Find the right investor, biotechs warned
Thursday, 18 August, 2005
Biotechnology companies should not take money from just anybody, a meeting in Sydney heard this morning.
Instead, it's important for firms to find "the right kind of investor" for them, Sunshine Heart CEO Don Rohrbaugh told a breakfast meeting of the Australian Venture Capital Association (AVCAL).
"Do you want to get married to them? Do they trust you? You must get money where you can get it but you must have a strategy -- they'll sit on your board, so they must be compatible," said Rohrbaugh.
He believes that investors run in packs, "Someone hears that you have invested and everyone else starts to."
The Sydney-based company, which has developed a heart assist device to treat moderate to severe long-term heart failure, has had successive rounds of capital raising.
"We have AUD$8 million in the bank and are likely to raise capital at the end of the year," he said.
Sunshine Heart has successfully implanted its device in two patients in New Zealand. The first patient has since died, but not because of the device, Rohrbaugh said. "The death was a disappointment but expected. With any new technology we start with the sickest of the sickest," he said.
He explained that the patient had a 15-year history of heart failure, with concomitant diabetes in addition to chronic kidney and liver failure, and had been assessed as not suitable for heart transplantation.
"The patient had the implant for three months before his death and we learnt so much from him in that time," said Rohrbaugh, who indicated that an announcement of Australian trials was on the cards.
Also speaking at the breakfast was David Andrews, general manager of University of NSW spin-off HepatoCell Therapies, established to commercialise a cell therapy for liver disease. The technology produces clean, viable liver cells (hepatocytes) from surgical waste material and is currently being tested on animals, Andrews said.
"We know the science works," said Andrews. "We need AUD$1 million to run phase I clinical trials, which are planned for mid-2006."
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