gold came complete with assets which have left Solbec with $3.5 million in cash and a parcel of mining properties whose planned sale this year should further inflate its bank balance.

Solbec also expects revenues this year from its $850,000 stake in a joint venture with WA company Lawley Pharmaceuticals to register and market a range of hormone replacement products.

The cash in hand and potential revenue streams leave Solbec in an "enviable position" compared to many young biotechs seeking R&D financing, said managing director Stephen Carter.

Its lead project involves a mixture of steroidal glycoside molecules named BEC, which shows a high selectivity toward tumour cells relative to healthy cells.

BEC appears to recognise specific receptors which Solbec believes are common to most cancer cells.

It is present in devil's apple, a plant thought by livestock owners to slow the growth of various skin cancers on horses and cattle.

Solbec has licensed commercialisation rights to BEC from its discoverer, former University of Queensland researcher Dr Bill Cham, and is exploring BEC's potential as both a diagnostic agent and a treatment agent for cancers in humans and animals.

It is focusing primarily on the treatment of mesothelioma, an asbestos lung cancer, and metastatic melanoma of the lung.

Trials have shown BEC causes regression of melanoma tumours in mice and Solbec is now putting together financial protocols and ethics submissions for human trials.

By the end of this year, the company hopes to have Phase I trials completed and the technology licensed out for further development.

Solbec's share price, which sagged as low as nine cents late last year, recently broke through to new highs of around 25c.

The rise "indicates the market is beginning to have a better understanding of what our technology is about," Carter said.