West Perth-based biotechnology company Rockeby Biomed Ltd has signed a Memorandum of Understanding with Pacific Biotech, whereby Pacific will assign the ownership of the avian and human influenza rapid diagnostic tests to Rockeby .
West Perth-based biotechnology company Rockeby Biomed Ltd has signed a Memorandum of Understanding with Pacific Biotech, whereby Pacific will assign the ownership of the avian and human influenza rapid diagnostic tests to Rockeby .
The company said the change from the previous marketing agreement to a full rights agreement would result in a reduction in the direct cost of both products of approximately 70 per cent.
Rockeby said the reduction would give the company a competitive edge in the market, and improve the long-term financial return to Rockeby.
Upon the successful execution of the MOU, Rockeby will pay an upfront fee and a single digit royalty. The figures cannot be disclosed under a confidentiality agreement between the parties.
The company expects to execute the MOU into a full agreement within 3 months subject to the satisfactory completion of due diligence.
At 1100 WST, shares in Rockeby were up .4 cents to 2.9 cents.
Last week, the company announced that it had received and dispatched an order for 7,000 of its rapid diagnostic tests for Avian (or Bird) Flu to Romania.
The National Sanitary Veterinary and Food Safety Authority in Bucharest, Romania, reported on 16th May five new outbreaks in that country.
The Rockeby Avian Influenza Virus Rapid Kit is recommended by the Institute for Diagnosis and Animal Health.
In February, the company completed further distribution deals in Europe for its Avian bird flu diagnostics as the strain of avian influenza A, H5N1, spread from Asia to the European Union.
Below is the full announcement:
Rockeby Biomed (ASX: RBY) today announced that it had signed a Memorandum of Understanding (MOU) with Pacific Biotech, whereby Pacific Biotech will assign the ownership of the avian and human influenza rapid diagnostic tests to Rockeby .
The change from the previous marketing agreement to a full rights agreement will result in a reduction in the direct cost of both products of approximately 70%. This significant reduction will give Rockeby a competitive edge in the market, and improve the long-term financial return to Rockeby. With the spread of the H5N1 virus, commonly referred to as the avian or bird flu, this test has become an important product in the Rockeby portfolio of rapid tests and is expected to be a major contributor to revenue growth over the next few years.
Upon the successful execution of the MOU, Rockeby will pay an upfront fee and a single digit royalty. The figures cannot be disclosed under a confidentiality agreement between the parties The key components of the MOU are:
- Rockeby will acquire all the intellectual property relating to the Vet-Smart Avian Influenza Virus and Bioline Human Influenza A tests, and its related manufacturing technology. These are marketed respectively as the Rockeby Avian Influenza Virus rapid test and Rockeby Human Influenza A Virus rapid test;
- Rockeby will pay an initial upfront fee and a royalty on sales of these products based on audited accounts;
- Rockeby will acquire the rights globally, significantly extending opportunities to increase sales;
- A manufacturing agreement with Pacific Biotech will result in a reduction in the cost of goods sold by Rockeby of approximately 70%;
- Rockeby must order a minimum annual quantity of 100,000 of the Avian Influenza Virus test and 50,000 of the Human Influenza A Virus rapid test; and
- The term of the assignment is for an initial three years with an automatic extension for another three years
"Rockeby has a suite of rapid diagnostic tests and is now considered a leading provider of a test to quickly detect the avian flu which is spreading at an alarming pace," said Dr Sze Wee Tan, CEO of Rockeby Biomed.
"By acquiring the rights for these tests from our current licensor we have much greater scope to respond to the demand for both the avian and human tests, and to control costs which will ensure we improve our sales margins."
Avian Flu, also known as bird flu, is an infectious disease of birds caused by Type A strains of the avian influenza virus (H5N1). All birds are susceptible to infection and there are also now cases of the virus spreading to humans. The virus has now been detected in 32 countries with millions of bird destroyed and 124 human deaths.
Since the launch of the tests in November 2005, Rockeby has won a number of tenders to supply its rapid diagnostic tests to governments, veterinary associations and commercial poultry farms in countries including Singapore, Thailand and Romania. Additionally, Rockeby is selling its tests in Singapore, Malaysia, Thailand, India, Japan, Korea, UAE, Iraq, Iran, Lebanon, Greece, Switzerland, Poland and Italy.
The company expects to execute the MOU into a full agreement within 3 months subject to the satisfactory completion of due diligence.
About Rockeby's test
The two test kits are for the detection of influenza A virus, including the H5N1 subtype, the agent that causes the bird flu that has been found to infect humans who come into close contact with birds, causing serious and often fatal disease.
One of the tests is a rapid screening method that measures bird flu proteins in samples taken from human nose or throat. The other is a veterinary diagnostic for on-site testing of bird faeces.
Both tests rely on immunological detection of viral protein and have the advantage of being self-contained and yielding the result within 10 minutes of application of the sample to the testing device.
About Rockeby Biomed:
Rockeby Biomed Limited is Singapore-based, ASX-listed (ASX: RBY) biotechnology company specializing in research, development and marketing of rapid testing technologies for infectious disease in humans and animals. The company's core specialization is the development of rapid testing diagnostics.
