Pharma Zen float proves a success

By Chris Hutching

Friday 30th November 2001

Another biotech float from three Dunedin businessmen has proved a winner, with investors oversubscribing for the $8 million share issue by about six times.

The reputation of the principals has become a winning combination - evidenced by recent capital raisings they have been involved in which have been heavily over-subscribed

The new company is called Pharma Zen and its directors are Dr Cheung-Tak Hung, Dr Maxwell Shepherd and Howard Paterson, who have been involved in recent floats of Blis Technologies and Botry-Zen.

The level of oversubscriptions would have been bigger but the promoters chose not to advertise as widely as for previous floats because of the administrative difficulties in dealing with the flood of applications and consequent scaling.

The issue opened on November 22 and closed yesterday. After scaling it is expected investors will receive approximately 12% of the shares they subscribed for.

The company plans to use the $8 million raised by the issue of 80 million shares at 10c each to purchase the rights to its initial products, develop its manufacturing facilities, pursue overseas marketing, develop additional products, add value to b-products and expand the business through strategic acquisitions and partnerships. About $2.3 million of the money will be used to buy the rights for various products from ZenTech.

Director Dr Cheung-Tak said the company was based on two principles - the successful development of animal remedies based on New Zealand's long history of agricultural research and innovation and the development of animal byproducts for use in products for animal and human consumption.

Pharma Zen has been formed to commercialise a range of biotechnology products that strengthen animal and human immune systems.

"The company expects to be profitable during its first year of operations, with a net profit forecast in its first full financial year of $3.279 million before tax," the investment statement says.

The initial products are:

Scour-Zen, which can be used to prevent scouring in animals or to treat animals suffering from scours by boosting their immune systems, thereby making them less vulnerable to infections.
Colo-Zen, a supplement that helps protect lambs, calves, piglets, foals and fawns from infectious diseases.
Colo-Zen Plus, a complete colostrum replacement for foals that do not get enough antibodies from their mother. Colo-Zen Plus provides immunity against infectious disease until the foal's own immune system can protect it.
Colo-Equine, a food supplement that enhances horses' immune systems.
Immuno-Zen, an immuno -enhancing supplement for human consumption.
Glucan-Zen, a feed supplement that improves the health of salmon and their resistance to stress, toxins and infections.

Dr Cheung-Tak is an executive director of Zenith Technology and a director of recently floated Botry-Zen, which enjoyed a flood of share applications totaling $120 million for the $5 million float. He is a former senior lecturer in pharmaceuticals and pharmaceutical analysis at the University of Otago, and is a member of the pharmaceutical societies of Great Britain, Hong Kong and New Zealand.

Dr Shepherd is an executive director of Zenith Technology and a director of Blis Technologies. He is a former senior lecturer in the biochemistry department at the University of Otago and was the foundation professor in experimental oral biology. He is a fellow of the Royal Society of New Zealand and was awarded the New Zealand 1990 Commemoration Medal in recognition of his scientific services to New Zealand.

Mr Paterson is a Dunedin-based businessman with investments in agriculture, biotechnology and property. Significant investments in companies he founded and where he remains a director include Southern Capital, Mainland Poultry, New Zealand Deer Farms, A2 Corporation, Blis Technologies and Botry-Zen.

The company expects its unlisted shares to begin trading next Tuesday after the refund of oversubscriptions.

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