Looking sharp in two hats

Scientist-turned-financier Dr Kevin Healey is one of an elite group which has used its life science credentials as a springboard to make a splash as venture capitalists.

The group includes Rothschild Bioscience Managers' Dr Geoff Brooke (who earned a degree in medicine from Melbourne University) and Dr Carrie Hillyard, life sciences partner with CM Capital Investments (who was R&D director at Agen Biomedical).

Healey not only made the transition to the venture capital world, he founded his own company, Medica Holdings, which listed in 1999 and to date has raised about $24 million in venture funds.

These days, Healey wears two hats. He's both managing director of Medica Holdings and CEO of Melbourne drug discovery company Cytopia.

Medica has an 88 per cent holding in Cytopia and Healey took over the CEO post because "where you make a large investment in a company in its early days, it is desirable to grab its helm and make sure it is on track."

However the dual role can place him in a delicate situation, particularly if Cytopia is dealing with competitive or co-operative situations involving other companies in which Medica has investments.

"It can cause a few issues and sometimes I have to absent myself from those discussions," says Healey.

The person who steps into the gap is Cytopia founder, and now its research director, Andrew Wilks, who operates more or less in parallel with Healey in terms of senior management.

A second drawback to acting both as biotech CEO and risk capital chieftain lies in finding enough time to do both jobs well, Healey says.

Healey sees a point approaching when it will no longer be a feasible option for him to occupy the peak position at both Medica and Cytopia.

Besides Cytopia, Medica has investments in combinatorial chemistry company Alchemia (18.6 per cent) and venom specialist Xenome (51 per cent).

"If Medica picks up a couple of more investments and Cytopia continues to perform well, we'll be in the market for a top individual (to replace Healey in Cytopia's senior management ranks)."

Stepping stones

Healey made the transition from professional researcher to professional risk capital manager in stages. He took his doctorate in chemistry at the University of Melbourne and spent 16 years as a research scientist at CSL, ending as head of its immunochemistry R&D division.

From there he moved into business development management and technology strategy consulting for biotech companies who wanted to commercialise and licence their technology. That included stints as principal consultant with Invetech and a director of consulting company Insite Advisors.

The final transition came in 1997 when he founded Medica, which listed two years later and to date has raised more than $20 million in pooled funds. Of that, about $14 million has been invested and cash reserves stand at $6.5 million.

Medica's model is different from VC funds, which tend to have a fixed pool of money, says Healey.

The company goes to the market for funding on the basis of its success in past projects and by telling investors precisely what their funds will go into. Each successive capital raising has been done at a higher valuation which shows, according to Healey, that Medica "commands a fairly high degree of respect in the marketplace."

As a result, "when we talk about raising money, we get a hearing."

The flagship of its investment fleet, Cytopia, is in the process of changing gears from drug discovery to development and will announce "some according large pre-clinical developments in the near future".