Peplin has developed a gel from the radium weed sap, a common folk remedy for cancer.
It says the gel can remove sun spots, which can develop into invasive skin cancers if left untreated.
Peplin's general manager Peter Welburn said human trials had shown the gel effectively treats sun spots and lesions in two days.
The 125 patients involved in the trial applied the gel once a day for two days.
Dr Welburn said it successively removed every sun spot on 27 per cent of patients, with 44 per cent having partial success.
"This is the first product that has demonstrated benefit in treating sun spots on the face, neck and difficult areas to treat like the arms and back of hands," Dr Welburn said.
He said the gel had no major side effects apart from temporary redness and flaking skin.
The gel does not treat melanomas.
Peplin founder Dr Jim Aylward said it all started when his job was on the line at the CSIRO more than 10 years ago.
"I needed to pull out a trump card and I relied on some folk lore," Dr Aylward said.
"My mother knew radium weed had some great effects on skin cancer.
"I said one day when I lose my job I will find the active (ingredient), and that's what I did."
He founded Peplin, dedicated to researching the benefits of the weed, in 1998.
Up to 60 per cent of Australians have at least one sun spot compared with 25 per cent of people in the northern hemisphere.
The gel is expected to be on the market in the United States by 2011 and in Australia soon after.
Source: AAP NewsWire