QBF was established by the Queensland Investment Corporation (QIC) in October 2002 as its venture capital arm specialising in biotechnology. Like any other QIC Fund, QBF’s purpose is to maximize investment returns for QIC’s clients. QBF does not provide grants or other forms of assistance.
The Fund invests in listed or unlisted companies which are commercializing Australian discoveries in drugs, devices or diagnostics. QBF is actively involved in its investee companies, typically holding a significant equity position for several years in the form of preference shares with specified rights.
Because biotechnology is a global business, Australian companies need to be able to compete globally. Therefore QBF looks for appropriate international relationships for each of its investee companies.
The five features which we value in companies are:
- Soundly based science
- Strong intellectual property
- A viable business plan, in terms of regulatory requirements, reimbursement and market access
- Management which has suitable experience to execute the business plan
- Multiple exit scenarios which generate returns commensurate with the company's risk level
High risk is inherent in the biotechnology industry - more than 80% of drugs entering clinical trials fail. QBF expects that several of its investee companies will fail and be written off, but high returns from successful investees should generate a fund return of at least 20%.
QBF values its portfolio of companies each year in accordance with AVCAL guidelines. The fund's total return will not be known accurately until the last investment is sold at the end of the fund's ten-year life.