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Zen merger seeks synergy

Chris Hutching

Friday 19th December 2003

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The merging of Dunedin biotechnology companies Botry-Zen and PharmaZen will improve liquidity for shareholders and offer savings in marketing overseas, chairman Max Shepherd says.

Scotching rumours of trouble at the fledgling firms, he said: "It's quite the opposite," he said. "PharmaZen has already produced a profit. Both companies are going extremely well but there are synergies we could exploit in administration and when one of our people is overseas, marketing, for example. They would represent a larger company, marketing several natural products."

When the Stock Exchange scrapped the secondary listing board recently, PharmaZen had to consider whether to list on the main board or on the alternative exchange, with all the attendant costs, he said.

A merger seemed the obvious answer.

Dr Shepherd, who is founding chairman of both companies, said investors in the biotechnology industry needed to be patient because of the time sometimes taken to obtain regulatory consents in other countries and earnings were often constrained initially.

Investors applauded the move and the Botry-Zen share price rose from 14c to 18.5c.

More information about the way the two companies would merge would probably be available early next year with the likely scenario being a takeover.

Botry-Zen makes a natural product that fights disease in horticultural while PharmaZen makes human and animal health products. They were set up by Howard Paterson, who died in June this year.

Other companies he established include Blis Technologies, which recently raised $3.1 million to market its immune-boosting throat products overseas but continued its long decline to 15c this week, and A2 Corporation, also marked down to 9c.

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond


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