New bio-investor launches IPO

Australia's latest biotech share offering opens this week when device and diagnostics investment company Premier Bionics launches its IPO.

The initial public offering is intended to raise $3 million to pay for the company's first investment and to provide cash in the bank for future deals.

Chief executive officer Dr Martin Soust said the company, incorporated last December, was an investment portfolio company focused on the local market.

"Its inception was stimulated by potential deals that we saw were in the market place in terms of devices and diagnostics.... we have an opportunity to pick up investments that fit our criteria and there are plenty in the Australian market," Soust said.

Premier's first investment is in Pulmosonix, a Monash University spin-off formed to develop technology for non-invasive monitoring of lung inflation.

Soust said his company planned to invest up to $1.25 million in Pulmosonix to assist it to develop a working prototype of the technology, which is expected to fill a niche in the treatment of premature infants and adults with respiratory disease.

He said the investment was conditional upon the float proceeding, although Premier was also in a position to pursue private funding "in the very unlikely event" that sufficient money was not raised publicly.

Under the Premier Bionics IPO, which is fully underwritten by Peregrine Corporate, the company is offering 15 million ordinary shares at 20 cents each. Investors will receive two free options for every three ordinary shares purchased, with the company estimating a post-float market capitalisation of $4.3 million.

According to its prospectus, the company plans to use $1.25 million - almost 42 per cent - of the funds raised to meet the its funding promise to Pulmosonix. A further $300,000 will be used for management and administration costs, $325,000 to cover the cost of the issue and the remaining $1.125 million for the provision of working capital and new investments.

Soust said the company had already raised a little over a quarter of the total Pulmosonix investment of $1.25 million through seed capital comprising $93,000 cash and $220,000 in non-current financial assets.

Soust said the company had been advised that a public float would be the best route to finance its planned projects.

"From our point of view, we believe that we can attract investors with a float like this and continue to keep them on board or attract additional investors," he said.

Soust said the company's management represented a mix of financial, medical and diagnostics experience, himself having researched newborn respiratory system and cardiovascular disorders at Monash before setting up his own biomedical science management consultancy and helping to establish companies including Pulmosonix.

Other management figures include chairman Peter Marks, who has a venture capital background, and non-executive directors Dr Henry Pinksier, Dr Derrick Beech and Jeremy Cooper.

Soust said that while the company was actively looking for fresh deals, it had not formally spoken with any parties.

He also refused to be drawn on the company's timeline for new investments saying, "we don't want to pin ourselves down to anything at this stage".

The offering opens on May 2 and is intended to close on May 17 with a stock exchange listing pegged for May 29.