Thursday 25th January 2018
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Living Cell Technologies has sold its half-share in a joint venture with Japan's Otsuka Pharmaceutical Factory for A$3 million, giving the Kiwi biotech firm enough funds to keep operating for the next two-and-a-half years.
Auckland-based Living Cell's exit from the joint venture company Diatranz Otsuka settles on Jan. 31, and the former partners have agreed to sign a memorandum of understanding to exclusively license the New Zealand firm to use diabetes treatment Diabecell in Australia, Argentina and NZ when it's approved by the US Federal and Drug Administration, and to supply product on favourable terms.
The joint venture company licensed Otsuka Pharmaceutical to use Diabecell in the US and Japan and undertook to develop it in the US, but that took longer than anticipated and Diatranz Otsuka doesn't have the capacity to manufacture the treatment. Living Cell said because it couldn't add value to the joint venture it decided to sell its stake and use the funds to develop its own products.
"Effectively, these extra funds are projected to extend our cash runway out to approximately 2.5 years," chief executive Ken Taylor said. "In that time, we believe NTCELL and products in our pipeline, which include pericyte protective agents, can be funded to generate an exit position favourable to shareholders."
The transaction comes after Living Cell had to push out plans bringing its Parkinson's disease treatment to market after clinical trials showed no statistically significant difference from the control group.
Living Cell had cash and equivalents of A$5.2 million as at Dec. 31, with operating cash outflow shrinking to A$780,000 from A$1.4 million in the prior period.
The ASX-listed shares rose 3.6 percent to 2.9 Australian cents. The shares rose as high as 25.2 cents in October last year on growing optimism Living Cell's NTCELL product could be commercialised before plunging on the inconclusive trial.
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