China buys into NZ diabetes technology

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A New Zealand company which implants pig tissues in diabetics to help them improve insulin production has sold 5 per cent of its shares to a Chinese investor, and given it an option to control the technology in China.

Nanjing-based Jiangsu Aosaikang Pharmaceutical (ASK) - a private research-based pharmaceutical company established in 2005, with over 60 pharmaceutical products in the market - will take 5 per cent of Living Cell Technologies.

A binding subscription agreement means ASK will buy 14,334,080 Living Cell shares at A12c per share, to raise A$1.72 million ($2.20m) with payment due by March 4. Shareholder approval is not required.

The New Zealand company, which is listed on the ASX, will use proceeds from the investment to fund further development and clinical trials of its lead product Diabecell, now undergoing clinical trials at Auckland's Middlemore Hospital for treatment of type 1 diabetes.

Living Cell said it had also agreed to negotiate a research deal which would give ASK a right of first refusal to negotiate a licence to commercialise the use of Diabecell in China: it would become the sole agency to implant and treat patients there.

ASK chairman Qingcai Chen said his company was excited by the opportunity to bring the New Zealand xenotransplants into China. Type 1 diabetes was a major disease in China, which currently had inadequate treatment options.

"We see Diabecell as a significant step in offering Chinese diabetics real treatment options and improved lifestyles," he said.

- NZPA