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Major University of Otago Bio-Tech discovery

News Release September 1, 2000


Major University of Otago Bio-Tech discovery

University of Otago scientists have discovered an anti-bacterial protein called Salivaricin B, which can prevent or control streptococcal throat infections, thus preventing serious complications including rheumatic fever and rheumatic heart disease.

International patent applications have been filed for the discovery.

The anti-bacterial protein is produced by a micro-organism called Streptococcus salivarius, which occurs naturally in the mouth saliva of some people, thus giving them a natural immunity. It was discovered following many years research by a University of research team, lead by microbiologist, Associate Professor John Tagg.

Salivaricin B produced by the Streptococcus salivarius micro-organism is technically known as a BLIS, which stands for ‘bacteriocin-like inhibitory substances’. The discovery of Salivaricin B is a major advance in the global battle against increasing anti-biotic resistance.

A new company BLIS Technologies Ltd has been formed by Dunedin company Otago Trust Limited and a group investors, including Southern Capital Limited and international participants, to pursue the commercial development of the discovery.

University of Otago Director of Commercial Development Mr John Scandrett, announcing the discovery today said that the University had concluded an agreement with BLIS Technologies Ltd to transfer the technology and patent rights to that company.

Under the agreement the University has agreed to sell 50 per cent of its rights in the technology and has granted BLIS a world-wide exclusive licence to the University’s remaining 50 per cent interest in the technology. The University will receive a substantial payment and a share of the future royalties.

BLIS Technologies Limited also has the right to acquire a first right of refusal to other BLIS producing organisms discovered at the University over the next ten years.

Negotiations are currently under way with a number of organisations including multi-national companies for the commercialisation of the discovery.

University Vice Chancellor Dr Graeme Fogelberg said today the discovery and commercial potential was an exciting development, “Professor Tagg and his team and believe this discovery has huge worldwide potential.”

The company’s representatives agree and say that the discovery is potentially one of the most important health discoveries by NZ Universities in decades, which creates major world-wide health benefits and commercial opportunities. The potential financial return is enormous, which will obviously be good for us, and will showcase the University and Dunedin as a centre of leading bio-tech research and development.

“It is a direct reflection on the quality of Otago’s bio-technology research and development programme”.


ENDS

Please Note: Scientific and commercial background information attached

Issued on behalf of BLIS Technologies Ltd by Shandwick International.

For further information contact:
Mr John Scandrett,
University of Otago Consulting Group.
(03)479 8471
(025)323 553
Dr Graeme Fogelberg
Vice Chancellor, University of Otago.
(03)479 8253


OR

Klaus Sorensen
Shandwick International
(04) 4724 190
(025) 322 576.

BLIS TECHNOLOGIES LIMITED

BACKGROUND INFORMATION

THE COMPANY

BLIS Technologies Limited has been formed to pursue the commercialisation of a naturally occurring micro-organism called Streptococcus salivarius which produces an anti-bacterial protein named Salivaricin B. These desirable organisms occur naturally in the mouth and throat of some people.

Salivaricin B is a BLIS, hence the company’s name, BLIS Technologies Limited. “BLIS” stands for “bacteriocin-like inhibitory substances”. These are naturally occurring bacterial peptides or proteins that are able to kill or control the growth of certain other closely-related but undesirable bacteria. Sometimes BLIS are referred to as Lantibiotics.

“Lantibiotic” is a term derived from “lanthionine-containing anti-biotics”. There is a more detailed, scientific explanation of the term on page 5 of the patent application. For further explanation on lantibiotics, go to this web site:
http://www.bms.ed.ac.uk/medics/year2/group11/Lantibiotics.htm.

The best known BLIS in common use today is Nisin, which is extensively used in the food industry (for example, in cheese manufacture) as a natural anti-bacterial agent.

Following many years’ research by University of Otago microbiologist Associate Professor John Tagg, assisted by Karen Dierksen and others, it has been discovered that Salivaricin B helps control undesirable streptococcal infections caused by Streptococcus pyogenes. Streptococcus pyogenes infections cause ailments including throat infections, dental decay, scarlet fever, rheumatic fever and acute glomerulonephritis.

In order to reduce the incidence of Streptococcus pyogenes infections, it is desirable to control or prevent the growth of the harmful bacteria. Associate Professor Tagg and his University of Otago associates have discovered that Salivaricin B is able to prevent or control the growth of Streptococcus pyogenes bacteria, thereby preventing or controlling the onset of ailments including throat infections, dental decay, scarlet fever, rheumatic fever and acute glomerulonephritis.

The discovery that Streptococcus salivarius micro-organisms producing Salivaricin B can be used to prevent or control Streptococcus pyogenes infections has significant health implications which give rise to commercial opportunities which this Company has been formed to pursue.


THE PATENT APPLICATION

A patent application protects the intellectual property rights in Salivaricin B. The patent application covers:

 a micro-organism which expresses Salivaricin B (preferably selected from Streptococcus Salivarius strains K12 and K30);
 a therapeutic formulation comprising a micro-organism capable of expressing Salivaricin B, either alone or in combination with a secondary lantibiotic (preferably Salivaricin A2);
 providing methods of treating an individual to at least inhibit growth of harmful streptococcal bacteria in the upper respiratory tract by administering an effective amount of Salivaricin B orally, preferably as part of a therapeutic composition;
 a therapeutic formulation in the form of foodstuffs, most preferably in the form of dairy product-based foodstuffs;
 achieving that inhibitory effect by colonising at least part of the upper respiratory tract of an individual with a viable micro-organism which expresses Salivaricin B, preferably administered as part of a foodstuff;
 a therapeutic formulation comprising Salivaricin B, or a functionally equivalent fragment or variant thereof, in combination with a diluent, carrier and/or excipient;
 a preliminary step of pre-treating an individual to at least reduce the bacterial population present in the upper respiratory tract, preferably by administering an anti-biotic (preferably Erythromycin) orally to the individual; or
 treating streptococcal infections of the upper respiratory tract by first orally administering an amount of anti-biotic effective to reduce the numbers of harmful streptococci present and then administering, to the resulting bacterially depopulated environment, BLIS producing Streptococcus Salivarius organisms to repopulate that environment.

In summary, it is anticipated that there will be a variety of methods by which Salivaricin B can be viably used to help control Streptococcus pyogenes infections.


PURCHASE AND LICENCE OF INTELLECTUAL PROPERTY RIGHTS BY BLIS TECHNOLOGIES LIMITED FROM THE UNIVERSITY OF OTAGO

By heads of agreement dated 10 August 2000, the University of Otago has:

a. agreed to sell 50% of its rights in the technology described in NZ Patent Application 500261 to BLIS Technologies Limited for the sum of NZ$2,000,000 plus GST; and

b. granted BLIS Technologies Limited a world-wide exclusive licence to the University’s remaining 50% interest in the technology. The licensing agreement contemplates that BLIS Technologies Limited may either develop the technology itself or “on-licence” the technology to unrelated third parties. The University of Otago will receive 15% of the total on-licensing fees, royalties or other revenue.


THE SCIENTIST AND HIS WORK

Associate Professor John Tagg BSc, MSc, PhD

Finding the ways of controlling common diseases caused by streptococcal infection, particularly rheumatic fever, has been Dr. John Tagg’s passion throughout a long and distinguished career that has spanned more than 30 years. He is an Associate Professor of Microbiology at the University of Otago, the author of an astounding number of scientific publications and a world leader in the field of lantibiotics and BLIS-producing bacteria. The invention covered by the patent application is one end-product of that passion which has major potential significance for world health. A summary of Dr. Tagg’s curriculum vitae is set out below.

“Strep throat” in a world-wide context

Streptococci pyogenes are the streptococci species that most commonly cause “strep throat” infections in children. These infections if not treated can lead to the development of rheumatic fever and acute glomerulonephritis. Rheumatic fever is a potential killer if the heart becomes involved. In New Zealand we have a particularly high incidence of rheumatic fever in Maori and Pacific Island populations.

In the USA it has been estimated there are 4-5 million episodes of strep throat infection annually in children. The cost in treating these infections (doctors and parents time, antibiotic costs) and the complications of treatment (antibiotic resistance and hypersensitivity development) are enormous.

Strep infections occur world-wide and because of limited medical care in many South American, African and Asian countries many thousands of children die each year due to rheumatic carditis.

In India there are estimated to be 20-30 million cases of strep throat annually.

According to World Health Organisation 1996 figures, it was estimated that, in each year:

 12 million people (mostly children and young adults) are affected globally by rheumatic fever/rheumatic heart disease
 more than 2 million require repeated hospitalisation
 1 million require heart surgery
 500,000 deaths occur from this cause.

Streptococcus salivarius

Dr. Tagg summarises the significance of the particular variant of streptococcus bacterium, Streptococcus salivarius, as follows:

The strains of Streptococcus salivarius called K12 and K30 produce both salivaricin A and salivaricin B. These S. salivarius strains kill all tested isolates of the species Streptococcus pyogenes – the streptococci that most commonly cause most “strep throat” infections in children.

Thus Dr. Tagg’s clinical tests have established that Streptococcus salivarius strains K12 and K30 kill Streptococcus pyogenes.

Dental caries

Dr Tagg has also identified potential use of the invention in helping control tooth decay. He comments:

In addition to its action on the bacteria causing sore throats, strain K12 also inhibits strains of Streptococcus sobrinus, which is the second most commonly implicated species in the development of dental caries (tooth decay) in humans.

Dental caries is an even more prevalent disease world-wide than rheumatic fever and is one of the most costly to treat. The strains that we are using could not be expected to have the same impact on tooth decay as that against strep throat. However some reduction in plaque accumulation and in the presence of some of the bacteria that can cause tooth decay can reasonably be anticipated.

The potential commercial advantages of Salivaricin B-based therapies

The major potential advantages of therapeutic substances containing Salivaricin B are as follows:

1. They occur naturally and are not genetically modified or genetically engineered.

2. They adopt a natural (ecologically sound) “clean, green” type approach to the prevention of disease, with minimal disturbance of our normal bacterial populations;

3. They represent a simple and relatively inexpensive approach to disease control when compared with immunisation or antibiotic dosing;

4. There is increasing interest in BLIS, such as Salivaricin B, because of the decreasing effectiveness of antibiotics as a result of the growth of antibiotic-resistant bacteria;

5. Their planned uses are modelled on the already-accepted yoghurt model of recolonising the intestine with helpful lactobacillus bacterial following the taking of a course of antibiotics;

6. Their potential development in the form of a product as a freeze-dried powder blended with milk powder would give added value to the milk powder and provide a stable form that can be provided for and accepted by children all over the world (subject to obtaining all necessary regulatory approvals).

Clinical trials and testing to date

The following is a summary of some of the clinical trials already undertaken by the University:

Trials indicating that children having lantibiotic producing S. salivarius were relatively protected against S. pyogenes infection included documentation over a 10-month period of strep throats occurring in children who were naturally harbouring populations of lantibiotic-producing salivarius (most were producers of only salivaricin A) compared with children apparently lacking these lantibiotic producers in their mouth.

Further research was prompted when it was found that a higher proportion of children who did not have detectable lantibiotic producing salivarius experienced strep throat during the study period than those children who had detectable native populations of lantibiotic-producing salivarius.

Almost all of the test group had salivarius strains producing only salivaricin A (which controls the growth of, but does not generally kill S. pyogenes). The clinical studies into the antibiotic effects of salivaricin B indicate that greater protection could be anticipated from salivarius strains producing BOTH salivaricin A and salivaricin B. It just so happens that strains such as K12 which produce both activities are quite rare.

Colonisation studies using streptomycin marked salivarius have been conducted over more than 5 years and have achieved significant levels of uptake of the salivaricin producing organism.

Investigations have also been carried out on the application of colonisation when linked to completion by the children of a course of antibiotics.


THE COMMERCIAL POTENTIAL

Once the most desirable formulations incorporating Salivaricin B have been identified, the Company will investigate which products to develop for commercial application. Two broad categories of commercial application have been identified:

Use in Medicines or Nutriceuticals

It is anticipated that medicines or nutriceuticals (naturally occurring substances with pharmacological properties) can be developed containing high concentrations of Salivaricin B-based substances for repopulating the upper respiratory tract with desirable bacteria after a course of antibiotics, or for preventative establishment of strong populations of desirable bacteria.

Thus any person who has taken a course of antibiotics (which will have killed natural populations of the desirable Salivaricin B) could benefit from taking a medicine or nutricuetical to reintroduce Salivaricin B. This is a very sizeable and lucrative potential market.

Foodstuffs

A lower strength Salivaricin B-based product could be used to maintain or top up a person’s naturally occurring Salivaricin B levels, in a similar way to the way acidipholus and bifidus are incorporated into yoghurt products. Strong possibilities that have already been identified include:

 powdered drinks
 chewing gum
 lozenges
 dairy products.

It is considered that natural, non-genetically modified products of this nature will be attractive to consumers.

NEW ZEALAND STOCK EXCHANGE (SECOND BOARD) LISTING

The directors intend that the shares of the Company will be listed on the New Zealand Stock Exchange “second board” as soon as is reasonably practicable following completion of the issue. The directors give no assurance as to the timing of listing or as to the level of any trading interest there may be in the shares following listing. As it is intended to list the shares, the Company's constitution does not contain pre-emptive rights on transfer.

DIRECTORS

The Directors of the Company are:

 Howard James Paterson
 Dr Maxwell Gilbert Shepherd PhD

ASSOCIATE PROFESSOR JOHN R TAGG - A SUMMARISED CURRICULUM VITAE

Academic Qualifications

BSc (Melb) 1967
MSc (Melb) 1969
PhD (Monash) 1972

Advancement of Knowledge and Professional Practice

Associate Professor Tagg has been regularly invited to chair sessions and to present the findings of his group at national and international conferences in the fields of streptococcal and bacteriocin research. High and sustained research productivity has occurred over 25 years with more than 115 publications and reviews in peer-reviewed journals.

Dr. Tagg’s recognised expertise is reflected in his consistent success in obtaining research funding from sources that are local (ORG, Research Society and Otago Community Trust), national (HRC, National Heart Foundation, NZ Dental Research Foundation and Marsden Fund) and international (Thrasher Fund). In the period 1996-1999 the amount of funds raised from research grants was in excess of $1.5 million.

He has been a regular member of the Health Research Council Biomedical Assessing Committee and has frequently reviewed contributions to microbiological journals, especially Applied and Environmental Microbiology of which he is a member of the Editorial Board.

Dr. Tagg has been a Committee member, Treasurer, Vice-president and President of the New Zealand Microbiological Society during the period 1990 – 1997 and is Chair of the Organising Committee of the 1995 NZMS Annual Meeting to be held in Dunedin (27-30 August 2000).

He was Vice Chairman of the Organising Committee for the XIV Lancefield International Symposium on Streptococci and Streptococcal Diseases held in Auckland, October 11-15, 1999.

Service to the University and the Community

Dr. Tagg has been a major contributor (committee member and project leader) to the University of Otago's Hands-on Science Summer School since its inception 9 years ago and for the past three years has been the convenor of the Summer School. He was a member of the Finance and Administration Committee and of the Working Committee of the Ist International Science Festival held in Dunedin in July 1998 and Co-ordinator of the Science Festival Feature Session "Getting High on Biology at Otago", as well as a member of the Executive Committee for the 2nd International Science Festival held in July 2000.

Dr Tagg is recognised by peers and by the general student population as a highly-effective and innovative teacher. Dr. Tagg’s supervision of research students at all levels has been extensive. These have included 12 PhD, 14 MSc and 25 BScHon students. Others supervised have included an MDS and a BMedSci student plus 21 Summer Students and 5 Dental Elective Students. Others under Dr. Tagg’s direct supervision include post-doctoral students, Junior Research Fellows, Research and Technical Assistants and part-time Research Nurses.


ENDS

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