Xcell move disappoints stranded WA researchers

Researchers at the Optical and Biomedical Engineering Laboratory (OBEL) at the University of WA were left surprised and disappointed after a decision by Perth-based company Xcell Diagnostics (ASX: XEL) to withdraw funding from the lab's skin cancer project, which aimed to develop a new optical pen probe technique for early detection of skin cancers.

According to Xcell company secretary Colin McDonald, the company has decided to focus on camera-based technology obtained through its recent acquisition of German firm VisioMed. VisioMed's MicroDERM dermatoscope system is already on the market in Europe and Australia.

McDonald said that the OBEL research, which was developing biophotonics techniques based on diffuse reflective spectroscopy, was still three to four years from producing a commercial product and would require significant additional funding to get it to the market.

OBEL head Prof David Sampson said Xcell's decision effectively left the group with no funding to continue its research.

"It's certainly going to leave a hole in it. If we can't find an alternative source of funding, we'll have to scale down a lot," he said. "We hadn't anticipated this, the project had another year to run."

Sampson said that the project was on track and the researchers had hoped to make a lot of progress in the next year. "We'd put together a good team of people, we were going to add a lot of value in the next year," he said.

He speculated that the lab might now find itself in a difficult position when it tried to find a new source of funding, noting that investors would be reluctant to invest in a project that had been dropped by others.

"But in a sense, it's a golden opportunity for investors as more than $1 million has been spent on the project, which has run on time and on budget," Sampson said. He also noted that the intellectual property from the project would revert to UWA.

"Our preferred position would be to move toward our objective."