New player Gateway aims to fill commercialisation gap

Perth-based biotech project management company Gateway Capital is about to step into the ring with venture capital players and investment banks, announcing today it will aim to fast-track biotech research from research institute to ASX.

According to the company, it will operate in the existing gap between venture capital funding and listing by taking on projects at the pre-seed and seed stages of development.

And Gateway is itself bound for an ASX listing, according to non-executive director Harry Karelis. Gateway will earn fees in the form of shares in the companies it advises, passing on this equity holding to its own shareholders. Or, as Karelis puts it "You will get shares in those spinouts for free."

"It probably has a model which is reasonably unique in Australia," said Karelis, who is better known for his role as managing director of Biotech Capital (ASX:BTC).

"The feedback we get is that VCs want to have their cake and eat it too. There is a lot of risk capital in the ASX -- much more so than other markets in the world. We've been trying to tap into that capital in a professional way."

Gateway was involved in the re-listing of former WA biotech Q-Vis (ASX:QVL) earlier this month. Q-Vis -- now reinvented as Salus Technologies -- will acquire 100 per cent of the issued capital of Kelpie Projects from Gateway Capital. In turn, Kelpie will acquire Mayne Pharma's interest in Providex Therapeutics, a CSIRO spin-off developing prostate cancer therapeutics.

"We recognised there was a need to procure development funding for early-stage biotechnology projects -- typically those still within research organisations. The prostate therapeutic is the first of a number of Gateway's projects to potentially reach the market," said Karelis.

"There are four deals in the pipeline working up to the termsheet stage in the areas of biomaterials, diagnostics and anti-microbials from all over the country."

He said Gateway was focusing on high-value growth markets: cancers, asthma, allergies, arthritis, diabetes, vascular diseases and Alzheimer's.

Gateway was conceived 18 months ago, and established formally around 3 months ago. It was founded by director Charles Morgan whose previous biotechnology development experience includes acquiring rights over the CSIRO technology that now forms the basis for Imugene (ASX:IMU).

British expat Dr Guy Heathers has joined the company as managing director and CEO after 7 years in drug discovery and 10 years in international biotechnology and venture capital industries. Clinical Cell Culture (ASX:CCE) chairman Dalton Gooding will double as chairman. Gooding is also a partner of Ernst & Young.

Another non-executive director will be Edward Tait -- former chairman of Macquarie Bank in Western Australia