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Singapore-based Rockeby biomed liquidating subsidiaries
By Alicia Wong, TODAY | Posted: 10 December 2009 0619 hrs


SINGAPORE: When better tests for Influenza A were needed, this company snagged Spring Singapore grants to develop one. When there was a need for a rapid diagnostic test kit for hand, foot and mouth disease, the firm clinched a partnership with the National University of Singapore for the initiative.

Singapore-based Rockeby biomed also supplies the saliva-based HIV rapid test kits here, and had launched a fund to help families of HIV-infected people.

This is the track record of the Australian-listed biotechnology company that is now liquidating two of its subsidiaries and grappling with financial woes.

According to the company announcements in October on the Australian Stock Exchange (ASX), its subsidiaries - Rockeby biomed (Singapore), a trading company for medical products, and holding company Rockeby biomed Corporation - are being wound up as part of a restructuring. The aim is to provide "focus on the product lines" and to "better manage" its financial and business affairs.

These tasks will fall on a new management, which appears to have come on board in part as a result of Rockeby's financial troubles. Once the face for the company, former chief executive Tan Sze Wee resigned in July.

Its annual report revealed the firm lost, in total, more than A$5.75 million ($7.3 million) in the financial year ended June. It also owed shareholders A$583,042. The previous year, it lost over A$4.39 million.

"These (management) changes had caused instability in our small-sized company, but may have been inevitable given the continuing financial and business difficulties," said chairman Kow Hin Fan in the 2009 annual report, which alerted investors to the pending liquidations.

A notice published last Friday in the Government Gazette called for a meeting of creditors on Dec 24 over Rockeby Biomed (Singapore)'s application for creditors' voluntary liquidation. This occurs when a company's directors believe it cannot, by reason of its liabilities, continue its business.

In the same announcement on ASX, the company assured it would continue to "trade in the same products as previously". This means the Pepp pills, meant to prevent hangovers, and Rockeby's diagnostic tests will continue to be traded.

Indeed, MediaCorp checks with a few local clinics found they have had no problems with the supply of the HIV test kits.

"Rockeby Biomed is still pursuing all previously announced marketing, sales and growth plans," said managing director David Capes in the announcement.

This, Rockeby will have to do so as a private listed company, after shareholders voted last month to delist the firm at its annual general meeting.

"The challenge and focus for the company going forward is to recapitalise and then diligently work to execute its plans to grow the business around the diagnostics products and lifestyle health product Pepp," said Mr Kow in the annual report.

Management is now working to "re-establish" financing lines, "increase sales in established channels" and reach out to new markets, he added.

While the pharmaceuticals and drug manufacturing sector has done relatively well in recent years, regional economist Song Seng Wun noted the biotechnology industry is "very much hit and miss", and requires "very deep pockets to be able to stomach years of spending or researching" before hitting upon a product which will "reap the rewards".

"(This) is obviously an exciting sector; it's also a field which is quite weighted with casualties," he said. It is "not unusual" to see such developments in the biotechnology field.