australian government makes venture capital pot sweeter for biotech investments _ bioworld
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10/7/2016 Australian government makes venture capital pot sweeter for biotech investments | BioWorld
http://www.bioworld.com/content/australiangovernmentmakesventurecapitalpotsweeterbiotechinvestments 1/2
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Australian government makes venture capital potsweeter for biotech investments
By Tamra Sami
Staff Writer
PERTH, Australia – A venture capital fund has emerged in
Australia that allows new migrants to invest in early stage
biomedical companies in the country.
Life sciences investment firm Biosciences Managers will manage
the fund that is expected to invest A$50 million (US$38 million) in
early stage private Australian biomedical companies.
Chief Investment Officer Matt McNamara told BioWorld Today that the Bioscience Managers Ventures I
Fund is unique in that it is specifically designed for significant investor visa, or SIV, applicants.
For many years, the federal government allowed migrants to invest A$5 million in Australia over a fouryear
period in exchange for permanent residency in the country, he explained. Now, instead of putting money
into government bonds, the government expects 30 percent of those funds to be invested in emerging
products, with 10 percent going toward an approved venture capital (VC) group.
BT Investment Management, which runs the fund, has chosen Bioscience Managers as its exclusive
partner. That means that for every client that invests A$5 million, A$500,000 will go to the Bioscience
Managers Venture I Fund, McNamara said, noting that Biosciences Managers is the first life sciences
company to participate in such a fund.
The new fund is structured as a venture capital limited partnership and is a federal government initiative,
so it comes with certain tax advantages. Although indication and technologyagnostic, the fund will invest
in early stage companies that have generated preclinical data. He said that would include biopharma
companies as well as device or diagnostics companies and digital health companies.
"This new fund is a step change for earlierstage companies and sorely needed in Australia,'' said former
Ausbiotech CEO Anna Lavelle. "Together with laterstage venture funding we now have a smooth
continuum of capital access that will be of material benefit to many,'' she said.
BOOSTING HOMEGROWN INNOVATION
The new fund is Bioscience Manager's third fund, and McNamara said the company would adopt the same
strategy that has produced net returns above 20 percent for its previous funds.
The VC will take a handson approach with its portfolio companies, he said, helping them to develop their
management teams, adding regulatory and clinical trial expertise and introducing them to capital and
international networks.
Bioscience Manager's first fund was a 10year private equitystyle fund with A$41.8 million capital
invested. That fund returned A$56 million to its investors, with an internal rate of return of roughly 24.7
percent. Biopharma portfolio companies included Arana Therapeutics Ltd., Pharmaxis Ltd., Alchemia Pty
Ltd. and Bionomics Ltd., among others.
The VC's second fund is the Asia Pacific Healthcare Fund II, which is investing in the broader AsiaPacific
region. That fund invests in clinicalstage companies with a valuation point that is two to four years out.
Portfolio companies in that fund include Nexvet Biopharma, Avita Medical, Ampliphi Biosciences Corp. and
Adherium Ltd.
10/7/2016 Australian government makes venture capital pot sweeter for biotech investments | BioWorld
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McNamara said that over the last 20 years, Australia has lacked the executive expertise to run life
sciences companies and to reach commercial endpoints. Those government initiatives are designed to
"entice VCs like us to help build up and assist these companies."
A$250 FUND ACCEPTING APPLICATIONS
In separate news, Bioscience Managers said it has applied to participate as a fund manager for the federal
government's A$250 million Biomedical Translational Fund (BTF), which is run by Innovation Australia, a
new government agency tasked with boosting innovation in the country
The $250 million BTF fund came out of the Medical Research Future Fund, which is designed to grow to
$20 billion to cover the cost of increasing health care for Australians.
"The medical research sector has not been matched by translational excellence," Innovation Australia
Chairman Bill Ferris told BioWorld Today. He said that Australia punches above its weight when it comes
to medical research, but it "runs the risk of squandering this exceptional capability" by not being able to
attract and keep innovation in the country. (See BioWorld Today, Oct. 3, 2016.)
"The Biomedical translation fund is a bold initiative designed as a forprofit coinvestment pool of venture
capital targeting companies with projects that have shown proof of concept," Ferris said.
The fund will be run by a few private sector life sciences fund managers with dedicated life sciences
portfolios, he said. Successful BTF fund management applicants will need to privately raise funds that
match the government's initial A$250 million investment.
McNamara said Bioscience Manager had its first interview as a potential candidate in Canberra on Oct. 5.
He said the short list of fund managers will be announced this month, and the finalists will be announced in
December.
"There is no doubt the quality of science in Australia is first class," McNamara said, "and the intellectual
property is first class, but access to capital is still a struggle." He said new government initiatives are
going to go a long way toward helping to bridge that gap. "Things are looking up," he noted.
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