ferrets stock to watch: biosignal limited

Ferrets Stock to Watch BIOSIGNAL LIMITED
09:24, Thursday, 29 June 2006

A BIOTECH EXUDING A LOT OF VISION IN BACTERIAL FIELD

Sydney - Thursday - June 29: (RWE Aust Business News)
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OVERVIEW
********

Biosignal Ltd (ASX:BOS) has its own vision ... to become a world
leading company in the antimicrobial field by providing permanent,
effective and safe solutions by removing and preventing bacterial
contamination on all types of surfaces, including biological surfaces.

This has led to yesterday's development in which Biosignal
reported to the ASX that it was conducting the first human human trials
of the company's new contact lens.

Biosignal and the Institute for Eye Research (IER) have received
ethics approval for an initial overnight human trial of their
anti-bacterial, extended-wear contact lens.

Existing extended-wear lenses are designed to be worn
continuously for one month but clinical data suggests that wearers are
five times more likely to develop an infection from this type of wear.

A lens able to minimise such infections would significantly
increase convenience and comfort for contact lens wearers and is sought
by all of the major lens manufacturers.

The IER has lodged a clinical trial notification with the
Australian Therapeutic Goods Administration for the study, which is
scheduled to begin today.

The aim of the study is to compare the safety performance of
the anti-bacterial contact lens developed jointly by Biosignal and
the IER with standard contact lens.

The comparison will involve evaluation of ocular health, lens
performance on-eye and subjective responses when the lenses are worn
for one night.

The trial will involve 10 patients and be conducted at the
clinical facilities of the IER at the University of New South Wales
under the guidance of Professor Mark Willcox.

Results are expected in early July.

It follows a successful two-week study in guinea pigs that
demonstrated the anti-bacterial lenses were well-tolerated during
overnight wear.

Earlier this month Japanese Restoration Group and Biosignal
signed a memorandum of understanding and share subscription agreement
regarding a commercial collaboration and an investment of up to $1.6
million by Restoration into Biosignal.

The investment will be made at a share price of 15c per share
in two tranches, the first up to $450,000 to subscribe for shares in any
shortfall from Biosignal's current rights issue and the remainder as a
placement.

Biosignal has agreed to grant a board position to Restoration on
completion of the investment.

The head of Tokyo-based Restoration group is leading Japanese
businessman Yasuhiro Sakakibara.

JP Morgan in New York and London has advised Mr Sakakibara on
the investment into Biosignal and the memorandum of understanding.

The Restoration group has identified the field of biomimicry as
a key investment target.

Biomimicry is a branch of science that studies nature's models
and then imitates or takes inspiration from these designs and processes
to solve human problems.

Biosignal, whose technology is based on models from marine
organisms, is a classic case of biomimicry and is one of Restoration
Group's first investments in this field. Restoration expects to make a
dozen additional investments over the next few years.

The investment by Restoration is not aimed specifically at
activities in Japan but is designed to drive Biosignal's global business
success.

However, the initial focus will be on opportunities in Japan.
Restoration expects to provide further resources, in addition to the
equity investment, to promote the development and launch of products
based on Biosignal's technology in Japan.

Biosignal and Restoration will initially focus Japanese
activities on a suite of industrial products aimed at biofilm prevention
and removal in different product applications in the housing and
construction sector.

Biosignal and Restoration have also agreed to assess
manufacturing of Biosignal's compounds in Japan.

Michael Oredsson, managing director of Biosignal, said he
welcomed Restoration Group as its first international institutional
investor and looked forward to working with this highly respected
business group with strong links to Japanese industry and government.

Mr Sakakibara, Restoration Group's chairman and founder,
recognised Biosignal has a unique opportunity to succeed globally.

SHARE PRICE MOVEMENTS
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Shares of Biosignal yesterday drifted down 0.5c to 16.5c.
Rolling high for the year has been 25.96c and low $13.72. The company
has 68.7 million shares on issue with a market cap of $11.6 million.

Meanwhile in May Biosignal and technology venture company Q-Stat
Pty Ltd received funding and technical support from Santos Ltd to
develop a product that counters corrosion of oil and gas pipelines and
equipment.

Biosignal announced that BHP Billiton had also contributed
funding and resources to test the effectiveness of Biosignal's
anti-biofilm compounds in halting bacterial corrosion of metals.

Santos, one of Australia's leading oil and gas exploration and
production companies, agreed to provide funding, field data and
technical
advice.

Biosignal will first conduct bench scale trials of compounds
against organisms known to cause corrosion problems and replicate oil
and gas pipeline conditions.

Biosignal's compounds will be used alone and in combination with
biocides already used in the industry.

If this work is successful, a field study will be conducted at
an operating oil facility.

The bench scale trials are expected to be completed at the
beginning of the fourth quarter this year. Intellectual property arising
from the work will be owned by Biosignal.

"Microbiologically-Induced (Bacterial) Corrosion (MIC) of
pipelines and consequent leaks in particular poses an environmental risk
to the oil and gas industry as a whole," said Harry Moss of Santos.

"We support this project and are keen that effective tools are
developed to assist Santos in managing the risk of such leaks to as low
as is reasonably practicable."

Mr Oredsson said microbiologically induced corrosion (MIC) was a
global problem and he was pleased to be working with multi-billion
dollar
companies to develop this product.

MIC occurs throughout oil and gas fields, at wellheads, in the
gathering system, on oilrigs, on the internal and external surfaces of
pipelines, storage tanks and refining facilities.

MIC is often responsible for leaks and blowouts.

Corrosion of steel infrastructure is estimated to cost the
Australian oil & gas industry around $675 million per annum in direct
and deferred costs, based on corresponding US industry figures.

BACKGROUND
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Biosignal was established in 1999 with the aim of
commercialising
a unique anti-biofilm technology developed at the
University of NSW in Sydney.

The company listed on the Australian stock exchange in April
2004 and is now focused on commercialising an initial range of products,
primarily in the medical field.

Biosignal's primary technology founders, Professors Staffan
Kjelleberg and Peter Steinberg, began their research in this area in the
early 1990's and in 1994 observed that the Australian seaweed Delicia
Pulchra was rarely covered in biofilms (bacterial colonies).

They established that the seaweed uses natural chemicals,
furanones, to keep it free of biofilms.

The furanones jam cell-to-cell signalling systems that are
pivotal to the ability of bacteria to form and maintain biofilms.

Professors Kjelleberg and Steinberg and a team of researchers at
the Centre for Marine Biofouling and Bioinnovation at UNSW then embarked
on a strategy to produce protective coatings that incorporate furanone
compounds for a range of commercial applications.

A compound library of synthetic analogues was developed by a
team of chemists under Dr Naresh Kumar.

The synthetic compound development was aimed at improving the
properties of the natural compounds and to make them suitable for
medical and industrial markets.

ENDS