KANE Biotech Inc. has struck a deal with an undisclosed global company that could lead to a licensing agreement for the Winnipeg company's antibiofilm technology for use in the animal-health market.
"This is very big news for us," said Gord Froehlich, CEO of Kane Biotech. "We're very excited."
Last year, the small firm launched its own commercial version of a pet oral-care product called StrixNB containing Kane's patented technology that breaks down biofilms to allow antibiotics to kill the bacteria that create tooth and gum decay and bad breath.
Biofilms are matrix-embedded microbial populations that render conventional antibiotics non-effective.
Kane's branded drinking-water additive is distributed through veterinary offices primarily in Manitoba.
Froehlich said his company does not have the resources to mount a significant campaign in the retail market. That's where a strategic relationship, such as the one announced Tuesday, comes in.
"We are a research-and-development company with seven employees," Froehlich said. "The intention has always been to license the technology to other companies that have the resources to properly enter the market."
Under the agreement, the health-care company -- which Froehlich said is well-known -- will conduct its own due diligence surrounding Kane's technology. Part of the deal is an option to obtain an exclusive, worldwide licence to develop, commercialize and market certain oral-care and wound-care technologies in the animal-health market.
Froehlich said there's no schedule to the option agreement. It means this company has now tied up the technology, making it unavailable to other potential licensees.
The agreement does not affect Kane's marketing of its own StrixNB product or the company's ongoing development of its antibiofilm technology for wound care.
Kane has a contract with the United States Army Dental and Trauma Research Detachment to develop an antibiofilm-antimicrobial gel formula for wounds.
Kane will develop the wound gel using a version of the antibiofilm, called DispersinB, in combination with an antibiotic peptide the U.S. army developed itself.
In the past, Kane has done extensive with the U.S. army's Walter Reed Army Institute of Research on the wound-care technology.
The need for a strategic partner to license the technology has a lot to do with the challenges facing a small company such as Kane in accessing enough capital to continue research and development.
Recently, the company extended the terms of a share purchase warrant issued a year ago. Originally, the warrants were to expire Dec. 14, 2013, but have been extended to Jan. 31, 2014. The warrants allow the unit-holder to buy one share per unit at 15 cents.
Shares closed up a half cent to eight cents Tuesday.
Kane has also arranged for a $500,000 convertible debenture financing with its board chairman, Philip Renaud, a British investment industry executive.