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Biochemical maker New Zealand Pharmaceuticals opened a new factory yesterday to tap into the market for cancer drugs and said it planned to float on the sharemarket within 15 months.
The $10 million facility in Palmerston North will make carbohydrate compounds for new drugs aimed at treating life-threatening conditions including cancer and heart disease.
NZ Pharmaceuticals is privately owned, with shareholders including Direct Capital, but said it was planning to make an initial public offering and list on the NZX.
Managing director Richard Garland said the listing would raise capital for potential expansion and create liquidity for existing shareholders.
No decision had been made on the timing of a float or how much would be raised.
Private equity funding was still an option but the preference was to use a listing to tap into a greater pool of money.
A listing in NZ held advantages over an overseas float, Garland said.
"We think that the New Zealand market will be more interested when they understand the cluster [of local operations] approach we're developing involving not just ourselves but IRL [Crown-owned Industrial Research Ltd] in particular.
"Certainly we're working towards that IPO and opening this new factory is a real milestone on the way to being able to provide the sort of growth that we will need to interest the investment community."
The company is forecasting exports of specialty carbohydrates to top $5 million this year, which could rise to $50 million within five to 10 years.
NZ Pharmaceuticals, which exports more than 99 per cent of production, employs 100 staff making biochemical ingredients for other pharmaceutical and biotechnology manufactures, with its main product used for making drugs that treat liver disorders.
The specialty carbohydrates to be produced at the new factory are a key ingredient in a new drug-delivery mechanism called glycotherapeutics, the company said.
"This investment opens new horizons for the company," said Garland.
"It gives us a toolset to manufacture a wide range of specialty carbohydrates on a significant scale and the means to become a key niche player in the global market."
Richard Furneaux, general manager at IRL division GlycoSyn, said the facility would enable large-scale production to international standards: "We can really open the doors to a wave of other opportunities."
