Biotechnology company Living Cell Technologies, which has a specialised piggery in Southland, has signed a research deal with a subsidiary of pharmaceutical giant Johnson and Johnson.
The deal also gives United States-based Centocor Research and Development an exclusive two-year option to take up the worldwide licence for the company's seaweed-derived encapsulation technology to be used specifically for human cells.
It is the same method the company uses for its Southland-bred Auckland Island pig cells, which are in the second phase of clinical trials for the treatment of diabetes.
The only difference is the contents.
Living Cell Technologies chief executive Dr Paul Tan said the agreement was a vote of confidence for the company's methodology and science.
The advantage of seaweed-derived alginate coated capsules was they were not rejected by the body and could be used without imunosuppressive drugs, he said.
"Johnson and Johnson would not allow us to speak publicly about exactly what they wanted the product for, but it is for human cells and not pigs," Dr Tan said.
The deal meant during the next two years, Centocor would pay for all Living Cell Technologies' research using the technology, which was a significant contribution, he said.
Commercial sensitivity meant the figure would not be released.
The companies had been collaborating through research for some time and the agreement was a formal approach to their co-operation, Dr Tan said.
"They have shown a keen interest in our science behind putting living cells into capsules, which could be applicable to other treatments." Centocor did not have any treatment to put on the market yet, it was still in a research phase, he said.
Once the two-year research agreement expired, Centocor had the option to license for two years at a time with an annual fee to be paid. If the option was taken up Living Cell Technologies would be forbidden to use its technology for human cells, Dr Tan said.
But the company would get upfront, annual and royalty payments under a licence agreement.
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