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Sirona Biochem moving ahead with ambitious plans after filling its financial coffers

Wed 3:00 pm by Anwar Ali

Earlier this month, the Vancouver-based biotechnology firm announced it had raised nearly $1 million, which brings its total debt and equity financing to $2.4 million so far this year.

With a fresh round of financing at its disposal, Sirona Biochem (CVE: SBM) is poised to follow through with its strategy of pursuing patent opportunities, partners and joint ventures.

Earlier this month, the Vancouver-based biotechnology firm announced it had raised nearly $1 million, which brings its total debt and equity financing to $2.4 million so far this year.

Of the last $975,000 tranche, $375,000 was equity and the remainder was debt. The equity financing consisted of 3.75 million units priced at $0.10 per unit. Each unit is equivalent to one share as well as a warrant to purchase an additional share at $0.15 sometime over the next two years.

Last November, Sirona, which is involved with the development of therapeutics, cosmeceuticals and biological ingredients, decided to simplify its business model. Instead of pursuing the costly, lengthy, and frequently unpredictable route of clinical studies, Sirona says it will stick with patents based on compound development and pre-clinical studies and pass the torch when the time comes to go to trial, get regulatory approval and take products to market.

The company will only pursue drug development with a partner that can supply the technology and assume the bulk of the expenses. This will certainly help minimize research and development spending. As it stands, the company predicts it will burn through $160,000 on a monthly basis.

Sirona has ambitious plans for its laboratory in France’s Cosmetic Valley, an industry cluster where companies like L’Oreal and Chanel conduct their studies. Sirona plans to add 19 new staff members and triple the size of the facility. In December, it approached the French government for expansion approval.

Through its French subsidiary TFChem, Sirona is taking a two-fold approach: developing life-saving drugs and high-performance cosmetics. Research centres on carbohydrates, which have potent and wide-ranging applications, but tend to break down when exposed to enzymes, limiting their usefulness in the body as well as creating some harmful by-products.

The company is striving to stabilize the compound with its proprietary fluorination technique. Sirona chemists have found a way to infuse fluorine atoms into carbohydrate molecules and make their bond more resilient. This unleashes huge potential to not only find different therapeutic and cosmetic uses but also improve the compounds developed by other companies.

In late March, Sirona reached a milestone: its skin lightening compounds successfully passed industry safety standards. According to its market research, 15 per cent of the global population use skin lighteners. In the Asia-Pacific region alone, consumers spent $13 billion on related products.

Sirona is also involved with diabetes research, for which it sees a market worth $41 billion. In a pre-clinical study, Sirona's SGLT inhibitor outperformed Johnson and Johnson’s (NYSE:JNJ) drug, which already has FDA approval. Discussions are now underway with prospective partners, which would take the clinical and commercial reigns.

Sirona, with a market cap of around $7 million, was named to TSX Venture’s Top 50 in 2011.

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