SYDNEY - A group of senior figures in the Australian biotech industry has raised A$15 million for investment in various biotech projects, with plans to list the resulting investment company within the next 18 months.
To date the group, operating as Medica Holdings Ltd., has raised A$1.5 million from 20 private investors, with another A$1.5 million to come from the same source. It is now making the rounds of Australian institutional investors to raise the rest.
So far the money has gone into a number of projects in different biotech fields, with one investment being the purchase of 11 percent of Alchemia Pty. Ltd, a company specializing in the new area of producing complex carbohydrates to order for use in other biotech projects and manufacturing.
One novel feature of the Medica venture is that the money is being invested through a pooled development fund (PDF), a form of mutual fund that allows tax breaks for local and overseas investors, provided the money remains in the fund.
PDFs previously had never been used for investment in biotech projects and rarely are seen in other forms of investment in Australia, despite the apparent tax advantages. Kevin Healey, Medica's managing director, said a problem with previous attempts to use PDFs for investment is that they were set up as “cash boxes,“ or companies with cash but no business, and had to look for projects to support.
By contrast, Medica already has projects to support - projects further advanced than start-ups, but still far from established.
As previously reported, another group specializing in high-tech investment, the Australian Technology Group, has invested A$2 million in Alchemia. (See BioWorld International, May 27, 1998, p. 1.)
Believed to have promising technology for solid-state synthesis of carbohydrates, a process that is highly labor intensive, Alchemia now is setting up operations in Brisbane and is looking at commercial opportunities in several market segments, including the sale of reagents for use by carbohydrate chemists.
Healey said he wants to put together an investment company that can support a number of excellent biotech opportunities.
The company would invest in a range of what he described as platform technologies - that is, those with several applications - rather than just a single technology that might later prove of little value, he said.
Healey said the original 20 investors who invested A$1.5 million have agreed to “chip in“ again, and Medica is talking to institutions about raising the remaining money in a private offer that closes June 26.
Apart from Alchemia, Medica plans to invest in a company developing molecules derived from the venom of Australian animals and insects, and another company involved in the computer design of molecules to mimic a range of hormones and cytokines. Still another investment is Cytopia, a company whose technology deals with the activation of immune and inflammatory responses in cells.
Medica is notable for having a number of luminaries on its board, including John Hasker, national chairman of the Australian Red Cross Blood Service, and Geoffrey Vaughan, former national manager of the Therapeutic Goods Administration (Australia's equivalent of the U.S. FDA). *