BioWorld International Correspondent
SYDNEY, Australia - Despite the Australian stock market showing little life, with few IPOs, venture capitalists are finding plenty to invest in with financing house Rothschild planning an A$60 million (US$31.2 million) investment in biotechnology ventures.
A section of Rothschild specializing in bioscience investment, based in Melbourne and called Rothschild Bioscience, has raised A$40 million for Rothschild Bioscience Ventures II (RBV II) for investment in biotech projects and is confident of raising another A$20 million by the end of June.
Brigitte Smith, Rothschild Bioscience associate director, said that the section's first fund started in 1998, called the Australian Bioscience Trust, has invested two-thirds of the A$42 million it raised, and that was a good sign to start another fund.
Both Australian Bioscience Trust and RBV II can invest in any bioscience project, including devices, but to date almost all of its money has been invested in biotechnology projects. Those projects include the company Alchemia Pty Ltd., based in Brisbane, which specialises in manufacturing hydrocarbates; Cerylid Biosciences Ltd. in Melbourne, a drug discovery company; and Entigen Corp., a bioinformatics company in Sunnyvale, Calif.
Smith said that the major institutional funds (including pension funds and a private investor in Singapore) are ready to invest and there are plenty of projects to invest in. The fund was already in the due diligence stage for investment in one project but she could not give details.
While the Australian stock market is showing little signs of life, the biotech stocks are easily outperforming the rest of the market. Since June of last year, although the stock market has overall remained in the doldrums with no major movement up or down, the separate Health and Biotech Index has surged ahead.
At the beginning of June last year the index was around 3,350. At the close of business on Friday it stood at just above 5,000. Despite that additional activity, there have been very few biotech IPOs.