Funds needed to unlock biotech riches

November 4, 2004

Funds needed to unlock biotech riches

If the country is to grow a successful biotechnology industry, it needs sector focused venture capital funds as well as scientists and entrepreneurs with the vision and passion to build world class companies.

And if the investment is not forthcoming, many good New Zealand food and agricultural ideas could be lost to the nation.

So says Howard Moore, executive director of the Life Science Ventures investment fund, addressing the NZ Venture Capital Association Conference in Auckland today.

Mr Moore says New Zealand's expertise in food, agriculture and the life sciences has a justifiable reputation.

"But it takes money to take greater advantage of the knowledge asset this country has built up - big money."

Addressing the conference on the topic funding biotechnology in New Zealand, Mr Moore outlined some personal examples of the options available to the sector.

In addition to dedicated and passionate leaders, the future for funding the fledgling biotech industry depends on a number of very important factors.

"Significant government commitment to funding biotechnology research and development is vital as is support for research from sector groups and major corporates such as Dairy Insight, Meat and Wool, Fonterra and the like.

"Government plays an important funding role for pre-seed and seed funding through its support of the Venture Investment Fund program."

Mr Moore says there is also room for specialised biotech sector-focused venture capital funds.

"But it is also extremely important that venture capital funds active in New Zealand have global reach in terms of both fund raising and divesting successful start-ups."

Mr Moore provided a number of examples of successful biotech funding in New Zealand.

Life Science Ventures is a NZ$100 million food and agricultural investment program. Mr Moore believes it will go a long way to unlocking the huge potential for new value from New Zealand and Australia's considerable food and agriculture heritage.

"LSV's funding brings together four key investment groups - industry heavyweights and financial, government and individual investors."

Mr Moore also cited ViaLactia Biosciences and Tercica, only the second New Zealand-founded company to list on the NASDAQ.

"Tercica Inc. was funded initially by a number of angel investors followed by a venture capital round. The company then relocated to the US. In March 2004 Tercica had an IPO and is now a NASDAQ-listed company.

"On the other hand, ViaLactia was exclusively funded by the NZ Dairy Board commitment to $150 million over five years," he told the conference. ViaLactia is now a subsidiary of Fonterra.

Mr Moore was executive vice president of Tercica, established in October 2000 to develop and market endocrine drugs, medicines that correct the over-production or under-production of the body's natural hormones.

About LSV: Life Science Ventures (LSV) is a NZ$100 million (US$65 million) life science venture capital program focused on unlocking new value from New Zealand and Australia's food and agriculture heritage. It is a joint venture between Direct Capital and the commercialisation arm of the Crown Research Institute AgResearch. LSV is managed by Life Science Management Limited (LSML).

ENDS

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