IT WAS one of the floats that was meant to herald the end of the financial gloom, but CBio plunged into darkness after hitting Australian Securities Exchange boards for the first time.
Investors who sank their hard-earned cash into CBio, which is developing a drug therapy called XToll to treat rheumatoid arthritis, watched their $1 shares plunge to just 39.5¢ apiece by the close of trade.
Those more favoured investors who managed to buy in during August's discounted $13 million pre-float capital raising at 50¢ a share also saw a large chunk of their initial investment wiped out on day one.
The listing of CBio - the first float of a biotechnology company in Australia in almost two years - made a splash in the news in October.
Underwriter Novus Capital said it hoped to raise $35 million from the float, but that figure proved fanciful. It was revised to $13 million, then to $7 million, and only just scraped home at the last figure. All up, $7.1 million was raised at a dollar a share at the initial public offering.
That money was slated to fund a ''150-patient phase IIa clinical trial in rheumatoid arthritis'', but over Christmas the company lodged a rewritten prospectus, in which it admitted that it didn't expect to raise enough cash to complete second-round trials.
It will be interesting to see just how far all that investor money stretches, because it won't just be the promised development of Xtoll that will take a toll on company coffers. CBio spent $7.3 million on research costs last year, and racked up a $5 million administration bill, including salaries, in doing so.
CBio might be a minnow of the ASX, but its directors swim with much bigger fish when it comes to their own pay packets. According to the prospectus, the company's directors earned $1.8 million last financial year, down from $2.6 million the year before.
Executive chairman Stephen Jones received $399,000 in salary and fees, while chief executive Jason Yeates' total remuneration was $627,884, including a $300,000 base salary.
Chief financial officer James Greig received total remuneration of $527,000 in 2009, including a $220,000 base salary.
To put that in perspective, Damian Lismore, the CFO of highly profitable Biota, a $330 million giant that makes the Relenza anti-viral drug, earned $429,000 last year.
Lismore's obviously working in the wrong end of the market.
Collins & Spencer also notes that the cost of the capital raising came in at $974,926, so almost 14 per cent of money received won't even make it to CBio's coffers.
And the biotech industry wonders why potential investors can be so shy?
Media unquestioned
IT'S a bold declaration from Virgin Blue, and one in keeping with the gimmick-riddled business philosophy of its founder, Richard Branson.
''Tell it like it is and win,'' states an email to passengers who fly with the no-frills airline this month.
It's followed by an invitation to fill in an online survey about your ''flight experience'', for the chance to win $500.
Question one is about your job and, if you happen to work as a journalist, or in the media, that's where the survey ends. ''Unfortunately we are currently surveying guests with slightly different characteristics for this particular survey,'' journos are told.
Seems they don't want to hear it too much like it is.
BlueScope stimulated
STIMULUS packages around the globe are having some unusual benefits for Australian manufacturers. Just ask BlueScope Steel chief executive Paul O'Malley.
Speaking at the December-half profit call, he told analysts that BlueScope was doing well in the US thanks to stimulus spending. He said the spending had picked up the slack from BlueScope's private-sector customer base, which is still struggling from tight credit conditions.
O'Malley then offered an example of how BlueScope is benefiting from the US government.
''We have been in Alaska building hangars for F-22 fighters. And we can build these hangars - I'll make this up - almost three times as quick as the Corp of Engineers.
''So we are actually getting some commandants at US military bases looking at our production saying, 'It is lower cost, it's quicker and it's something we might buy more of'. So our marketing push at the moment is into the government sector of the US because there is no credit exposure - yet - there.''
