PlasVacc to raise $5m for US purchase

Public unlisted animal plasma company PlasVacc has filed a prospectus with Asic to raise AUD$4.75 million to fund its planned acquisition of Californian equine plasma company Veterinary Dynamics (VDI).

According to CEO and cofounder CEO Andrew Macarthur, the prospectus marks the first round of capital raising ever done by the company. Unlike most biotech companies, PlasVacc is a cash-flow positive business with a growth of 30 per cent over the last four years, and the capital raising marks a move by the company to expand into new markets beyond Australia.

"We are offering investors the opportunity to become owners of a business that currently services approximately 3,000 customers throughout Australia, New Zealand, the US and Canada; is investing in the development of additional products - in particular for cattle - and is also progressing plans to enter the rich European markets," said Macarthur. "The purchase of VDI is the first step in expanding PlasVacc's operations. Given our very promising ongoing R&D, the development of further products and markets to service represents an opportunity for PlasVacc to expand its business to many times its existing size."

Macarthur said the purchase was synergistic, with the two companies collaborating since 1996, and VDI founder Derek Brook will remain a consultant to the merged companies.

The Queensland-based company has a growing suite of plasma products in Australia including licensed products for horses, dogs and camels, and plans to expand into the lucrative US market via VDI's existing distribution network of more than 2500 veterinarians in the US and Canada.

PlasVacc is currently commercialising a bovine plasma product, Boviplas, and once registration has been achieved in Australia PlasVacc will seek US registration through the USDA. US and eventually European registration will also be sought for its Caniplas and Equiplas products.

It is also working with CSL to provide equine plasma for use in snake anti-venom products for animal and human use.

While the capital raising is not linked to a float on the Australian Stock Exchange, Macarthur did not rule out that likelihood in the future, noting that more capital would be needed to fund additional development and expansion.

"We will assess all strategies that will maximise our shareholders' value in the future. We're not going to be listing now -- we need to grow the business more before we do that," he said.

4.75 million shares are being offered to investors at an issue price of $1.00. The offer closes on September 23, 2004.