BioStart kicks off with Mimetica

The first investment in a young biotech company has been made by the $6 million BioStart pre-seed fund set up a year ago by the Queensland government.

Though not officially confirmed, it is understood drug design company Mimetica Pty Ltd has received $125,000 - the maximum allowed any one company under BioStart's charter.

It is believed BioStart has capped a lengthy due diligence process by deciding on a second applicant as well.

A spokesperson for Innovation and Information Economy Minister Paul Lucas said no applicants have been formally endorsed by BioStart.

Earlier this year, BioStart drew criticism in some venture capital quarters for taking what was seen as an unreasonably long period to finalise investments. At the time, officials defended the fund's screening procedures and predicted the first successful applicants would be announced by last month.

Yesterday, the spokesperson for Lucas said it would be "incorrect" to assume the government was holding up an announcement in order to synchronise it with high-profile biotech industry conference Bio 2002 starting June 9.

A joint venture between the State government and Sydney venture capital company Start-Up Australia, BioStart was designed to fill a gap in the early-stage biotech funding market.

Since its formation, the State government has created the $100 million Queensland BioCapital Fund to be administered by the Queensland Investment Corporation.

BioCapital is a 10-year fund based on successful US biotech venture capital models and should be fully invested within five years, according to QIC head of research Neill Colledge.

QIC is recruiting a team of seven to 10 investment professionals to staff the venture and expects BioCapital to be underway by September.