Few dauntless biotechs still queuing for IPOs

Mixed results from recent IPOs in the Australian and international biotech sectors have not daunted several local biotechs' plans to list on the ASX in coming months.

Grandbridge (ASX:GBA) spin-out BioPharmica -- a Western Australian company with projects in cancer diagnostics and therapeutics, as well as genetics-based bacterial diagnostics -- is expected to list in the next couple of weeks (expected ASX code: BPH). The company announced on July 6 that it was accepting oversubscriptions until fully subscribed or until July 16. The float aims to raise at least AUD$2.25 million, and up to $4.5 million if oversubscribed.

Living Cell Technologies (NSX:LCT) has hit a few speedbumps in its quest to graduate from the Newcastle Stock Exchange to the ASX, with ASIC placing the company under an interim order preventing offers, issues, sales or transfer of securities while it sorts out a few administrative matters.

The troubles stem from LCT's back-up plan to issue new shares through a rights issue on the NSX, if it was unable to increase shareholding sufficiently to be promoted to the ASX -- a plan that seemed unlikely to happen, given the interest in the company from institutional investors. But unfortunately, the company neglected to apply for the NSX rights issue, which ASIC considered a breach of corporations law. In addition, some minor problems arose with the underwriting agreement after changes were made. ASIC is currently looking at a supplementary prospectus dealing with the issues they raised.

"We're speaking to a lot of [existing] investors and they are comfortable with the situation. Also, institutional investors are OK with it, and we [are still getting] lots of enquiries from potential investors," said LCT's chief operating officer Dr Roger Coats.

"It's frustrating, administrative, but not deleterious to the projects -- the [pre-clinical animal] trials are progressing as scheduled."

Meantime, Amrad spinoff Avexa has set the date for its ASX listing to be of 22 September 2004 (expected ASX code: AVX). The demerger -- which will not involve any capital raising -- will see about 80 per cent of the shares issued in the new company go to Amrad shareholders, while Amrad will retain 19.99 per cent. The company will invest $12 million into the spin-out for proof-of-concept studies.

Amrad CEO Peter Smith said the company had decided not to raise capital as part of the demerger, in part because of the softening of the market, but also because proof-of-concept results for the hepatitis B program were due shortly after the demerger.

"In the anti-infective space, animal models give so much data about the drug. Anti-infectives present a higher risk upfront, but if we get over the risk point, we'll have something really valuable," Smith said.

Acrux CEO Igor Gonda recently told Australian Biotechnology News that he hoped the markets would be receptive to a listing later this year. And Proteome Systems is looking at listing at a market capitalisation of around half of the $300 million initially proposed.