Sydney investor grabs a $3m stake in Melbourne

A Sydney investment fund has moved to grab a stake in Melbourne bioscience commercialisation group Biocomm Services, cementing its exposure to emerging Victorian biotechnology firms.

BioTech Capital announced it had entered an agreement to invest up to $3 million in the company, subject to approval by the Victorian government and research institute members.

The fund is one of a number of investment groups planning to acquire a share of the company, with the total amount raised expected to be in the order of $10 to $15 million. Biocomm Services was set up in January 2001 with a service contract from the state government's Technology Commercialisation Program.

Senior researchers from Monash University, Baker Medical Research Institute and RMIT University initiated the idea of a company focused on business development and commercialisation of the life sciences.

In addition to these institutions, Biocomm's membership base now includes Prince Henry's Institute of Medical Research, Victorian College of Pharmacy, Peter MacCallum Cancer Institute, Mental Health Research Institute, Macfarlane Burnet Centre, Murdoch Children's Research Institute, Neurosciences Victoria, St Vincent's Institute of Medical Research and the Austin Research Institute.

BioTech Capital managing director Harry Karelis said the deal would hopefully not only bring investor returns, but would also expose the fund to newcomers on the biotech scene.

"It's an interesting model and is the first of its type that will actively look for intellectual property to license or turn into companies," he said.

"Also, Victoria is the centre of the universe for biotech companies and Biocomm's membership comprises a leading research base."

As part of the investment the fund is to be issued with 300,000 five-year options exercisable at the current subscription price of $1 per option.

Karelis said the deal, once finalised, would take BioTech Capital's total invested funds to $19.3 million across six companies including Proteome Systems, Xenome, Alchemia, X-Ray Technologies and Pacific Knowledge Systems.