Investors rush to buy into $8m deal

Dunedin's claim to be New Zealand's biotechnology capital is gaining strength as another fledgling takes wing for the Stock Exchange.

Animal remedies firm Pharma Zen plans to start trading on the unlisted board on Tuesday after its $8 million share offer - 80 million shares at 10c each - closed oversubscribed on Wednesday.

Investors are likely to receive 12 per cent of the shares applied for, with oversubscriptions refunded before trading begins.

The company, formed to commercialise biotechnology products to strengthen animal and human immune systems, was started by Zenith Technology (Zentech) directors Max Shepherd, Cheung-Tak Hung and Dunedin businessman Howard Paterson.

The three are credited with a string of biotech success stories, including Stock Exchange-listed Blis Technologies, secondary board company A2 Corp and Botry-Zen, which plans to move from the secondary market to the main board by the end of February.

Pharma Zen said in its investment statement that it expected to be profitable during its first year of operations, and forecast a pre-tax profit in its first full financial year of $3.28 million.

The $8 million from the share offer would be used to buy the rights to its initial products, develop manufacturing facilities and new products, pursue overseas marketing and finance expansion through strategic acquisitions and partnerships.

The six initial products include boosts for the immune systems of animals and humans, a way to prevent and treat animal scours, and colostrum supplements for animals.

Pharma Zen's directors will, between them, hold just under 50 per cent of the company.

Dr Hung said the investors were evenly spread between institutions, professional investors and the public.

The full potential of Pharma Zen could be realised only by exporting its products. Once this was happening and the company was running profitably, he hoped it would step up to the Stock Exchange's main board.

He attributed Dunedin's biotech success to the close relationship between investors and scientists.