Origin Capital's $6.5 million biotech play

Origin Capital, an unlisted pooled development fund set up by TSL Group's Ross Dobinson and Michael Naphtali, has raised AUD$6.5 million in private equity for investment into three biotech ventures.

The PDF is the third set up by Dobinson, who was also involved in establishing nanotech company Starpharma and drug delivery company Acrux.

Dobinson said that while it was never easy raising money, good quality projects would always attract capital.

"It's far more simple to raise dedicated funds for specific purposes," he said.

The fund has invested $2 million each into PharmaQest, which is developing a skin cancer-preventative, and medical devices company Micronix, which has developed technology for placing catheters with applications in enteric feeding and cardiac catheters. Origin is also in negotiations to invest $2 million in Diagnotech, a spin off from the Prince Henry Institute of Medical Research developing methods for early diagnosis of uterine cancer. Completion of this deal will depend upon resolution of the development pathway for the product, Dobinson said.

Micronix is probably the most advanced of the three companies, with one application of its technology already licensed out to US-based VIASYS MedSystems, which is filing for regulatory approval for its use in enteric feeding systems. The company's patented Cathlocator system uses a removable transmitter in the catheter tip to visualise placement of the catheter.

The investment by Origin will be used to commercialise the application of the Cathlocator technology for placement of catheters in the heart. Clinical trials required for registration of the CathRite system are underway at the Royal Adelaide Hospital and the company is in discussions with several potential partners, including a European distributor and manufacturer of catheters, and a US-based ultrasound manufacturer interested in combining the technologies.

PharmaQest, which has spun out of the University of South Australia's Centre for Pharmaceutical Research, is expecting to start clinical trials for its first product, a topical preventative for non-melanoma skin cancer based on an existing, approved non-steroidal anti-inflammatory drug, within a couple of months, according to Dobinson. Since the compound is already approved as an oral therapeutic, the path to market is likely to be reasonably short, he said, and Phase III trial would be completed within four years.

In May, the company entered into an exclusivity period with Italian pharmaceutical R&D company Sigma-Tau Pharmaceuticals, with the intention of entering a commercialisation agreement for the development of the product. The partners plan to seek orphan drug status for the chemopreventative, which also may have applications in treating a hyperproliferative skin disorder.

PharmaQest also has a number of other products in development.