ToxiTech investment the latest in Qld biotech funding spree

The funding floodgates suddenly appear to have swung open for young and not-so-young biotechs -- at least in Queensland.

The July 16 announcement of a AUD$125,000 investment in Townsville biotech ToxiTech by the state government-backed BioStart program is only the tip of the iceberg.

In the past month, investors have poured between $10 million and $11 million into five Queensland-based biotechs.

ToxiTech, a start-up based on research conducted by the Australian Institute for Marine Science and James Cook University, has developed what is claimed to be a world-first prototype test kit to identify paralytic shellfish poisoning toxins in water and seafood. It has appointed some high-profile individuals to its board, including Peptech chairman Mel Bridges, formerly CEO of diagnostic kit company PanBio, and is looking at a worldwide market for its diagnostic products.

ToxiTech was the second investment in as many months by BioStart, a $6 million pre-seed fund jointly backed by the Queensland government and venture capital company Start-Up Australia.

ToxiTech CEO Brett Kettle said the BioStart funding would greatly help the company accelerate the commercialisation of its research.

Other products in the company's pipeline include tests for other high-impact contaminants of seafood and drinking water, he said.

In June, the fund put $125,000 into Glykoz, a Gold Coast company developing a new class of antibiotics to fight infections caused by so-called 'superbugs' such as golden staph.

Until then, BioStart had not dispensed any funding for more than a year and overall had only one investee company in the form of Mimetica, a University of Queensland spin-off focused on drug design.

Last month was a high water mark for a variety of Queensland-based biotechs which had been hunting funds. The largest winner was another University of Queensland spin-off, Xenome, which received $6 million as the first investee company of the $100 million Queensland BioCapital Fund. Xenome is developing anti-pain drugs based on molecules found in tropical marine animals.

Since the QBF injection, Xenome has announced that University of California researchers have independently confirmed the effectiveness against severe pain in animals of its lead drug candidate Xen2174. The drug is based on the venom of a cone shell found on the Great Barrier Reef. It could prove attractive to cancer patients with chronic pain and is expected to go into human trials next year.

Other biotechs to have won investor support in June include drug design company Alchemia, which successfully capped a $2.75 million fund raising exercise, and anti-cancer drug developer Peplin Biotech which completed a $3.5 million placement.

Peplin CEO Garry Redlich said the bulk of the placement was made to institutional investors who now make up more than 10 per cent of the company's share register.

The company attracted a number of unsolicited offers from investors following a short roadshow, Redlich said.