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Australasian Biotechnology (backfiles)
AusBiotech
ISSN: 1036-7128
Vol. 12, Num. 4, 2002, pp. 39

Australasian Biotechnology, Vol. 12, No. 4, Aug-Sept, 2002, pp. 39

DELOITTE REPORT

AUSTRALIAN BIOTECH COMPANIES LIST TOO EARLY

Code Number: au02023

Australian biotechnology companies list on average too early, according to a global benchmarking research report, Borderless Biotechnology, released by Deloitte Touche Tohmatsu during BI02002 in Toronto.

The report compares listed biotechnology companies in Canada, the USA, the UK and Australia. The benchmarking report reveals that listed Australian biotechnology companies are on average smaller than their global counterparts. Australian listed biotechnology companies are, by market capitalisation, on average 1/10th the size of their Canadian counterparts, 1/24th the size of San Diego counterparts and 1/42nd the size of their UK counterparts.

"Listing too early exposes growing companies to a number of additional challenges which they are often not equipped to handle," according to David Black, specialist in Life Sciences at Deloitte Touche Tohmatsu.

"Not only are the administrative burdens and compliance costs greater, the company is also lumbered with having to constantly manage stock market expectations."

"There are other avenues beside listing, for example private equity investment, that provide growing biotechnology companies with the necessary funding to grow without the same compliance costs," he says.

Survival strategies

"Overriding strategies that biotechnology companies should consider include using investors for more than just income, having a clear vision for bridging to the next round of finance, always being 'deal ready', having a clear idea of the most likely exits and opportunities for financiers, and protecting their intellectual property. "

Mr Black suggests that early stage Australian companies are best advised to seek other capital raising opportunities that can provide additional management support and advice.

The trend to create alliances has doubled since 1996, according to Mr Black, and managing these alliances is another major challenge to biotechnology companies around the globe.

Figure 1

About the report

The Deloitte Borderless Biotechnology Report is a global initiative of the Life Sciences practice of Deloitte Touche Tohmatsu. The report compares traits of the average biotech company in each country, comparing such figures as operating expense per employee, sales and administrative expense as a percentage of operation expenses, and research and development expense expressed as a percentage of operating expense.

A copy of the full Borderless Biotechnology report can be downloaded from www.deloitte.com.au or obtained by contacting dablack@deloitte.com.au

Copyright 2002 - AusBiotech


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