TLX (ASX) TLX Chart

Originally posted by mnbvcxz12345: ↑

New fund targets companies battered by market doubts (copyright link)

New fund targets companies battered by market doubts
Jessica SierJournalist
Dec 11, 2023 – 11.14am
A new venture capital fund aimed at funding cash-starved Australian medical, biotech and health technology start-ups has banked $40 million of a planned $200 million, as public valuations hit record lows.
Hashan De Silva, abiotech investorwho cut his teeth as the first hire at private and public equity outfit Karst Peak, is hoping to take on cashed-up pharmaceutical giants as the first consolidation shoots begin to show.
Hashan De Silva, with pet dog Ghost, is on the trail of biotech and medical tech companies, with $40m under his belt. Louie Douvis
“Most of the venture industry is investing in science projects,” Mr De Silva said. “But we’ve found that investing in the later stages means we have more data to sink our teeth into and make a call.”
Biotech start-ups are struggling to raise fresh cash after the tech boom of 2021 ran out of steam. Those that managed to list on the ASX while interest rates were low and investor enthusiasm was high have since suffered heavy losses.
ASX-listed cardiac treatment company EBR Systems has suffered a 50 per cent fall in market value; neurological company Invex Therapeutics has been forced to close its doors, and will return its remaining cash to investors later this month; and cell therapy developer Chimeric Therapeutics is trying to raise fresh capital after its share price collapsed to 2¢ from 30¢.

“That whole class of 2021 has done pretty badly,” Mr De Silva said. “But that’s not to say some of the technology isn’t valuable or useful.”
Seeing opportunities
The market collapse has proved tantalising for investors such as Mr De Silva, who has persuaded entrepreneurs including Chris Behrenbruch, Patrick Davies, Glenn Haifer and Lou Panaccio to tip money into the new fund, which is called KP Rx.
Dr Behrenbruch is the chief executive of ASX-listed Telix Pharmaceuticals, whichrecently receivedTGA approval for its prostate cancer drug.
Mr Davies is chairman of ASX-listed Neuren, which develops therapies for neurological issues. And Dr Haifer sold his bioanalytical laboratory for around $300 million in 2021.
Mr Panaccio, meanwhile has built a long career commercialising scientific concepts, and is now executive chairman of ASX-listed Genera Biosystems, non-executive director of Sonic and chairman of Avita Medical.

“I have personally witnessed the scarcity of capital for early-stage healthcare companies which has further worsened in this market and led to significantly depressed valuations,” Mr Panaccio said.
“From this small group of capital allocators, very few specialist healthcare funds are looking to invest in companies at proof-of-concept stage with the vast majority focusing on very early-stage, drug discovery companies.”
Investment rivals
While the team hopes to snap up deals in companies struggling to fund clinical trials, they will have stiff competition.
Global pharmaceutical companies are flush with cash and in the past 12 months, some megadeals have signalled the start of a consolidation period.
Earlier this year, Pfizer bought Seagen for $US43 billion, and a month later, Merck bought Prometheus for $US10 billion. BioGen bought Reata for $US6.7 billion, Novartis acquired Chinook for $US 3.1 billion and Horizon bought Amgen for $27.8 billion.

Unlike software companies, biotech start-ups require hundreds of millions to billions of dollars to advance a drug from the laboratory to approval.
Smaller players in Australia are now assessing whether they can secure funding to carry on alone, or whether they approach pharmaceutical companies for merger opportunities or licensing agreements.
“There are so few specialist investors that are willing to take risks at the early stages,” Mr De Silva said.
Mr De Silva’s time at Karst Peak was spent picking stocks such as regenerative medicine business Avita Medical, which has climbed 109 per cent this year, and neurological drug developer Neuren Pharmaceuticals, which is up 82 per cent.

Expand

https://kp-rx.com/

KEYNOTE: KP Rx Healthcare Opportunities Fund Presentation, NWR Virtual Healthcare Conference

"We're backed by some of the most successful Healthcare entrepreneurs in Australia so the chairman of Neuren Patrick is is a foundational investor, CEO of Telix Chris, Lou Pannacio, David Cade and there's about 15 other Healthcare entrepreneurs that we don't have permission to name that are that are investors in the fund. So the the seed capital or the the cornerstone capital of the fund is 40 million, made up of a group of family officers Karst Peak and about 20 Healthcare entrepreneurs based in Australia. If you're interested in investing you can reach out NWR and they can put you in contact with me."

https://www.linkedin.com/in/hashan-de-silva/