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Australian healthcare company Stirling Products (ASX: STI) has signed a final agreement for the highly promising High Density Aerosol (HDA) technology with its partner Zodiac Capital and Sheiman Ultrasonic Research Foundation Pty Ltd.
Under the agreement, the Stirling / Zodiac joint venture acquired the rights to commercialize a new patented class of drug inhalation devices that represent a revolutionary platform in drug delivery.
Managing Director Peter Boonen said: “This HDA technology is absolutely unique in its efficiency and potential.
It will provide a platform for the company to potentially improve its own product lines and also to take advantage of technology in some of the world’s most valuable drugs that are unpatented or out of patent. “
The main advantages of drug delivery (by inhalation) using HDA technology, is that it promises to provide the same efficacy as drugs taken by mouth – with a much less active drug content.
Subject to formal validation of trials, using HDA technology would increase drug safety and significantly reduce side effects for patients.
The primary prize for Stirling products and HDA technology is its potential use in drug delivery (and revenue potential) in some of the world’s leading blockbuster drugs, as they become patented over the next three years. years.
The HDA delivery platform provides an entry point into this huge, multi-billion dollar market for the company.
And, can potentially be used for the administration of most drugs.
According to the company, more than 36 major drugs will be withdrawn from the patent by 2012.
Importantly, an early single dose nebulizer using the HDA technology device from the Sheiman Ultrasound Research Foundation has received 510K approval by the US Federal Drug & Administration (FDA).
The new devices will incorporate newly patented technologies and capabilities.
HDA technology uses focused ultrasonic energy to form a fountain of nebulized liquid that produces an aerosol from the walls of the jet that automatically propels itself at several meters per second through a chimney-shaped intake tube.
The atomization of the liquid occurs at the base of the jet inside the intake tube. The aerosol of microparticles is then transported to the user by positive dynamic pressure inherently derived from the kinetic energy of the jet. It therefore does not require any compressed gas or air flow driven by a fan to transport the aerosol to the user.
This greatly increases the concentration of the aerosol by eliminating both the gas / ventilator dilution effect and reducing the drug loss associated with the condensation of the aerosol within the nebulizer chamber.
Compared to oral administration, tests have shown that significantly less active drugs may be needed. While providing the same benefit, it can also increase safety and reduce side effects.
The financial terms of the agreement are as follows:
– Stirling / Zodiac Capital will each pay $ 250,000 to Sheiman Ultrasonic Research Foundation, payment was made by issuance of shares
– The Stirling / Zodiac joint venture to pay the phased financing costs of the commercialization process starting immediately
– The first step over the next 12 months will be the pre-production development of the first HDA devices with budgeted costs of around $ 600,000
– The joint venture will establish an operating budget of $ 5-6 million, through a series of grants, to test targeted off-patent drugs for human use, which is expected to begin in 12 months
– Stirling and Zodiac will hold 65% of the gross profits from the sale of all HDA devices and 65% of the gross profits from the sale of all or part of the off-patent drugs suitable for use in the new HDA platform.
“With this technology, we can effectively have the exclusive rights, subject to validation of trials, to the enhanced version of each of the non-patented drug candidates that we undertake,” said Peter Boonen.
Obviously, the potential revenue opportunity for Stirling Products with HDA technology with unpatented blockbuster drugs, put through trial testing, could be a potential business creator.
While funding risk would typically be a factor in advancing technology to the developmental stage, the business and technology have their admirers, both locally and internationally.
By bypassing this funding risk, it would allow the company to focus on rapid validation of trials and device testing. An earlier version of the technology will ease the development curve. Take full advantage of Stirling in the multi-billion dollar revenue market of successful off-patent drugs and large global pharmaceutical companies.
Once this step is taken, the keys to the kingdom are within reach for Stirling products. The current market valuation would then appear to be a pocket change in the years to come. That said, volatility is still a factor in emerging business investment.
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