Bio-Gene Taps Investors to Develop Novel Insecticides
The company seeks to raise up to $7 million via an initial public offering with the majority of the funds used to develop its lead product, Flavocide.
Technology has always been a part of Australia’s agriculture industry, but I believe the sector is not adapting fast enough to technological progress. The result is an unsustainable industry that is not operating as efficient as it could be.
Technological innovation in the agriculture sector will be a key focus for many investors globally, with recent studies indicating that the industry is set to boom. Agricultural technology – also referred to as AgriTech or AgTech – can help an industry, which is often limited by land and resources, to increase productivity and to operate more efficiently. Technology may include data capturing sensors, analytics, biotechnology or novel farming systems.
The coming IPO of Bio-Gene Technology Limited offers investors the opportunity to invest in an early-stage “AgriTech” company, focused on the development of novel insecticides to address global problems of toxicity and insecticide resistance.
Research published in the prospectus indicates that many insects have developed resistance against common insecticides, and therefore impact crop yields or increasingly spread insect-borne diseases such as malaria or zika. Bio-Gene’s aim is to develop new insecticides to address this problem.
The company seeks to raise up to $7 million via an initial public offering with the majority of the funds used to develop its lead product, Flavocide, a chemically synthesised compound with potential to overcome existing insecticide resistance.
The funds will allow the company to progress with registration enabling studies and field trials. It will take several years and a number of studies to take the product to market, but a successful outcome of these trial and on-boarding of partners will be a major validation of the product.
Risks are elevated for this early-stage company and the commercial merit of Bio-Gene’s IP has yet to be demonstrated. IPO investors are required to have a long-term speculative appetite as the company’s products will need to find acceptance in a competitive market.
Bio-Gene Technology Limited
ASX Code: BGT
Shares on Offer: 35m
Listing Price: $0.20
Market Capitalisation: $25.2m
Listing Date: 30 November
Author: Simon Herrmann
Nov 22, 2017
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.