We're not getting out of biotech: QIC

Rumours have abounded in recent weeks that Queensland Investment Corporation- which over the last three years has emerged as the largest single investor in Australian biotechnology - is selling out of the sector, prompted by the funds' sale of its shareholding in biotechs Rockeby Biomed (ASX:RBT), Biodiem (ASX:BDM) and Bionomics (ASX:BNO), and reduction of its stake in Eiffel (ASX:EIF).

So, is QIC getting out of biotech?

"No," said Lawrence Gozlan, Queensland Investment Corporation's biotechnology analyst. "If they are, I've got some real problems -- being the biotech analyst."

Gozlan said the fund is simply "actively managing" its biotechnology portfolio. "In our analysis, there were better opportunities elsewhere within the biotechnology industry," he said of the recent share sales. He declined to comment on whether QIC had made a profit or loss on the recent share sales.

"I think the entire biotech market has been depressed lately, but biotechs are cyclical. Right now we're definitely in a trough in a cycle, and it's a good time to buy.

"We're still looking for quality management, products in clinical development, a strong intellectual property position and excellent science with clear competitive advantages in large addressable markets.

Gozlan defined "quality management" as a mixture of skills in science, business, big pharma and small biotech and the ability to execute on the company's business plan. It is critical that management can prove they can achieve their milestones, he said.

He said QIC is still looking to make further investments in biotechnology. Currently, its holdings include Acrux (ASX:ACR), Chemgenex (ASX:CXS), Meditech (ASX:MRT), Amrad (ASX:AML), Circadian (ASX:CIR), CSL (ASX:CSL), Prima (ASX:PRR), Imugene (ASX:IMU) and Pharmaxis (ASX:PXS).