Proteome Systems gears up for September float

Sydney-based proteomics pioneer Proteome Systems lodged a long-awaited prospectus for its initial public offering on the ASX with the Australian Securities and Investment Commission today.

Proteome is one of the most mature biotech companies in Australia to have made a bid for IPO -- it already has a well-established instrument manufacturing facility, and a pipeline of novel diagnostics and promising drug-discovery targets. Today it revealed it had sales of $14.3 million in 2002-03, and $5.2 million in 2003-04.

In an offer fully underwritten by Patersons Securities, Proteome will issue 16.7 million new shares at AUD$1.20 each, to raise $20 million -- well down on the $45 million it was originally seeking.

The IPO, which will open on August 24 and close on September 13, will bring the total number of shares on issue to 100 million, valuing the company at $120 million -- well short of the $300 million valuation it aspired to when Proteome announced plans to go public earlier this year.

The sweetener for investors is a free attaching option that entitles them to subscribe for another $1.20 share for every two new issued shares, exercisable before September 30 next year.

Proteome Systems’ new non-executive chairman, former Perpetual Trustees CEO Graham Bradley, described the launch as “very exciting”, particularly in view of the volatile market for biotech investment in Australia. “We’ve been able to get our issue to market on a fully underwritten basis, raising $20 million," he said.

Bradley said the funds would be fully used in the business, with no down-sell by the founders and initial investors. Proteome was anticipating good support not only from the existing investors but also from a wider group of investors, which may now include retail as well as institutional investors.

“We have some underwriting from number of retail broking firms, and we think we’ll appeal high net-worth investors who are prepared to have a portion of their investment in a highly prospective but more speculative style of opportunity," Bradley said. “We welcome having a wider investor base, because it will bring focus and discipline to the company and its management."

Bradley said about half the money would be used to further develop Proteome’s instrument business and its sales pipeline, which had grown “very well” over the past 6-9 months, with the release of a number of new product with good sales prospects.

The remainder would be used for Proteome’s discovery and diagnostics business. The company hoped to generate co-funding opportunities from its strong pipeline of novel diagnostic and biomarker prospects.

“The board believes Proteome is a leading player in the large and growing proteomics industry, the management team has a proven track record of performance and this is evidenced by strong partnerships and alliances with leading global players,” Bradley said.

Proteome has established international alliances and joint ventures with Japanese scientific instrument manufacturer Shimadzu and diversified company Itochu, and IT giant IBM. Shimadzu mass spectrometers and IBM computers are components of Proteome's fully integrated proteomics technology suite.