Cryosite makes ASX debut

Australia's first for-profit tissue banking service company, Cryosite, listed on the ASX today (May 9).

Two million shares were turned over within the first hour of trading and at 11am the first sale was at 44c, up 4c from the initial share offering.

Managing director Gordon Milliken said he was pleased with the active opening, which was in line with the company's expectations.

Cryosite's board of directors, legal advisers and analysts were all at the Australian stock exchange to welcome their listed company.

"It was a big day for us - [trading] is a new game to most of us on the board executive," Milliken said.

Following the listing, he said, Cryosite had no future plans for additional capital raising. As a service company, it will be bring in revenue from cord blood and other contracts.

An over-subscribed initial public offering in March raised $3.44 million, bringing the company's market capitalisation to $14 million.

Milliken said the money raised would go toward setting up interstate offices for Cryosite's cord blood collection services. Melbourne and Brisbane offices will be set up first and they are also employing specialist archival storage sales representatives.

For services in South Australia, Western Australia and the Northern Territory, negotiations are underway to establish a joint venture with a small company to market the cord blood services.

"It's a one man company, and he has a medical background and an interest in the cord blood collection," said Milliken.

Each state will transfer the samples to the storage facility in Sydney.

Sales are up, he said. Within a month of launching the cord blood service marketing campaign, Cryosite's cord blood stem cell contracts rose dramatically from 59 contracts to over 100.

"We are very excited about the growing number of contracts and we think it will keep growing at this rate," he said. "We have no reason to believe it won't."

Sixty-two obstetricians from around Australia and New Zealand are participating in the cord blood service.

"We expect that the number to go up fairly dramatically by the end of the year," he said.

Milliken said the number of obstetricians participating would really depend on how many mothers requested that their obstetricians collect the cord blood from their babies at birth.

Deutsche Bank analyst Kiara Bechta-Metti said the Cryosite listing was a reasonable debut for a start-up company that could get cash flow within a short time.

The company should be able to sustain itself after the listing, she said.

Cryosite has some competitors in the US, she said, but none had gone public because by US standards they were too small.

"In the US, the tissue banking services industry needs to mature some more," she said.

But Bechta-Metti added that because of the amount of overseas competition, Cryosite would be limited to doing its business in Australia. As well as storing cord blood, Cryosite provides a services to hospitals and biotechnology companies allowing them to store and archive their precious biological materials and products such as tissue, DNA and clinical drugs in a stable and low-temperature.

Since early this year, the company has also been the exclusive distributor of American Type Culture Collections and other microbiological lines in Australia and New Zealand.

Milliken said the contract with ATCC began operating in April and has gross sales of $43,000. "We expect it to expand," he said.