Tissue Therapies, after Europe setback, pleads for 2nd chance and $15m

TISSUE Therapies has chalked up losses of $50m. Here’s why the Qld firm seeks ‘2nd chance’ and $15m to get wound-healing tech back on track.

Biotech is a high-risk industry, but can have high rewards.

TISSUE Therapies has asked investors for a “second chance” — and $15 million — after a fizzled attempt to get its wound healing technology on to the market.

“It was a process failure, not a product failure,” chairwoman Cherrell Hirst told investors at Tissue’s annual general meeting in Brisbane on Wednesday, attended by more than 40 people.

Tissue has developed a product that is squirted on and designed to help heal wounds such as diabetic leg ulcers. It has accumulated losses of $52.6 million and failed in an attempt to get the product onto Europe’s market as a device.

The AGM marked a change in tack from Tissue having typically blamed mixed messages from European bureaucrats for failing to get its product through.

New chief executive officer Nigel Johnson added on Wednesday that Tissue had at the time provided a clinical database about the product that was “too small”. Had the company undertaken more trials, “we probably wouldn’t be sitting here” saying the attempt had failed, he said.

US AND PHARMACEUTICAL TARGET

The biotechnology sector is notoriously speculative, with recent local disappointments including a failed cancer treatment for Alchemia.

Tissue is now developing its product as a pharmaceutical, which has different hurdles to a device.

It is looking to raise $15 million from investors to help fund middle-stage trials and focusing on the US market.

Executive director Christian Behrenbruch argued the new process was more extensive but, if successful, offered bigger value.

Investors were fairly upbeat despite a hard year. Proposals for non-executive directors to get half their pay in stock options rather than cash drew a roughly 8 per cent protest vote from proxy shareholders.

One shareholder quizzed whether the strike price of 11c was too low given a five-year expiry date, although another said he supported directors having “skin in the game”.

Tissue stock closed up 0.2c at 4.8c. It listed in 2004 and shares hit 84c that year.

The new capital raising structure has yet to be announced. Analysts at Bioshares last month calculated Australian-listed biotechnology companies had raised $120 million in 2015’s third quarter, down on the second quarter’s $144 million and the first quarter’s $237 million.

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