Amrad sells property, gets to stay on

Melbourne firm Amrad has sold its 4.7 hectare Richmond property to RMAC, a joint venture between Macquarie Bank and R Corporation, in a deal that allows Amrad to lease back its laboratory space, and provides a cash consideration of $AUD47.5 million.

The transaction will net Amrad around $AUD28 million after the costs of divestment have been finalised, putting it in strong financial position for continued investment into its R&D programs.

"It's more than anyone expected really," said Amrad chairman Olaf O'Duill. "It gives us a very good amount of cash to invest."

O'Duill said that the increased cash reserves would offset R&D expenditure resulting in a lower burn rate.

"It is critical to achieve the right balance between an R&D spend which advances the drug discovery and development pipeline to a point where the drugs become real commercial prospects and the prudent investment of funds to maintain cash reserves for future growth," he said.

Amrad will be entering a lease arrangement with RMAC, allowing the company to stay in its current facility for the time being.

"It's a good long period with a great deal of flexibility," O'Duill said. He noted that some of the alternative offers would have required Amrad to move out immediately.

Cerylid and two other tenants sub-leasing space in the Amrad facility will serve out their remaining leases, he said.

O'Duill said the sale of the property would allow the company to focus on commercialising its science.