Cyclopharm Limited (ASX:CYC) Managing Director and CEO, James McBrayer talks about the company's joint venture to expand Positron Emission Tomography (PET) diagnostics business opportunities for NSW and Australia.
Rachael Jones: Hello. I'm Rachael Jones for the Finance News Network. Joining me today from Cyclopharm (ASX:CYC) is CEO and Managing Director James McBrayer. James, welcome back to the network.
James McBrayer: Thanks, Rachael.
Rachael Jones: Now, first of all, James, for people unfamiliar with Cyclopharm, could you just give us a brief introduction?
James McBrayer: Cyclopharm is an Australian nuclear medicine company. We are operating in about 57 countries around the world. We're best known for our proprietary product, Technegas. Technegas is a functional lung imaging agent used primarily to diagnose pulmonary embolism or blood clots in the lung. Most recently, we've been expanding the indications through our research and development activities towards more chronic applications like COPD (chronic obstructive pulmonary disease) and asthma.
Rachael Jones: And James, you've made several announcements over the past few weeks. What can you tell me about those transactions?
James McBrayer: We've announced that we're exiting our diagnostic imaging joint venture at Macquarie University Hospital. We've completed a transaction forming a business venture collaboration, again at Macquarie University Hospital, with our cyclotron facility. We announced that we've entered into a distribution agreement with DraxImage, a North American radiopharmaceutical manufacturer, to utilise our infrastructure in Europe, where we will distribute a product called RUBY-FILL in 14 European countries. And we've just recently made a placement.
Rachael Jones: And you first announced the intention to form a JV with the cyclotron facility back in September 2017. How is that going?
James McBrayer: Well, Rachael, it was a long time in coming, surely. The joint venture that's formed, it's called Cyclotek NSW. It's a joint venture with an ANSTO wholly-owned division, Pettech. It's our Cyclopet, which is our cyclotron facility at Macquarie University and Cyclotek down in Melbourne. Together, the venture will combine the assets here in New South Wales to provide patients and clinicians access to new and innovative molecular imaging products.
Rachael Jones: And how is Macquarie University supporting the cyclotron JV?
James McBrayer: From a substantive point of view, they've been very accommodating as landlords. From a research and development point of view, their researchers will have access to state-of-the-art technology that they've not had access to before. And from the hospital's point of view, clinicians and patients more broadly will have, again, access to some new and innovative technology and products.
Rachael Jones: And now let's talk about financials. What can you tell me about the institutional share placement?
James McBrayer: Well, on Friday, we announced that Karst Peak Capital, we were able to place 8.5 million to them at a premium of 11.7 per cent above our share trading on that day. We're very excited to have Karst Peak on our register. They're best known for their interest in technology stocks in medtech and biotech. With that placement, Karst Peak now owns 10.9 per cent of Cyclopharm. That placement, along with the $3 million ATO R&D refund that we received a couple of weeks ago, places us extremely well in being able to execute some of our growth strategies.
Rachael Jones: So just on that, what other growth opportunities does Cyclopharm have and how do you plan to execute those?
James McBrayer: We always talk about our growth in four key strategies. The first, of course, and the most near-term, is to gain USFDA approval. We expect that to happen in 2020. The milestone that our shareholders can expect is the filing of our USFDA new drug application, which will gain us access to the world's largest healthcare market.
The other aspect is to expand the applications of our proprietary product, Technegas, beyond pulmonary embolism, and we're delivering that in some of the research and development activities that we've been involved with over the last several years. Some of those are going to start to come to fruition with some of the publications in early 2020.
We're focused again on our third strategy about expanding additional technologies and making that available to our customers. Ultralute is an example of that.
And then the fourth example of developing on our growth strategies is leveraging our expertise. A tangible example of that is this collaboration that we're doing with Jubilant DraxImage and distributing their product in Europe.
Rachael Jones: And to the last question now, James, what can investors expect in terms of news flow for next year?
James McBrayer: 2020 is going to be an exceptional year for Cyclopharm. The first milestone people can expect is the lodgment of our USFDA new drug application. We'll start to commercialise these partnerships that we've been leveraging -- through Jubilant DraxImage, for example. And we'll start to see some publications that will allow us to accelerate what our drive is towards expanding the application of Technegas beyond pulmonary embolism, with some of the first clinical trial papers being published.
Rachael Jones: James McBrayer, thanks for the update.
James McBrayer: Thanks, Rachael.