SYDNEY — A new company, NSL Health Ltd., will raise A$5 million in a stock market float to commercialize technology and materials used to test for allergies as well as develop peptides discovered in the venom of Australian ants.

By investigating the venom of some of the 89 documented species of the Australian bull ant, NSL scientists have identified three potentially useful peptides — one with some promise in killing tumor cells, the other in lowering blood pressure and the third as a biological insecticide.

With those bioproducts still in the research phase, NSL's initial revenue stream will come from a small, disposable device preloaded with micro-amounts of allergen material, developed by Brian Baldo and his team at the Molecular Immunological Laboratory in the Killing Institute of Medical Research, a part of the Royal North Shore Hospital, in Sydney.

The device — a series of needles each loaded with micro-amounts of material, such as protein extracts from household dust mites or cat and dog hair — is placed on the patient's skin and pressed, so that the needles inject the material into the patient. If the patient is allergic to any of the material injected, a bump like that caused by a bee sting should appear within five to 15 minutes.

In its prospectus, NSL said allergy tests are now carried out by specialists, but its test, which would cost an estimated A$14, can be administered by a general practitioner.

Besides testing for common allergies, the device can be preloaded with material to test for allergic reactions to the various forms of penicillin, anesthetics and other drugs, including antibiotics, sulphonamides and narcotics. Some of the materials for testing allergic reactions have been developed by NSL scientists.

The company estimated the likely Australian market for its allergy product will be 4.5 million tests a year (in a population of around 18 million), and said there are plans to sell the tests overseas.

Baldo told BioWorld International the only commonly used allergy test was for the original form of penicillin, but with the device and the material developed by NSL it would be very easy for an anesthetist to check for allergic reactions.

He said that although the company's initial cash flow would be generated by the device, he has found that investors appear more interested in the research leads generated out of his laboratory's work with the venom of bull ants.

Bull ants are mainly found in the Southern Australian states of Victoria, Tasmania and South Australia, and their stings have caused deaths, though from allergic reactions to the stings rather than direct poisoning.

Baldo said the number of deaths from bull ant stings in Tasmania had proved of sufficient concern for his laboratory, which specializes in allergic reactions, to be asked to examine the problem.

From its investigations into the ant venom, his team isolated and cloned the gene for a cytotoxin peptide called pilosulin 1, which was found to kill cancer cells but was less toxic to normal cells and did not affect red blood cells.

Small quantities of another peptide, called pilosulin 2, have been found to lower the blood pressure of animals and are now being investigated as a lead structure for the development of a new generation of blood pressure-lowering drugs.

The insect toxins are also being examined for bioinsecticides, or for genes that can be incorporated directly into plants to help them defend against insects, he said.

NSL said in its prospectus the company will issue 10 million shares at A50 cents each, representing about 40 percent of the company, with the existing board and management, including Baldo, retaining the other 60 percent. At the issue price of A50 cents a share, the company is valued at A$12.5 million.

NSL is expected to list on the Australian market Feb. 24.

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