MELBOURNE, Australia, June 20 /PRNewswire-FirstCall/ -- As foreshadowed at its AGM last October, Australian biotech Amrad today announced it will spin-out its advanced anti-infectives drug portfolio into a new corporate entity, Avexa Limited. The spin-out will be effected by a demerger to existing Amrad shareholders.
Thus, Amrad shareholders will become entitled to shares comprising approximately 80% of the demerged company while Amrad itself will retain an estimated 19.99%. Amrad will invest $12 million in Avexa and these funds will be used as initial working capital to complete proof-of-concept animal trials for each of its three anti-infectives research projects.
It is planned to list Avexa on the Australian Stock Exchange later this year with a market capitalisation of $24 million.
Avexa is developing novel therapies that could represent early market entrants in new drug classes for the treatment of major diseases including HIV/AIDS, Hepatitis B and antibiotic resistant bacterial infections.
Amrad Chief Executive Officer, Dr Peter Smith said the Avexa demerger was a logical split, allowing Amrad to strategically focus on its core biological products, with Avexa having the resources to vigorously pursue its anti- infectives programs.
"The value of Avexa's anti-infectives research projects will be clearly visible and easily assessed by the capital markets, whereas little value is attributed to the projects while they are embedded in the Amrad research portfolio. By spinning out Avexa we will create two companies with excellent prospects, distinct strategic priorities, and tightly focussed management teams" Dr Smith said.
"Upon listing, Avexa will commence business in a highly competitive position in a world market worth more than US$6 billion per annum," Dr Smith said.
"This is a timely move. Globally, there is growing demand for new and improved anti-infective treatments. This demand is fuelled by both the adverse side effects of current treatments, and by the continued spread of drug-resistant organisms," he said.
Dr Smith said the spin-out deal was dependent on Amrad shareholder approval at a General Meeting expected to be held in September and subject to an independent valuation of Avexa. Further information will be circulated to Amrad shareholders shortly.
"The Amrad Board unanimously recommends this strategic initiative. It's a significant move that is well directed, well timed and in the best interests of all Amrad shareholders," he said.
The Avexa projects will be led by some of Amrad's most experienced scientists who will transfer to the new company.
Amrad Corporation Limited is an Australian drug discovery and development based biotechnology company. Amrad's in-house R&D expertise is focused on a number of priority projects in the areas of allergy, inflammation and infectious diseases. Further information about projects in drug discovery and development can be found at http://www.amrad.com.au/.