SPRINGHILL Management Ltd, the fund manager for Spring Hill Biotech Ventures Sdn Bhd, Malaysia's first venture capital company for the biotech and pharmaceutical sectors, plans to further explore opportunities in the United States, European Union and Asian markets.
Springhill Management chairman Dr Kim Tan said the recent success of Spring Hill Biotech Ventures' investee company, India-based Glenmark Laboratories Ltd, in its reverse takeover of Mumbai Stock Exchange-listed Tasc Pharmaceuticals Ltd, marked the first initial public offering (IPO) entry under its portfolio of investee companies.
“We hope to initiate more IPOs, perhaps two in Asia, two in Britain and one on the US' Nasdaq market over the next two years,” he said at a press briefing on Glenmark Labs' reverse takeover of Tasc in Kuala Lumpur yesterday.
Tan said Spring Hill Biotech Ventures invested in start-ups and under-valued, quoted biotech companies in the European Union and the US.
“We will have a balanced portfolio with a bias towards biotech manufacturers and late-stage companies,” he said, adding that a minimum 30% of the fund will be invested in Malaysia.
The four investors in Spring Hill Biotech Ventures are Khazanah Nasional Bhd, Great Eastern Life Assurance Bhd, PacificMas Fidelity Sdn Bhd (a wholly-owned subsidiary of PacificMas Bhd) and THG Capital Sdn Bhd (a wholly-owned subsidiary of TH Group Bhd).
“Apart from supporting new biotech or pharmaceutical companies in Malaysia, we invest in foreign companies which have the technologies and products that can be transferred to Malaysia under licence,” Tan added.
To date, Spring Hill Biotech Ventures has invested between US$15mil and US$16mil in nine local and foreign companies. Springhill Management meanwhile, manages a modest fund of about US$30mil.
Tan said Glenmark Labs was Spring Hill Biotech Ventures' largest investment so far at US$4.5mil.
“When we took up a 20.5% equity in Glenmark Labs in February last year, the company's valuation was about US$22mil,” he said adding that the reverse takeover had resulted in a combined entity now valued at about US$270mil.
Tan said the combined entity was set to become a fully integrated pharmaceutical company with two US and European certified plants and one formulation plant in India with production capacity of 250 million tablets per month.
For the year ended March 2005, the company's combined sales stood at US$50mil.
Tan said: “We expect this will likely increase significantly when the company further expands into the higher value markets in the US and EU.”
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