Start-up Australia played a key role in creating EvoGenix and then transforming it from a private research based company with no employees and valued at $1 million, to a listed clinical stage company with approximately 70 employees. A subsequent Cephalon Inc takeover valued the company at $318 million.
EvoGenix Limited was formed by Start-up Australia in August 2001 to commercialise technology developed by the CSIRO and the Cooperative Research Centre for Diagnostics. The technology (later named EvoGene™) is a powerful method of improving the properties of proteins, particularly antibodies. The investment proposition was that the genomics and proteomics revolution would produce an explosion of therapeutic targets appropriate for antibodies. Start-up Australia developed the initial business strategy and investment case, created a corporate structure to implement the strategy and provided ongoing strategic and business systems support.
EvoGenix made rapid progress in developing its antibody optimisation technology into a commercially robust platform for improving the properties of high value therapeutic antibodies. Start-up Australia made a series of investments totalling $5.6 million and Biofusion Capital invested $1.2 million.
In April 2005, EvoGenix acquired Absalus, Inc. Absalus was a private Californian company with an antibody humanisation technology. Research antibodies are usually from mice and need to be modified ("humanised") for use as therapeutic drugs. This process is heavily protected by patent barriers and the Absalus technology provided a superior method of humanisation which is clear of patent barriers. This acquisition enabled EvoGenix to create an integrated suite of technologies to humanise and optimise antibodies and was a crucial step in becoming a significant player in therapeutic antibodies.
EvoGenix successfully completed an initial public offering on the ASX in August 2005 at a price of $0.25. At the IPO $9 million was raised followed by $6 million in a secondary capital raising.
EvoGenix then merged with ASX listed Arana Therapeutics Limited in August 2007. The value of this merger to EvoGenix shareholders was a cash and scrip offer at a value per EvoGenix share of $0.77. Start-up Australia was the largest shareholder in EvoGenix prior to the merger and the largest shareholder in Arana Therapeutics immediately following the merger.
Start-up Australia sold most of its shares in Arana Therapeutics to Cephalon, a US based pharmaceutical company, at $1.40 per share in February 2009, immediately prior to Cephalon mounting an off market takeover offer for all the shares in Arana Therapeutics. Cephalon then announced an off market takeover bid for Arana Therapeutics later that month at the same initial price of $1.40 plus a further $0.05 was to be paid once 90% acceptances were received. This represented a 75% premium to the 90 day average share price before the offer. We sold our remaining shares into the takeover offer. Cephalon announced in June 2009 the close of the offer and that it had acquired 93.99% of the shares in Arana Therapeutics and had moved to compulsory acquisition of the remaining shares.
Start-up Australia invested $5.6 million in a series of tranches in EvoGenix. Cash returned to our investment funds from the investment was $6.36 million from the merger of EvoGenix with Arana Therapeutics and $30.17 million from the acquisition of Arana Therapeutics by Cephalon.