GRAEME KAUFMAN: $400m FUND DELAYED, STILL BULLISH
July 13th 2008 00:09
Thursday July 10, 2008
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STRATEGIC LIFE SCIENCES
The co-founder of Strategic Life Sciences Graeme Kaufman says that although the proposed $400 million fund has been delayed, the sector is better than ever.
Formerly CSL’s chief financial officer and a senior Circadian executive, Mr Kaufman told the Life Sciences Lunch Club in Melbourne that he had read comments about the UK biotechnology sector that echoed perceptions in Australia, but said “we are in a vastly better position to take things forward than we were several years ago”.
He said capital markets were more sophisticated than a decade ago, venture capitalist markets were more vibrant and Australia was better served by specialist analysts such as ABN Amro Morgans, Intersuisse and Wilson HTM “and we have better sources of news information” he said referring to David Blake and Bioshares as well as Biotech Daily.
He said a number of companies were in late stage trials and companies like “Chemgenex, Avexa and Acrux were leading the way in getting there commercially”.
Mr Kaufman said it was hard not to be bullish about target markets with an ageing population and the internet increasing an informed public which demanded the availability of new treatments and reimbursement for those treatments.
“The asset side of the ledger in my view is looking pretty positive – despite the doom and gloom,” Mr Kaufman said.
He said the other side of the ledger was low asset prices which created buying opportunities but with no funds available and the opportunity to raise capital very limited.
Mr Kaufman admitted that his own proposed $400 million fund was behind schedule and had hoped to close the fund manager with $6 million by the end of March. It has not yet closed.
In November 2007 Mr Kaufman said the Strategic Life Sciences fund would be “a fund of funds” (see Biotech Daily: November 12, 2007).
“We’re not even looking at sophisticated investors,” he said at that time.
The $400 investment fund has not yet opened and in answer to questions said Strategic Life Sciences had “very small amounts locked in” but was “looking at $150 to $200 million” from two domestic institutions and offshore interests.
Strategic Life Sciences director of strategy and business planning Terri Clementson said the fund was looking at a totally different approach.
”We’re not picking winners but putting together a supply chain,” Ms Clementson said.
“That’s why the Arabs and the Chinese are interested in us.”
Mr Kaufman said Australia needed “to move out of the project paradigm”
“We have not so much listed companies as listed projects,” he said.
“We need to be more broadly based than simply projects.”
He said Strategic Life Sciences was building an investment team of four people with experience at CEO level as well as retaining an advisory group.
Asked specifically what kind of companies the fund would invest in, Mr Kaufman said he had learnt from former Circadian chief executive officer Leon Serry to “invest in people not technologies”.
“Making decisions on technologies is quite difficult. People are much easier to judge.”
He gave Chemgenex as a good example saying the existing technology was not going to work so the CEO brought in a new technology that would.
He said the issue of board-management relationships was “a fraught issue in the sector”.
“You need some decent industry people on the board. They can be destructive if they don’t understand the issues,” Mr Kaufman said.
The meeting also discussed taxation measures to replace the commercial ready grants system and a need for better representation at the Federal Government level.
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