Plant-based health and wellbeing company Algae.Tec (ASX: AEB) has inked a binding heads of agreement to acquire a 19.9% stake in Australian pharmaceutical company NS Technologies Pty Ltd.
Under the deal, Algae.Tec will also exclusively license NS Technologies’ patented delivery platform technology for use across any medical application developed by Algae.Tec.
Algae.Tec has agreed to pay an initial cash consideration of A$100,000, plus the balance of 25 million ordinary shares and 25 million three-year share options to be issued at a later date.
NS Technologies has developed a unique pharmaceutical delivery system for topical (spray and patch), nasal and sub-lingual applications, which enables medications to be delivered without the use of a syringe, ingesting a pill or potion, or direct inhalation.
The system comprises mini emulsion “droplets” that filter through the epidermal skin layer to enter the subdermal layer of the human body. This slow-release method enables complex molecules of up to 1000 in molecular weight to be absorbed in lower dosages.
The technology was patented after successful clinic trials at the Royal Perth Hospital in 2011 and 2012. The first product as a result of these trials is No Payne, which provides speedy relief for burns, significant abrasions and open wound pain.
The mini emulsion base component requires a selected vegetable oil, and under the signed deal, NS Technologies has agreed to use Algae.Tec’s algae oil as this base component.
Algae.Tec supplies plant derived products to four key markets: medicinal cannabis, algae-based nutraceuticals, animal feed and aquaculture markets, and high quality Algal oil markets.
Algae.Tec executive chairman and managing director Malcolm James said the partnership would provide the company with operations across all phases of the pharmaceutical value chain, from algal oil production through to pharmaceutical delivery.
“This agreement is highly complementary to AEB’s existing algae and medicinal cannabis operations and will provide significant optionality to both of these respective divisions as the partnership with NST evolves,” he said.
James added that the company had number of other “high-growth and complementary” initiatives in the pipeline, which it planned to announce “very soon”.
In December last year, Algae.Tec teamed up with Queensland Bauxite (ASX: QBL) to develop cannabinoid-based products for veterinary medications, supplements and animal therapeutics.
Algae shares were up almost 13% on today’s news by early afternoon trade.