May 23, 2012

The Australian Financial Review

Entrepreneur skill query in biotech

US venture capital firm Advanced Technology Ventures says Australia is a good hunting ground for biotech start-ups but there’s uncertainty on whether the companies backing promising new technology have the entrepreneurial spirit to deliver commercial success.

ATV manages about $US1.5 billion with investments across information technology, clean-tech and healthcare sectors. It focuses on early stage investments.

ATV general partner Mike Carusi told The Australian Financial Review: “There is good science here. What is not clear to me yet is the entrepreneurial community here. I think the science is here, but is the team here to hand it off to run the company? That is what I’m considering.”

He said he was eyeing other start-ups. “There are some interesting investing opportunities here”.

Mr Carusi, who was featured on the 2011 Forbes Midas List of top technology investors and manages about $500 million across the life sciences and medical device sectors, was visiting from California for the Bell Potter Life Science conference in Sydney yesterday.

Mr Carusi was an initial investor and is now on the board of US-based GI Dynamics, which floated on the Australian Securities Exchange last year. The stock has traded below its issue price of $1.10, yesterday ending 2.5¢ lower at 88¢.

He stood by the medical device company, saying the technology was revolutionary and the group was able to commercialise its product, used to treat type 2 diabetes and obesity in Australia and Europe.

Mr Carusi said the regulatory process in the US was “very uncertain and not well defined” and had become expensive and arbitrary, causing companies to look outside the US.

“I have got five companies that have done their first trials in Australia,” He said hypertension therapy company Ardian, which was sold to Medtronic for $US800 million, conducted its first trials locally. GluMetrics and Neurovista were both conducting studies here.

John Granger, divisional director at Bell Potter, which has underwritten seven of the eight most recent large deals in the sector, said biotech was a major growth area.

“Since the last biotech boom was about 10 years ago, many companies are closer to commercialisation,” he said.

“They are far better managed and boards are deeper. Clearly the market is growing into the sector. There is some scepticism but you are now seeing deals with major partners like Teva with Mesoblast, QRX with Activis, and Ironwood with Bionomics.