Capital raising buys time for Alchemia

Brisbane firm Alchemia has capped a lengthy hunt for additional investment by securing $2.75 million in fresh funding, according to CEO Tracie Ramsdale.

The new injection came primarily from existing investors but at least one new external backer came in on the round, Ramsdale said.

It should sustain Alchemia for another year at the conservative cash burn rates that the company instituted in March this year when 17 employees were laid off in a 30 per cent staff cutback.

Despite its replenished coffers, Alchemia has no immediate plans to reverse those cutbacks, she said.

"We will maintain a tight rein on costs for the foreseeable future. Even though it looks as though we have turned the corner and gotten through the worst, caution is the best policy."

Ramsdale reported that investors appear to have begun filtering back into the biotech sector over the last few months.

"The trend didn't affect us directly because we had already secured financing and were just going through the documentation process," she said. "But the general consensus is that conditions are easing and investors are becoming willing to invest again.

"The last couple of months have seen an improvement in the biotech sector both in the US [where Nasdaq's biotech index posted a 32 per cent lift in the June quarter] and here in Australia."

But Ramsdale warned that the "jury is still out and we need to see a couple of more months of sustained activity."

Board member Dr Peter Andrews said the additional funds will buy time for Alchemia to bring to fruition some of the "phenomenal pipeline of potential deals" which its technology has created.

Since its inception in 1995, the Brisbane-based biotech has won wide recognition for its skills in carbohydrate and synthetic organic chemistry technology. It has attracted grants and investment totalling about AUD$25 million and developed novel scalable methods for synthesising carbohydrates.

Its patented platform, Versatile Assembly on Sugar Templates (VAST), provides a tool for quickly building designer carbohydrate molecules as drug candidates. Carbohydrates have fertile therapeutic potential as the basis for new drugs for conditions ranging from cancer to bacterial infection and cardio-vascular disease but manipulating their complexity requires tools such as VAST.