Queensland Life Sciences Industry Report 2012 (PDF, 3.5MB)

10.2 Finance
10.2.1 Debt and Equity Finance Raised in 2011
In the current survey, 14% of companies (11 respondents out of 78)
raised debt or equity capital during 2011. Nine companies (11%)
were willing to report on the amount raised, which totalled $70.5
million (Figure 30). In the 2009 survey, 23 respondents out of 72
raised $85.6 million.
Figure 30: Debt and equity finance raised in 2011 (9 respondents)
Existing shareholders contributed the majority of total funds
raised by companies in 2011 ($48.5 million, or 68.8%) at an
average of $5.39 million per company. ‘Other private equity’ was
also a significant source of finance (19.9%). Venture capital (VC)
accounted for only $2 million of reported financing (2.9% of the
total) in 2011 compared to $42.9 million (50% of the total) in 2009
(Table 57). There was also a much higher amount of debt reported
in 2009 ($27.5 million from seven companies) compared to
$300,000 from three companies in 2011.
10.2.2 Strategies for Raising Finance
Approximately 37% of company respondents (29 of 78 respondents)
intended to raise finance in the coming two years. Private equity,
debt and VC funding were the top three financing mechanisms
reported in both the 2009 and 2011 surveys.
27 respondents nominated a range of government assistance
programs that they would seek to access as part of their financing
strategy. The R&D Tax Concession/Incentive, Commercialisation
Australia and Innovation Investment Funds were the three most
cited programs (Figure 31).
95 Australian Financial Review, ‘Float review: no survivors’, 28 December 2011
96 PwC BioForum Publication Edition 36, Quarter 4 FY11, August 2011
TABLE 57: Funds raised through debt and equity finance
(24 respondents)
Source of
Funds
Amount raised
(proportion
of total)
2011 (‘000) 2009 (‘000)
Average
per
company
Amount raised
(proportion
of total)
Average
per
company
Debt $300 (0.4%) $30 $27,500 (32%) $3900
Venture
Capital
Angel
investment
Existing
shareholders
$2000 (2.9%) $220 $42,900 (50%) $7100
$700 (1.0%) $70 $2400 (3%) $600
$48,500 (68.8%) $5390
Other Private
Equity
$14,000 (19.9%) $1560
$12,900 (15%) $2200
Other $5000 (7.1%) $560
TOTAL $70,500 $85,600
Figure 31: Government assistance programs that respondents
may access (27 respondents)
10.2.3 Innovation Funding in Australia
At the time the QLS Industry Report for 2009 was prepared, the
GFC had begun to negatively affect the availability of capital,
probably due to the perception that the likelihood of achieving
a successful IPO or trade sale was greatly reduced. This sentiment
seems to be continuing to affect the Life Sciences Industry, with
capital raised through IPOs in Australia in 2011 being the lowest
in more than a decade. 95 There were only two Life Sciences IPOs
in FY2010, C-Bio Ltd and the US company, Reva Medical
(Figure 32). 96 The two Life Sciences IPOs on the ASX in FY2011,
65