Health products company Comvita has reached a deal worth up to $4 million with Waikato University for patents and intellectual property rights associated with manuka honey.
Comvita said today it had entered an agreement with WaikatoLink, the commercial arm of the University of Waikato, for new patents connected with the antibacterial and other properties of manuka honey.
The company had also secured exclusive intellectual property rights for future product development related to the processing, extraction and application of manuka honey's active compound for use in the wound care and skin care fields.
Comvita chief executive Brett Hewlett said the technology would allow precise control over the delivery of the therapeutic components in manuka honey, significantly building on the existing proprietary patents Comvita had in the wound care category.
Comvita's current patents covered the application of manuka honey in technically advanced wound dressings.
"These new patents are related to the extraction and isolation of the actual active component, as well as additional wound gel patents," Mr Hewlett said.
Comvita said the purchase price was a minimum of $3.5 million and a maximum of $4m, plus ongoing royalties.
The initial immediate payment was $1.5 m comprising $750,000 cash and $750,000 Comvita shares. A further payment of $1.25m cash or shares, or a combination, at Comvita's discretion was to be made in 12 months time, with another payment of $750,000 cash payable at the two-year anniversary.
To complete the $4m purchase, there were two final payments on reaching certain agreed milestones totalling $500,000 cash or shares at Comvita's discretion.
The final payments were due the latter of two years from now, or when the milestone targets were reached.
WaikatoLink chief executive officer Mark Stuart said the agreement recognised the outstanding world-class research carried out by Professor Peter Molan at the university's Department of Biological Sciences in the School of Science and Engineering.
Comvita's general manager technical Ralf Schlothauer said the technology purchase was exciting and involved some ground-breaking science.
"There have been some amazing clinical results from using UMF (unique manuka factor) manuka honey in wound healing, but prior to Professor Molan's work no one really knew the science that was driving these results.
"The science being undertaken at Waikato University is now working on drilling down to the molecular activity of Manuka honey's unique wound-healing properties to demonstrate how it works," Dr Schlothauer said.
The intellectual property purchase took Comvita to a level that could lead to new fields of science in the application of honey to wounds.