WA biotechs are drowning in a sea of red as yet more negative results are reported.
The state’s biotech sector is burning through its cash reserves, with the latest round of financial results revealing a cumulative loss of more than $37 million for the 2013-14 financial year.
That figure takes the cumulative loss from 16 listed biotechnology companies over the past five years to $185.5 million.
While there has been some good news, with a number of local developments either bought or licensed to international players, success stories are few and far between and are yet to result in profits.
For example, US-based Sarepta Therapeutics is progressing clinical trials of a therapy for duchenne muscular dystrophy developed by Western Australian researchers.
Pharmaceutical company iCeutica, which was founded on a UWA development, was bought by its US-based partner Iroko Pharamceuticals in 2011 and recently received sales approval from the US Food and Drug Administration.
And health company Fitgenes is planning to acquire Gordiantec – an entity spun out of the Harry Perkins Institute and UWA research on genomes.
Meanwhile, listed local companies that have held on to developments are largely relying on shareholder support to stay afloat.
Admedus Innovative Health Solutions, for instance, has raised $28.4 million during the past year to fund its efforts to commercialise manufactured tissue to repair defects in the heart.
The technology – called CardioCel – is being used by surgeons in Europe and was first sold into the US last month.
Admedus has heralded sales clearance in Europe and the US as factors putting it in a good position for additional growth over the next year as it also works to firm up vaccination developments.
It has a lot of ground to make up, however, as research done by Business News reveals Admedus as the state’s worst performing biotechnology company when judged by the latest financial results.
The company reported an $8.2 million loss for the 2013-14 financial year, up from $2.4 million for the previous corresponding period.
Admedus was previously known as Allied Health Group, following a merger of unlisted Allied Medical and listed company bioMD in 2011.
According to the company’s annual reports, the listed entity has lost $22.8 million over the past five years.
Despite the losses, managing director Lee Rodne had his base salary increased from $260,000 in 2013 to $350,910 in 2014, which made his total income $454,393 when superannuation and share-based benefits added were included.
Avita Medical’s financials tell an even less-inspiring story; since 2009 the company has reported losses totalling $28.5 million.
Its $8 million loss in 2013 and $552,363 remuneration package of former chief executive William Dolphin prompted shareholder revolt at last year’s annual general meeting, with 75 per cent voting against the remuneration report.
Mr Dolphin, who received total remuneration of $929,061 in 2011, and former chairman Dalton Gooding subsequently resigned.
Avita Medical closed the 2013-14 financial year with a $5.1 million loss.
The company started out as Clinical Cell Culture and was founded in 1993 by burns specialist Fiona Wood, who had helped develop a regenerative technology referred to as ‘spray-on skin’.
Iterations of that product are still being progressed through clinical trials, in part funded through the sale of other products focused on the respiratory system.
Another company focused on tissue regeneration, Orthocell, has recently opted to tap into the public market to further its technology.
The Murdoch-based company listed on the Australian Securities Exchange in August following an $8 million initial public offering.
Orthocell used existing sales of one of its products as a drawcard for investors in its listing prospectus earlier this year, and conceded the business was at a very early stage, which made forecasting financial results problematic.
Previous annual losses have been in the vicinity of $1 million mark in recent years, but lifted to a $2.2 million loss for the 2013-14 financial year.
Nonetheless, Orthocell closed its IPO oversubscribed in July, with Australian Super Investments coming out as the largest shareholder with 8.36 per cent.
At the time, managing director Paul Anderson said the company had received ‘fantastic’ support from institutional and private investors.
Meanwhile, nearly a decade after spinning-out of the Telethon Child Health Institute and listing on the ASX, Phylogica is still struggling to make a profit from its drug discoveries.
It has raised $42.2 million in capital since incorporation but has reported consistent losses. Cumulative losses over the past five years amount to $18.8 million, with the 2013-14 financial year accounting for $3.3 million of that.
The company reshuffled key staff last year with co-founders Paul Watt and Richard Hopkins switching roles.
Dr Watt had been the company’s chief executive but moved into Dr Hopkins’ role of chief scientific officer in July last year.
Phylogica’s annual report for the 2013-14 financial year shows Dr Watt received a salary package totalling $377,268 for the year.
Dr Hopkins, in the chief executive role, received salary and benefits worth $339,583, which compared with Dr Watt’s remuneration of $450,227 during his last year as chief executive.
