Top 25 insights: venture capital

April 12, 2016

What do some of the Top 25 R&D spin-off company executives have to say about overcoming risk and attracting capital?

Top 25 insights: venture capital

All research and development (R&D) spin-offs have significant risk attached to their commercialisation, but some cannot overcome the negative perception of that risk to attract the necessary capital.

Here, nine of the Top 25 Science meets Business R&D spin-off companies explain what it was about their product or business strategy that inspired confidence in their investors that theirs would be a viable business venture. 


ACRUX DDS PTY LTD

“An excellent intellectual property position is a key starting point. This is in addition to having a proven concept or great technology. A quality team to back up project execution is paramount. Understanding and being able to explain where your commercialised projects will fit into a market segment in terms of the need they will meet is also important.”

Michael Kotsanis_intext

– Michael Kotsanis, Chief Executive Officer


SMARTCAP TECHNOLOGIES PTY LTD

SmartCap Technologies is a spinoff from CRCMining. CRCMining carries out industry directed research, which ensured that the research into fatigue management technologies was a high priority for the mining industry at the project’s inception.

In SmartCap’s case, the industry support was sufficiently high that Anglo American, one of the world’s largest mining companies, in conjunction with CRCMining, co-funded the development of the prototype commercial SmartCap products.

This ‘incubation’ of the SmartCap technology by a significant end user was extremely important to advancing from research into prototype products. 

The prototype products performed sufficiently well for SmartCap to be selected by two other large mining companies for large supply contracts for fatigue monitoring technology.

So the support of significant end users, along with the commercial contracts the company had in place at that time, provided potential investors with the confidence to invest in SmartCap Technologies.”

– Kevin Greenwood, Chief Operating Officer


PHARMAXIS LTD

Pharmaxis has been restructured following a regulatory setback for our lead product. Rebuilding investor confidence has been critical to our longer term success. To do this we focused on three things:

1. transparency – explaining the business model and being clear about the risks as well as the opportunity;

2. building in meaningful milestones which marked development steps that significantly reduced risk and provided opportunities to realise value;

3. hitting milestones and delivering realistic objectives.”

venture capital

– Gary J Phillips, Chief Executive Officer


ADMEDUS

“I think there are a number of reasons investors are drawn to our business: Admedus has two technology platforms which diversifies the risk for investors; we have a product on market; and we are generating revenue.

The first of the two platforms is our regenerative tissue platform, where we use our proprietary ADAPT tissue engineering process to turn xenograft tissue into collagen bio-scaffolds for soft tissue repair. The second is our Immunotherapies platform, where we work with renowned scientist Professor Ian Frazer and his team to develop therapeutic vaccines for the treatment and prevention of infectious diseases and cancers.

Our lead regenerative tissue product CardioCel, which is used to repair and reconstruct congenital heart deformities and more complex heart defects, has made the journey from prototype to commercial product and is on the market in the USA, Europe and parts of Asia.

Frazer’s previous success with the human papillomavirus vaccine (HPV) program that lead to the USD$2 billion product, Gardasil, is well-recognised and gives investors further confidence in our immunotherapy work.

As a result, Admedus has a good balance of validated science via approved products and an exciting product pipeline working with successful scientists. This balance, along with our diversified program portfolio, gives investors confidence in our business. “

venture capital

– Dr Julian Chick, Chief Operating Officer


REDFLOW

“1. Marketing Potential

2. Uniqueness of the product

3. Difficult to replicate”

Stuart Smith_intext

– Stuart Smith, Chief Executive Officer


CATAPULT GROUP INTERNATIONAL LTD

Catapult‘s initial funding came from the Australian Institute of Sport (AIS), the birthplace of the project that led to the commercialisation of Catapult, and the Australian government

Because the technology was engineered to take elite athlete monitoring from the laboratory to the field, value was seen in the data immediately as there was no precedent for this type of information. A new product category had been formed and Australian Olympians were now able to train in their performance sweet spot without getting injured because their coaches had objective data to guide their lead up to big events.

So this combination of pioneering a new industry in a popular space (elite sport), with the ability to create immediate value, certainly helped with the initial funding.”

Shaun_intext

– Shaun Holthouse, Chief Executive Officer


SPINIFEX PHARAMCEUTICALS PTY LTD

“Neuropathic pain is a large unmet medical need because the currently available drug treatments either lack efficacy and/or have dose-limiting side-effects.

Due to this, my patent-protected angiotensin II type 2 (AT2) receptor antagonist technology – encompassing a potentially first-in-class novel analgesic for the treatment of often intractable neuropathic pain conditions – attracted initial seed capital investment from the Symbiosis Group, GBS Ventures and Uniseed Pty Ltd. In total $3.25M was raised and in mid-2005 the spin-out company, Spinifex Pharmaceuticals was formed by UniQuest Pty Ltd, the main commercialisation company of The University of Queensland.

The raison d’etre for Spinifex Pharmaceuticals at that time was to develop AT2 receptor antagonists as efficacious, well-tolerated first-in-class novel analgesics for relief of neuropathic pain. 

In 2006, I discovered that AT2 receptor antagonists also alleviated chronic inflammatory pain in a rat model. This was quite unexpected as clinically available drug treatments for neuropathic pain, such as tricyclic antidepressants and newer work-alikes as well as gabapentin and pregabalin, do not alleviate chronic inflammatory pain conditions such as osteoarthritis. Thus the potential for small molecule AT2 receptor antagonists to alleviate chronic inflammatory pain conditions was patent protected by UniQuest Pty Ltd in 2006 and subsequently in-licensed to Spinifex Pharmaceuticals for commercialisation. 

As both neuropathic pain and chronic inflammatory pain are large unmet medical needs, Spinifex Pharmaceuticals was able to raise additional venture capital from the initial investors as well as from Brandon Capital to fund Investigational New Drug (IND)-enabling Good Laboratory Practice (GLP) toxicology and safety pharmacology studies, as well as early phase human clinical trials. “

– Professor Maree Smith, Executive Director of the Centre for Integrated Preclinical Drug Development and Head of the Pain Research Group at The University of Queensland


iCETANA

“A different technique or approach to tackling a large and growing global market opportunity.”

– Gary Pennefather, Chief Executive Officer


ENGENEIC LTD

“Investors understood that the intellectual property would be generated in-house and there was no “stacking” from the beginning.

We were fortunate at the outset to meet two venture capitalists and a number of high net worth individuals who saw the potential upside in our business plan, had already had some success with investing in biotech – e.g. Biota – and did not ask ‘who else is in?’.  

That being said, we had very limited time and money to show proof of concept, and only after that and our first patent, did we convince those investors that we had something viable.”

HimanshuandJennifer_intext

– Dr Jennifer Macdiarmid, pictured above with Dr. Himanshu Brahmbhatt, joint Chief Executive Officers and Directors 


Click here to see the full list of Top 25 Science meets Business R&D spin-off companies.

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10 thoughts on “Leading sustainable design”

    1. Thanks Jeff! We’re going to publish interviews with the leaders of some of the top 25 companies over the course of the week – keep an eye out!

      1. Love to see @buildingiq on this list!! Csiro spin out in 2009, now global award winning player and backed several times by Ausindustry $; listed ASX in dec 2015

        1. Thanks Michael. BuildingiQ does look like a great service for optimising commercial energy use. A number of great contenders certainly made the judges’ job difficult.

  1. Wow some impressive Coys — Would have thought AJX (ASX listed ) and a new kid on the block EDE who both have proven technologies (AJX USA Defence chosen) (EDE huge concrete potential) may have made your list — Thanks… for reading my post. I have no idea on your selection critera BARRY

    1. Thanks Barry. Both those companies look like they’re working on environmentally friendly solutions. The panel of judges considered the following criteria: total market value, annual turnover, patents awarded and cited, funding and investment, growth year-on-year, social value, overseas expansion and major partnerships.

  2. I’m not sure I read the article properly as I suffer from presbyopia – anyone doing anything about this condition?

  3. I’ve been curious about the different uses of contact lenses. I think it’s so interesting that they are developing smart contact lenses! I love the idea of technology like this. I can’t wait to see how it progresses! Thanks for sharing!

    1. Thanks for the great comment Braden! We can’t wait to see the future of this awesome technology too. Did you see some of the weird and wonderful tech in sciencemeetsbusiness.com.au/big-data-big-business/? Umbrella rain sensors, pigeon pollution monitoring. Keep in touch! SMB

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