HK biotech maverick tipped to open in Melbourne

Asia's wealthiest tycoon, Li Ka Shing, is poised for a major foray into the Australian biotechnology sector with the top brass from his newly floated biotech interest CK Life Sciences meeting with senior Victorian government officials in Beijing this week.

A spokeswoman for Melbourne Lord Mayor, John So, confirmed to Australian Biotechnology News that a meeting between the mayor, Victorian Premier Steve Bracks and senior CK executives took place in Beijing on Sunday.

She declined to detail the exact nature of discussions, but it is understood that the Hong Kong company is negotiating to build a major research facility.

So, who boasts extensive business contacts in Hong Kong and mainland China, is currently accompanying Bracks on a trade and investment mission to China this week to drum up support for the state's biotechnology industry.

"I am looking forward to working with the state government and developing Melbourne as the biotechnology research centre of Australia." he said.

CK Life was spun off from its Hong Kong parent, property behemoth Cheung Kong Holdings in an IPO last May going public on Hong Kong's second board, the Growth Enterprise Market (GEM) last month. The GEM was formed in 1999 as a new vehicle to list tech and related companies and does not require full profit disclosure.

The CK Life listing, while seeing nothing of the pre-April 2000 market hysteria, was seen as providing a ringing endorsement of the Asian biotechnology sector by the region's richest and most successful entrepreneur.

Despite the company having never turned a profit and having just one product, Asian business analysts have valued it at between $A2 and $A4 billion, with Li's name and reputation factoring heavily in the price.

According to local industry observers, the establishment of a major biotech facility in Australia makes good commercial sense for Li given Australia's rich skills base and much larger biotech sector relative to Hong Kong's.

Australia was recently identified by Ernst and Young as by far the largest biotechnology country in Asia and the sixth largest in the world.

"If someone like Li were to establish a pharmaceutical facility of some sort here it could only be good for Australia," said Intersuisse research director Peter Russell. "It may take staff away from existing companies or even increase salaries but overall it would contribute to the general strength of the local industry."

CK Life Sciences is believed to have spent more than $A100 million on research and development, some of which is funding work on HIV and cancer drugs. The company is 60 per cent owned by Cheong Kong Holdings and 40 per cent owned by Li himself, who is widely reported as having established infrastructure development as a key priority.

The bigger size of Australia's biotech industry and its skilled workforce has helped to significantly raise Australia's profile as a viable base for foreign biotechs, said Tim Murphy, director of the BioMelbourne Network.

"Global investment money is looking around for the next hot spot and Australia, especially Melbourne, has been widely identified by major overseas investment and industry groups," Murphy said.

According to Intersuisse's Russell, biotech industry clusters such as those which are starting to evolve in Victoria and Queensland are now of key interest to many foreign biotech companies concerned with achieving critical mass.

"It has been widely noted that where you can build centres of excellence with critical mass you can build strong industries," he said.

CK Life Sciences did not respond to offers of an interview by the time of publication.