ro ts stemmed by com­pe­ti­tion

Finweek English Edition - - Cover -

STEM CELL de­vel­op­ment com­pany Lazaron Tech­nolo­gies, which raised R7m from pub­lic in­vestors in 2005, was an un­listed ven­ture cap­i­tal project that caught the pub­lic’s imagination. While the po­ten­tial for this cut­ting-edge biotech­nol­ogy (the stor­ing of stem cells from new­born chil­dren in a bank for use later in treat­ment of dis­eases) could have trig­gered some am­bi­tious claims about po­ten­tial prof­its, Lazaron’s prospec­tus was fairly muted in fore­cast­ing rev­enue of R13m and net profit of R1,3m for the year to June 2006.

Lazaron’s sell­ing point cen­tred on com­mer­cial­is­ing stem cell tech­nol­ogy by of­fer­ing to col­lect and store stem cells for a one-off fee of R6 500 and stor­age cost of R120/year.

That seemed sim­ple enough, but Lazaron hasn’t (yet) lived up to ex­pec­ta­tions. The group’s an­nual re­port to end-June 2008 (yes, Lazaron is one of few un­listed ven­ture cap­i­tal com­pa­nies mak­ing an ef­fort to keep share­hold­ers up to date with fi­nan­cial in­for­ma­tion) showed a net loss of R416 000 from a muchre­duced turnover of R2,3m.

Lazaron’s bal­ance sheet is some­what brit­tle. There are tan­gi­ble as­sets of R2m but its cur­rent as­sets of R500 000 were dwarfed by cur­rent li­a­bil­i­ties of R800 000. How­ever, par­ent com­pany JDH has man­aged to se­cure R10m in new fund­ing and pre­sum­ably some of those funds raised will be used to shore up Lazaron.

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