Board upheaval, cash crisis at Virionyx

One of the showcase firms of local biotech, Virionyx, is in upheaval.

Not only have the old board, chief financial officer and auditor left the building, the Auckland company also disclosed a cash crisis at last Friday's annual meeting.

Incoming director Simon Wilkinson yesterday described the shake-up as none of the public's business - despite Virionyx raising more than $12 million in public offers in 2002 and 2003.

It is reported to have raised close to $30 million from investors.

Shareholders have agreed to the company seeking to raise up to $2 million more in a rights issue, so it can keep hunting for a cornerstone shareholder with deep pockets.

One shareholder, who did not want to be named, said: "I have a concern that people will put more money into the company and, in three to six months, it will be in the same position."

Virionyx is developing a drug, HRG214, for the treatment of HIV, and is also working on other drugs.

Chinese President Hu Jintao was hosted by Prime Minister Helen Clark at the company's laboratories last year to witness New Zealand's biotech capabilities.

The buzz in the business world is over the boardroom clean sweep that last month saw Gregory Moyle and Wilkinson installed as directors and Richard Locke as chairman.

Those who exited included chairman Peter Sullivan and directors Jon Lamb and Graham Brand.

Chief financial officer Rob Turnbull has resigned.

Auditor PricewaterhouseCoopers did not seek reappointment at the annual meeting.

Wilkinson said the changes were the business of the company and its shareholders - regardless of public profile and capital raisings.

Later, a public relations firm emailed a statement from Locke.

It did not tackle the Business Herald's questions.

Locke said a disagreement among shareholders over the next stage of fundraising had been resolved, with the necessary resolutions passed at the annual meeting.