THE listed biotechnology sector has sprung to life with Perth-based companies planning to raise more than $40 million from investors in Australia and overseas.
A couple of themes flow through the activities of pSivida, Regenera and Southpointe, which plans to change its name to Xceed Biotechnology.
First, the major asset of each listed company is, or will be, a major shareholding in an emerging medical technology firm.
Second, pSivida and Xceed have focused on ‘platform’ technologies, which have a wide range of potential applications.
The biggest capital raising has been completed by nano-technology company Sivida, which has enjoyed stellar share price growth in recent months.
It raised $6.5 million last week at a price of $1.16 a share, following a $21 million capital raising at $1.09 a share just one week earlier.
In both cases, the shares were placed with European and United States institutions, and as a result international investors hold more than 40 per cent of the company.
Managing director Gavin Rezos said he did not expect any further significant capital raisings, as licence revenue from the company’s BioSilicon ‘platform technology’ would start to flow initially in 2005, and to a greater extent in 2006.
BioSilicon is a ‘nano structured’ porous silicon with multiple potential applications, including in controlled drug delivery, diagnostics and tissue engineering.
Mr Rezos said the next major corporate event for pSivida was likely to follow the completion of clinical trials around September.
At that point, either pSivida would seek a US listing, or its 46 per cent-owned UK subsidiary pSiMedica would proceed to an initial public offering.
Regenera is planning to raise at least $8 million (and as much as $12 million) to acquire 51 per cent of Retmed, a spin-out from the University of Sydney that is developing treatments for eye disease.
Tony Fitzgerald, who has been in the medical technology sector for nearly two decades, is chairman of Regenera.
He previously worked for Cortecs Group and Inovax and is currently managing director of Resonance Health (formerly GEO2) and a director of syringe maker RiTract.
Mr Fitzgerald has adopted a similar corporate strategy at Resonance Health, whose main asset is the right to acquire 51 per cent of medical technology company Inner Vision Biometrics.
Dr William Ardrey, a WA Business News 40under40 winner with extensive experience in medical technology, including as an executive director of Perth-based and UK-listed CustomVis, has been appointed chief executive of Regenera.
Its investment target, Retmed, was established in 2001 to commercialise treatments for age-related and inflammatory eye disease.
It has developed Visagen, a potential treatment for some of these diseases, and is developing a device for improved drug injections into the eye.
Southpointe is currently sitting on $7 million in cash and plans to raise a further $4 million (and up to $4.5 million) from investors to fund two investments.
It has entered into a co-investment agreement with the Commonwealth Scientific and Industrial Research Organisation to jointly fund a start-up company called PolymerCo.
Southpointe will hold 50 per cent of PolymerCo, which will have worldwide rights to a new biodegradable, biocompatible polymer developed by CSIRO.
“PolymerCo’s platform technology has a number of potential competitive advantages,” Southpointe chairman Karl Paganin said.
“Xceed will work closely with CSIRO on the development and commercialisation of Polymer Co’s platform technology.”
Specific applications include as a bone glue for orthopaedic repairs and as a bone regenerator in orthodontic applications.
In addition, Southpointe has acquired Melbourne-based chemistry company Boron Molecular, whose technology also originates from CSIRO.
“Having established a large customer base domestically and overseas, Boron Molecular is seeking an injection of capital to enable the business to realise growth opportunities,” Mr Paganin said.
Southpointe will retire Boron’s $500,000 debt and provide $1.6 million of working capital.
Mr Paganin is an executive director of Euroz Securities, which is underwriting the capital raising.
David McAuliffe is chief executive of Southpointe and interim managing director of Boron Molecular.
He has been involved with many medical technology companies, including several companies mentioned in this article, namely pSiMedica, pSivida and Resonance Health.
The new capital raisings follow the recent announcement by a fourth Perth company, Grandbridge, which plans to list its biotechnology subsidiary BioPharmica on the Australian Stock Exchange.
BioPharmica will raise at least $2.25 million (and up to $4.5 million) to fund the further development of cancer drugs.
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