We recently profiled several nanobio companies that are developing novel and improved drug delivery technologies. On the day that profile was published, nanobio company pSividaLtd. (NASDAQ:PSDV), working on yet another competing nano-inspired drug delivery technology, listed with the Nasdaq.
The company has listed American Depositary Shares (ADS), with each ADS representing 10 of its ordinary shares trading on the Australian Stock Exchange. Not all of the companies we have profiled will become Rule Breakers, but some will -- and pSivida has a lot going for it.
Founded in 2000, pSivida is an Australian company with global ambitions, having also listed on the Frankfurt exchange. Europe's largest research organization, QinetiQ, itself majority owned by the U.K. government, is its single largest shareholder, with 17.5% of the company.
The company's lead product is Brachysil, a radiotherapy product that is currently completing phase 2a trials for treatment of patients with inoperable liver cancer. Initial data from those trials has led pSivida management to forecast commencing phase 2b trials in 2005. They hope to take a "device-based" regulatory route, avoiding the lengthier full trial process.
pSivida also has announced that its underlying delivery technology platform, BioSilicon, is being evaluated by a "top 5" U.S.-based pharmaceutical company, and hopes are high for a licensing deal within the next 12 months. The nanobio company already has a licensing agreement in place with Itochu for the Asian market. If the product completes the trial process successfully, company leaders anticipate commercial revenues from Brachysil in 2007. Confidence is so high, they have already established a manufacturing agreement.
Not just electronics
Silicon is more commonly associated with the electronics industry, but it does have various medical benefits. It is used in stents and cochlear implants, for example. pSivida has created biocompatible and biodegradable silicon produced as nanostructures that it has trademarked as BioSilicon.
BioSilicon takes on a honeycomb structure that can encapsulate drugs. The breakdown of the structure in the body allows for the controlled, sustained release of the drugs. In the case of Brachysil, the silicon encases radioactive "seeds" that deliver controlled radiotherapy to tumors. That approach, called brachytherapy, is standard for certain prostate cancers, but the BioSilicon technology allows for the use of a shorter-range, longer-lasting isotope (phosphorus 32) that could make treatment better targeted, less toxic, and possibly more effective.
pSivida claims current brachytherapy technology damages healthy tissue surrounding a tumor and is neither as precise nor as controlled in its delivery targeting as is Brachysil.
According to recent SEC filings, pSivida recorded only $300,000 in revenues for its last financial year and posted a loss of nearly $3.1 million. However, the company spent $5.5 million on R&D, which is to be expected when running phase 2 trials on the lead target and phase 1 trials for various other targets. pSivida had $24 million at the end of the last reported quarter and can add to the money raised with the new listing. At its current burn rate, the company should not run out of money before its products receive validation and/or licensing revenues start to roll in.
The company has an experienced management team, and two of the founders are still in place and remain significant shareholders in the company. They have not sold any shares in the company since its inception.
Investors in American Pharmaceutical Partners (NASDAQ:APPX) have already seen the benefits of nano-inspired drug delivery technology. Those looking for a repeat performance would do well to consider a basket of the companies we have profiled in Motley Fool Rule Breakers -- and pSivida could be in that basket.
If you're looking for the next growth company in this groundbreaking field and others like it, we urge you take a no-obligation free trial to our ultimate growth service, Motley Fool Rule Breakers.
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Neither Carl Wherrett nor John Yelovich owns shares in any of the companies mentioned in this article. You can reach Carl and John via email. The Fool has a disclosure policy.
