Researchers from the Scripps Institution of Oceanography in US found the seaweed is packed with tiny photosynthetic organisms called "cyanobacterium" which produce compounds that have shown promise in combating bacterial infections.
It could also be used in future medicines to treat other chronic diseases from arthritis to cancer to heart trouble, the researchers said.
The researchers, who first found the organism in 2008 off the Kona coast of Hawaii, took samples in 2009 as they were overgrowing and smothering the corals underneath by releasing a chemical that was causing the corals to bleach.
Tests on the chemical revealed some surprising results -- the seaweed was generating natural products called honaucins, which had potent anti-inflammation and bacteria-controlling properties, the Daily Mail reported.
"In different arenas these compounds could be helpful, such as treating chronic inflammatory conditions for which we currently don