SYDNEY - A research subsidiary of Australia's only listed pharmaceutical company, F.H. Faulding & Co. Ltd., has signed an option agreement for a drug delivery system to be tested by Swiss giant Novartis AG.

For an undisclosed amount, the option agreement involves a multipolymer liquid gel made in the form of a cream and rubbed onto the skin. The gel is to be combined with an existing product from Novartis, of Basel, Switzerland.

Ross Macdonald, managing director of Faulding's research subsidiary, Soltec Research Pty. Ltd., in Melbourne, said he could not reveal the product Novartis intends to combine with Soltec's Liquidpatch.

But the agreement initially is for 12 months, so Novartis can decide whether the Liquidpatch product, which does not remain visible on the skin after application, can be used with its drug.

Few details are available about the composition of Liquidpatch. Macdonald said the technology is “simple“ and alcohol based. Other information produced by the company mentions the use of lipids.

Adelaide-based Faulding's share price dipped by A$0.07 to A$7.25 when news of the Novartis agreement was disclosed late last week. By the end of the week its share price had recovered to A$7.50. - Mark Lawson