BioWorld International Correspondent
LONDON - The U.S. biotech investment company Amphion Capital Partners LLP transformed itself into a UK company and completed a listing on the Alternative Investment Market (AIM) in London, raising £5 million (US$8.6 million).
The money will be used to develop new life science companies and Amphion Innovations plc, as it now is known, has two UK university spinouts in mind for its first post-IPO investment.
Richard Morgan, CEO, told BioWorld International: "We always thought it would be good to get a market in our shares at some point, and then AIM came along. However, an LLP was not deemed a suitable vehicle for a listing, so we converted to a plc."
Amphion placed 20 million new shares at 25 pence per share and had a market capitalization on entry to AIM of £22.5 million. Morgan said UK investors were wary of a quoted technology investment company, but role models such as BTG plc and IP2IPO plc had helped persuade them to take part.
The portfolio consists of seven companies in which Amphion has invested more than $2 million. Those include Motif Biosciences, a population genomics company using genomics data from the Arabian Gulf region to research common disorders; Wellgen Inc., a nutrigenomics company; and Beijing Med-Pharm Corp., a company providing registration, marketing and distribution services for Western pharmaceutical companies in China.
The value of those holdings at the point of the IPO was $11 million.
Amphion's model is to invest at the very early stages of development, taking a large ownership position, and stewarding a company for several years. "We act as consultants, venture capitalists and merchant bankers," Morgan said. "Each company becomes a partner, and we typically own 30 percent to 40 percent. We put in our own money, and use this as a basis to bring in different types of funding at different stages of development."
Amphion exits through IPO or trade sale. "Our investments are longer term than venture capital [funds]. We don't take underperforming [companies] out and get rid of them," Morgan said.
Over the past 20 years, six life science companies have left the Amphion portfolio. Vortech, Sequus and Medisense were sold for a combined total of more than $1.6 billion, while Nasdaq-quoted Quidel Corp., La Jolla Pharmaceutical Co. and Celgene Inc. have a combined market capitalization of more than $8 billion.
Morgan said that of the current portfolio, Wellgen is looking to go public now, and one other company is lining up behind.
Amphion plans one new investment in the next six to 12 months and is looking at two candidates, one a spinout from Newcastle University, the other from Oxford University. "We usually like to find companies that are already formed but are at an embryonic stage," Morgan said. "We've always said we would never have more than 10 companies in the portfolio. We like to invest early and own a large piece."