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Dunedin-based biotechnology firm BLIS Technologies has announced a deal with food giant Nestle to develop natural antibiotics to beat middle-ear infections for use in infant formula.
NZX-listed BLIS Technologies will work with Nestle to research and develop probiotics - naturally occurring bacteria with "built in" defences against disease causing bacteria - to protect against upper respiratory tract infections common in infants.
Under the agreement Nestle will fund BLIS research for the development of probiotics suitable to use in infant formula up to the clinical trial phase. Nestle will then take responsibility for clinical studies.
BLIS Technologies chief executive Barry Richardson said the company will not only benefit from research milestone payments, but potential revenue streams from worldwide licensing and ongoing supply of probiotic material.
"It's a deal which has potential in the short term from the point of view of aiding cash flow and so on, but its most significant potential long term is obviously the commercial revenues which is potentially very significant," said Richardson.
He wasn't able to reveal exact figures for cashflow generated by the deal but said up front payments and milestone payments were "all in reasonable six figure numbers" on an annual basis.
"It's a substantial amount of money in the context of BLIS' current operation."
Richardson said initially the project will be managed within existing staffing but they will be looking to bring in further staff in the product development area over the longer term.
"Not only will we be managing this relationship but because of our current developments offshore I anticipate that we'll be managing more than one of these relationships."
BLIS Technologies shares opened this morning at 8 cents and were up 1 cent at 9 cents at 2.26 pm.
