Melbourne, Dec 8, 2008 AEST (ABN Newswire) - Starpharma Holdings Ltd (ASX:SPL)(OTCQX:SPHRY) recently announced the Company's most important commercial milestone to date with the signing of a full license agreement with SSL International for the development of the VivaGel(R)-coated condom. SSL manufactures and markets Durex(R), the world's number one condom.
Starpharma estimates that the deal will deliver the company more than A$100 million in royalties, milestone payments and development support.
The agreement also validates the expanding potential of VivaGel(R) and highlights the international recognition afforded to Starpharma's technology. The announcement generated extensive media interest with coverage in The Australian, The Australian Financial Review, The Sydney Morning Herald and The Age. CEO Jackie Fairley was also interviewed live on Sky Business News and Bloomberg Today.
Condom manufacturers have long understood the commercial potential for premium condoms and innovative products. In addition, the industry and regulators have been seeking a replacement for nonoxynol-9 (N9) which for some years has been used as a spermicidal coating for premium condoms. However, N9 has recently been associated with safety concerns including increasing the risk of infection with HIV and the human papillomavirus, and so alternative coatings are actively being sought.
The potential for VivaGel(R) is well demonstrated by the deal with SSL. The proposition for a unique product with a proprietary spermicidal and virucidal coating is attractive to SSL. The agreement secures for SSL marketing rights to the VivaGel(R)-coated condom in most of the world, including Europe and the USA, while providing Starpharma with a strong partner and significant global coverage.
SSL's CEO Garry Watts in announcing the company's half-year results recently emphasised the importance of innovation and novel products: "Innovation is key to SSL's strategy to keep sales growing and consumers interested." The VivaGel(R)-coated condom represents an exciting opportunity squarely in this innovative product strategy.
Leigh Taylor, Head of Innovation at SSL, added: "VivaGel(R) offers leading-edge technology with the potential to enhance our Durex(R) business."
SSL has approximately 30% of the global market for condom retail sales, estimated to be US$3.2 billion. SSL's dominance in the condom market has been further strengthened by its recent financial performance. The company posted a 23% sales surge in the last six months, largely on the back of its Durex(R) brand. It is worth noting that sales in the condom market are expected to be relatively immune to the current economic downturn.
SSL's recent acquisition of a stake in the owner of Russia's leading condom brand, and its expansion into Eastern Europe and the Middle East are indicative of the company's aggressive growth strategy for its condom business. These developments, building on SSL's already dominant marketing capabilities, are good news for Starpharma and the VivaGel(R)-coated condom.
The co-development program for the VivaGel(R)-coated condom is making excellent progress and the collaboration with SSL is proving to be highly productive. Starpharma is delighted to be working with SSL and in doing so to participate in the company's aggressive growth plans, but also to benefit from SSL's capabilities and marketing strength to rapidly move the VivaGel(R)-coated condom through registration and into the market.
Contact
Dr Jackie Fairley
Chief Executive Officer
TEL: +61-3-8532-2704
Ben Rogers
Company Secretary
TEL: +61-3-8532-2702
ben.rogers@starpharma.com
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