Starpharma Holdings (ASX: SPL; OTCQX: SPHRY) has managed to slash the "cash burn" rate and build revenues from commercialising lead products with partners during the quarter ended, 30 June 2009.
Annual cash burn to 30 June 2009 was $2.9 million, which Starpharma managed to reduce by 52% from the previous year's amount of $6.1 million. Favourable exchange rate movements assisted in the overall cash burn reduction for the year.
A total of $7.0 million was raised via a private placement and share purchase plan.
Operating revenues received from customers included royalty and license income from partners including: Siemens Healthcare and SSL International, together with grant and contract payments from the U.S. National Institutes of Health (NIH) for VivaGel development costs.
CEO Dr Jackie Fairley said: “this is a pleasing result which is due to a significant management effort during the financial year to reduce operating costs, and an ongoing active program to build Starpharma’s partnering revenues.”
“Our cash position was also strengthened by the successful capital raising in which I was delighted to see strong support from both new and existing institutional and retail investors, despite the difficult financial environment."
"The level of participation reflects a growing confidence in the commercial prospects of Starpharma’s portfolio as we continue to build a sustainable and commercially-focussed business.” Fairley said.
Investors may recall that Starpharma recently closed a drug delivery deal with animal health company Elanco (part of Eli Lilly and Company). Presaging a period of increasing commercial momentum for Starpharma.
Starpharma’s lead product is VivaGel, a gel-based formulation of a nano-pharmaceutical under development as a vaginal microbicide to prevent the transmission of sexually transmitted infections, including HIV and genital herpes.
Commercialisation of Starpharma's technology suite is being enhanced, which investors in the recent placement and SPP have recognised.
The recent partnering deal with Elanco, follows the company’s partnering deal last September for a VivaGel coated condom with SSL International, the marketers of Durex.
The coated condom deal, alone, is estimated to be worth in excess of $100 million to Starpharma.
VivaGel was awarded US$20.3 million by the National Institutes of Health (NIH) to progress the development for HIV.
In the Elanco deal, Eli Lilly and Starpharma will collaborate to develop new animal health products with enhanced properties using Starpharma’s dendrimer technology. Under the agreement, Starpharma will receive revenue from research fees, and is eligible for milestone payments and royalties on sale of any product developed.
Strategically, the Elanco deal is the most recent example of Starpharma’s strategy of leveraging its dendrimer technology across multiple business segments. Exploiting the technology across a range of markets to maximum effect.
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