Carbon nanotechnologies companies merge

Nanotubes and nanoballs. Patents for both are now united in one company.

In a deal that will help solidify its patent portfolio while the nanotech industry gains momentum, Carbon Nanotechnologies Inc. announced on Wednesday that it will merge with C Sixty.

CNI is one of the leading proponents of carbon nanotubes, thin strands of pure carbon that can be used to strengthen plastics or create semiconductors. By contrast, C Sixty specializes in fullerene carbon, tiny soccer ball-like molecules consisting of 60 carbon atoms that researchers and analysts say could become important in the pharmaceutical industry.

Financial terms of the merger were not disclosed.

"For composite materials or electrical applications, fullerenes aren't particularly interesting, but what fullerenes do is mop up free radicals," said Matthew Nordan, an analyst at Lux Research. Some researchers have suggested that the presence of free radicals in the body may be linked to the development of cancer and other types of cell damage.

C Sixty has been working on a low-key project with Merck on drug development. Rival Mitsubishi, meanwhile, has been working on ways to use nanoparticles in over-the-counter products.

With this deal, the resulting company, potentially, will have a number of patents for exploiting carbon in nanotechnology products. IBM and NEC own the basic patents to the nanotube, but CNI has about 30 patents that revolve around ways to attach different particles to nanotubes, according to Tom Pitstick, vice president of business development at CNI. Since nearly every potential nanotube product will involve attaching the tube to another particle, CNI will likely be in a position to license its patents, Pitstick said.

C Sixty has asserted that its patent portfolio is fairly broad and likely allows it to obtain royalties from a wide variety of manufacturers in the future.

"C Sixty's position has been, if you want to use fullerenes in pharma, you have to go through us," Nordan said.

Although governments around the world have been pumping money into nanotechnology research, commercialization continues to progress slowly and cautiously. Last year, CNI said it planned to ramp up manufacturing capability so that it could make 1,000 pounds of nanotubes a day in 2005. That has been scaled back to 100 pounds a day, Pitstick said.

So far, nanotubes have mostly been used to strengthen bike parts and create plastic that can conduct electricity.

The two companies aren't strangers. Both are located in Texas and derive, in part, from research conducted at Rice University. CNI's founder, Richard Smalley, is a scientific advisor to C Sixty. Meanwhile, CNI's chief executive, Bob Gower, is C Sixty's chairman.

Technically, the deal is a merger, but because CNI is larger, it will function more like an acquisition, Nordan said.

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