We'll float when we're ready, says PSL chief

Sydney-based company Proteome Systems Limited (PSL) has participated in a new round of capital raising as speculation mounts about the timing of the company's public float.

But unlike many biotechnology companies, PSL has steadfastly refused to go public until it can stand up and be seen as a key player by institutional investors.

"We don't want to be a small capital stock - we want to list as a significant business," said the company's CEO, Dr Keith Williams. "It's going to be CSL, then PSL.

"Within 12 months, we're hoping we'll be looking quite strong and on track for an IPO."

Since it was established in 1999, PSL has already raised huge capital - over $35 million.

"Most biotechnology companies in Australia would have listed on the ASX after raising this type of capital," Williams said. PSL is looking to raise $20 million in the medium term before an IPO, and this week the company raised $7 million dollars by encouraging outside holders in the company to exercise early their first-round options in Biotech Capital Ltd (ASX: BTC), for a discounted price.

Biotech Capital director Harry Karelis yesterday issued a statement announcing that the company had exercised options over 250,000 shares in PSL at a price of $9.50 per option.

"One of the US shareholders suggested to Proteome Systems that they should exercise the options early to raise capital, so Keith could focus on growing his business companies and closing some very big deals, instead of being distracted by raising capital - which could take months," Karelis said. "It's a win-win situation. Keith gets to grow his business and we get options discounted from $10.63 to $9.50.'

PSL's chief financial officer, George Favotto, said the company had approached all the shareholders with same offer. Queensland Investment Corporation, a Queensland government superannuation fund with a 5.1 per cent holding in the company, and Biotech Capital with 2.57 per cent sold all their options. There are another fifty smaller shareholders, not all of whom took up the option.

"We're looking to do something substantial and we'll do that when our revenues allow it," Williams said.

PSL is establishing its product lines so there is real cash coming into the business and it is earning substantial revenue, according to Williams. "Our blockbuster product, Xcise, sold by Shimadzu and worth US$250,000, is about to roll," he said. "It's a proteomic instrument that we are using ourselves to drive our tuberculosis and ovarian cancer research projects."

"Sigma and Millipore products are already bringing in revenue for PSL. Informatics platform instruments developed with IBM, electrophoresis boxes, and consumables going out from our Boston office will all be bringing in revenue soon."

Karelis said Biotech Capital's shareholders would further benefit from PSL's plan.

"When PSL finally lists on the stock market, there is likely to be a huge demand, and Biotech Capital shareholders will have priority with PSL shares reserved for them," he said. "For now, we are the only access the public has into a company that's growing rapidly."