New biotechs head for the NSX

Having waved goodbye to its first biotech alumnus Living Cell Technologies (ASX:LCT) earlier this year, the Newcastle Stock Exchange is expecting a number of fresh biotech companies to list on the exchange this year.

According to NSX general manager Scott Evans, Adelaide's Vet Biotechnology will be the first. "[Vet biotechnology] has a small number of shareholders -- we only require 50 or more - the ASX is 400," he said. "They are only raising abut $300,0000. For them to get on to the ASX they have to raise $10 million."

"They are at also at the more speculative end of the biotech range," he said.

And is the NSX setting itself up as a springboard for companies with the ambition - but not the wherewithal - to list on the ASX?

"Graduating to the ASX will be a part of what the NSX will do," said Evans. "Part of our business model is that companies will go on to other capital markets as well."

"The total cost of capital, prospectus, and legals, is usually around $200,000. The ASX equivalent is $700,0000 or more," he said.

Stepping stone

General manager of Vet Biosciences, Hugo LeMessurier, said the NSX was a pragmatic, albeit short-term option.

"One [reason we've gone to the NSX] is to increase liquidity in the stock, the second is to provide a public forum for capital raising, and the third is to provide a stepping stone to the ASX," he said.

"It gives a new company a level of governance, it expands the shareholder base and gives it a sophistication which is a stepping stone for the ASX.

"It's not really a novel way of doing things, but it is a controlled way of going from seed capital into a listed entity on to the ASX."