LCT to sell JV shares for $3 million and receive Diabecell licence

New Zealand-based Living Cell Technologies (ASX: LCT) has agreed to sell its 50% shareholding in joint venture company, Diatranz Otsuka Limited (DOL), to the other 50% shareholder, Japan’s Otsuka Pharmaceutical (TYO: 4578) for $3 million, with settlement on January 31, 2018.

The deal gives the Kiwi biotech firm enough funds to keep operating for the next two-and-a-half years, and the news pushed the firm’s shares up 3.57% to A$0.03.

In association with this, LCT and DOL have agreed to sign a memorandum of understanding, upon completion of sale of the shareholding, to exclusively license LCT to use the diabetes treatment Diabecell in Australia, Argentina and New Zealand when it is FDA approved, and to supply product on favorable terms. Diabecell is implanted insulin producing cells into type 1 diabetics without the requirement for immunosuppressive drugs,