Multi-million dollar licensing deals signed

Media Release from Industrial Research Limited

13 February 2006

Multi-million dollar licensing deals recently signed with international pharmaceutical companies will give a significant boost to Government-owned technology company Industrial Research, chairman Liz Coutts announced today.

The latest deal – the second in three months – gives Industrial Research a share of an immediate US$10 million payment. Potentially Industrial Research will also receive an ongoing share of US$155 million of milestone payments, conditional on continued success as the drug is developed for the market, with royalties from sales in addition.

This deal involves an anti-cancer drug originally developed by Industrial Research and the Albert Einstein College of Medicine in New York, and licensed to US biotechnology company BioCryst Pharmaceuticals. In turn rights to the drug in Asia and Europe have been sub-licensed by BioCryst to MundiPharma Pharmaceuticals based in Switzerland.

While Industrial Research is unable to disclose details of its share of payments due to explicit restrictions in its contract, up front payments are substantial.

An earlier deal was announced late last year when BioCryst sub-licensed another drug for controlling auto-immune diseases to pharmaceutical company Roche.

Initial payments to BioCryst from Roche under the collaboration agreement are US$25 million upfront. Of this, the inventors Industrial Research and Albert Einstein College of Medicine will together receive several million dollars.

Potentially again, there will be an ongoing share of an expected US$530 million in progress payments, with royalties from sales in addition, if the drug successfully makes it through the stages to market.

This deal was itself the fifth largest biotech-pharma deal in the world for 2005, Industrial Research’s acting CEO, Tony Price, said.

These deals demonstrated the potentially enormous rewards possible when working in experimental, high-technology areas, he said.

“Although there are high rewards if successful, there are also high risks.

“We will have successes and we will have failures. Our challenge is to manage those risks as much as possible. Getting the balance right is essential if New Zealand is to move to a knowledge-based economy.”

Apart from these international successes, Industrial Research was also actively working with pharmaceutical companies in New Zealand, Dr Price said.

It had a close partnership with New Zealand Pharmaceuticals which was gearing itself up to compete to supply substantial quantities of components for the drug licensed to Roche.

Industrial Research was also a key part of a group of local service suppliers that enabled New Zealand company Antipodean Pharmaceuticals to develop a drug with the potential to treat Parkinson’s Disease that was discovered at University of Otago.

This group includes Douglas Pharmaceuticals, ESR, University of Otago, Christchurch Clinical Studies Trust and NZ Pharmaceuticals and is the first drug candidate to have been locally discovered and developed. It received support from the FRST Technology for Business Growth scheme.

Dr Price said Industrial Research provided an experimental and scale-up capability for companies often in the early stages of development themselves. In many cases the market may not even exist or at least not be well developed.

Based on its areas of world-class science, not just in biotechnology, but areas like superconductivity and energy, Industrial Research was creating “a beach head for New Zealand industry to follow”, he said.

ENDS

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