LONDON _ A British investment fund recently set up by RothschildAsset Management Ltd. expects to plug the investment gap for biotechcompanies that have already gained a stock exchange listing."We see that as the most significant opportunity, and rather an obviousone," said Jeremy Curnock Cook, a director of Rothschild AssetManagement.The fund, International Biotechnology Trust Plc (IBT), hoped to raisearound L100 million (U.S. $150 million). So far, it has raised only L35-40 million. But, according to a Reuters report on Monday, the trustplans to push ahead. Shares will be quoted on the London StockExchange. Robert Fleming & Company are sponsor and broker to theissue and Rothschild Asset Management will act as investmentmanager to IBT.The aim, said Curnock Cook, is to provide the capital companies needto bring new drugs to the market. "We want to create a fund which willenable sizable investors in some of the industry's most promisingtechnologies," he said .IBT expects to invest in companies that have already successfully madetheir way to the market. At this stage, said Curnock Cook, there isalready some confidence in both the technology and the market for it;the key issue is the company's business plans, "and can they executeaccording to plan?"The new trust expects to help in this process by being an activeinvestor in companies. "We should be able to make that executionprocess a little more secure," said Curnock Cook. "Our role would beto provide company management with strategic support regardingmarketing, patents, recruitment and other issues facing emergingbiotechnology companies."The trust's management expertise will also fit in with the currentthinking in the life sciences industry. The biotech market has changed,said Curnock Cook, in that an increasing number of companies nolonger see it as their goal to become stand alone entities. Instead, hesaid, they want to be "part of the strategic thinking of majorpharmaceuticals companies." IBT's management expertise could helpcompanies to achieve this ambition.In addition to consultants drawn from the industry, IBT will retain anadvisory board of scientific experts, including Sydney Brenner, formerdirector of the Molecular Genetic Units of the Medical ResearchCouncil, and Edward Ziff, professor of biochemistry at the New YorkUniversity Medical Center. "We are a very specialized investor in thebioscience field," said Curnock Cook.He maintained that the time is right for a new style of investment trust."We couldn't have thought of doing it three years ago," he said. Therapid growth in the biotech business means that a growing number ofcompanies are now at a relatively advanced stage. And while the risksmay be lower, their demand for cash is higher. Companies cannotexpect to return to the market every time they need more cash. IBT willcreate some flexibility in the way in which companies financedevelopment.Curnock Cook said most of the money will likely be raised in Europe,but he anticipates that IBT's investments will reflect the geographicalspread of the biotech industry. This means that around 70 percent ofthe money could end up in biotech companies in North America. IBTwill probably limit its interest to a portfolio of around 15 companies.Rothschild already manages a trust in the biotech sector. Launched in1981, Biotechnology Investment Ltd. (BIL) invests in early-stagecompanies.Listed in London, BIL has 1,400 shareholders, with 15 percent based inthe U.S. According to NatWest Securities, in the five years endingSeptember 1993, BIL was the highest performing U.K. fund investingin the venture capital and unquoted securities sectors. The company hasinvested in 73 companies at various stages of development. It was anearly investor in Amgen Inc. and Genentech Inc.Curnock Cook said that this track record, and the role of Rothschild asa knowledgeable investor, will help those companies that it decides toback. IBT's funding, he said "act as a beacon to attract the lessspecialized investors. We have done that in BIL," he adds."Theoretically at least, we know what is going on."Rothschild is now talking to potential investors. Curnock Cook was inthe U.S. recently. He has also pitched the fund to investors in Australia,Singapore and Europe.The launch has been by way of a placing, and an offer for subscription.The placing closed on April 8, and subscriptions will close on April 28.Dealings in shares are expected to start on May 6.
-- Michael Kenward Special to BioWorld Today
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