Benitec Ltd. and Sigma-Aldrich Corporation have announced the signing of two major agreements, one in which Sigma acquires an equity stake in Benitec and one in which Benitec grants Sigma a license for the use of Benitec's RNAi technology.
Benitec will receive US $4.5 million from the equity and licensing transactions, and Sigma will obtain an exclusive license to Benitec's intellectual property in the research reagent market.
Sara Cunningham, Chief Executive Officer of Benitec Ltd., stated, “These agreements with Sigma further validate the impact of RNAi on basic and applied life sciences as well as the enormous market potential of the application of RNAi within traditional drug discovery.”
“More importantly, they underscore Benitec's position in the RNAi arena and our strong, proprietary patent portfolio.”
“Sigma is positioned to be a major market force in RNAi reagents and will be able to fully exploit this aspect of our intellectual property, while allowing us to focus our efforts on the development of RNAi as a new class of drugs.”
“Benitec retains all of its existing rights to human therapeutics and diagnostics including the ability to enter into commercialization and drug discovery agreements with pharmaceutical partners.”
“We are delighted that Sigma has chosen to take an equity stake in Benitec, thereby recognizing the value of the Company and participating in the future success of Benitec.”
Shaf Yousaf, President of the Sigma-Aldrich Research Biotechnology business unit, stated, “Following our research collaboration with The RNAi Consortium (TRC); our acquisition of Proligo; and securing licenses to key RNAi intellectual property from MIT, Alnylam, Oxford BioMedica and now Benitec, Sigma-Aldrich has put in place a major intellectual property portfolio in RNAi which positions us well for market leadership in RNAi research reagents.”
“Additionally, the equity stake in Benitec ensures our ability to capitalize on their know-how and proprietary technologies to deliver innovative tools and services to the biopharmaceutical industry.”
Supporting Mr. Yousaf's comments David Smoller, Vice President of R&D and Operations, Sigma-Aldrich Research Biotechnology, stated, “This significant agreement with Benitec not only provides us with access to their intellectual property, but also to technology and know-how that will allow us to accelerate our product development efforts in RNAi and offer unique products and services that will make the Sigma-Aldrich RNAi products Best in Class.”
In return for an exclusive license in the research reagent field, Sigma will make an initial payment of US $2.0 million as well as continuing royalties on product sales and sublicensee revenue.
Sigma also receives a license in the research reagent field to patents co-owned by Benitec and Commonwealth Scientific and Industrial Research Organization (CSIRO) of Australia for its solely owned commercial rights to RNAi in “non-human applications,” including its use in plants, animals, and insects.
The US $2.5 million equity investment will be made in two tranches. Sigma purchased 13,507,118 ordinary shares of Benitec for US $1.7 million.
Following receipt of shareholder approval, which is anticipated, Sigma will purchase an additional 6,024,132 ordinary shares for $0.8 million.
The shares in both tranches will be issued at the US Dollar equivalent of A$0.17 per share. The shares will rank equally with existing Benitec ordinary shares.
Subject to the conditions of the second tranche, Sigma is further granted 10,011,643 options to purchase Benitec stock, exercisable at A$0.32 at any point prior to April 6, 2008.