Arrowhead Research Corp. on Tuesday said that it sold its electronics business to a South Korean company, enabling it to better concentrate on its medical businesses.
The Pasadena nanotechnology holding company said that publicly-traded Wisepower Co. Ltd. of Seoul is paying stock and convertible bonds valued at $5 million for Arrowhead’s Unidym Inc. subsidiary, which makes carbon nanotubes comprised of extremely small fibers that create lighter and stronger materials. The company and other Unidym minority shareholders will earn additional payments of up to $140 million based on cumulative sales and licensing milestones, plus 40 percent of licensing revenue from certain patents.
Arrowhead said that selling the non-core company will decrease its burn rate, and enable it to focus exclusively on nanomedicine while still benefitting from Unidym’s growth under Wisepower, which is focused on the electronics business. Wisepower makes Li-polymer batteries for cellular phone manufacturers in Asia.
Arrowhead has two majority owned subsidiaries, Calando Pharmaceuticals, which is developing drugs based genetics technology, and Ablaris Therapeutics, an anti-obesity drug developer. It also has minority investments in two private nanobiotech companies. Arrowhead on Tuesday also announced that it invested an additional $1 million in Calando and converted about $8 million of debt into equity, so that it now owns 79 percent of the company.
“We now have a far simpler and more cohesive story to articulate to analysts and institutional investors, and I am confident that our value proposition will fit more neatly into investors’ established frameworks,” said Chief Executive Christopher Anzalone in a statement.
Shares were up 4 cents, or 3.8 percent, to 96 cents in midday trading on the Nasdaq.
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