Sydney, Mar 23, 2006 AEST (ABN Newswire) - Life Therapeutics (ASX: LFE) wishes to advise that it will spin out the Gels and Laboratory Gradiflow Divisions as a separately listed public company in line with comments made at the November 2005 AGM.
"The Board has evaluated the overall fit of the Gels and the laboratory Gradiflow businesses with our goal of becoming a Manufacturer of Niche Therapeutics and decided that they are not currently aligned with the goals and aspirations of the company" said Dr Jim Brown, Chairman of the Board of Directors for Life Therapeutics.
"The company considered several options and decided the most valuable return to our shareholders is to spin these divisions into a separately listed company where all current shareholders would receive a pro rata shareholding," Dr Brown added.
"The spinout will also include the Sperm Sorter project, which is progressing well and supported by a Federal Government Grant, and fits with the overall laboratory direction of the spinout."
It is expected that this new company will include the Gels Division, the laboratory scale Gradiflow and the Sperm Sorter application of the Gradiflow technology. Life Therapeutics will retain all of the large scale Gradiflow technology.
"This move has many positive outcomes for Life Therapeutics including the removal of costs pertaining to the maintenance of non-core divisions in relation to our focused strategy and direction", said Dr Hari Nair, Managing Director and CEO of Life Therapeutics.
"Once this spinout is completed, Life Therapeutics will have minimal Australian operations and this will save the company over $700,000 pa. In addition the Gels Division has made significant strides towards achieving profitability over the last 6 months and as a stand alone organization will be able to reach profitability faster and have a more focused approach to attaining a higher global market share," he added.
The potential exists to link the existing gels technology with other international companies to both expand the scope and distribution of this business.
Shareholders will be advised of more details as they become available over the next few months.
Contact
USA
Jesse McCorvey
Vice President
Corporate Communications
TEL: +1 404-300-5030
Australia
Prakash Patel
Company Secretary
TEL: +61 2 8977 9000
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