An Australian biotech start-up hoping to emulate the success of blood plasma giant CSL has secured a $37 million lifeline eight months after it was forced to suspend operations unable to repay mounting debts.

Staff at Aegros were stood down with pay in November when the company paused operations to search for funding. At the time, the company owed contractors and staff around $16 million. Development of a $65 million manufacturing facility expansion in Sydney has also been paused for a year.

Aegros investor Ray Nolan says a management overhaul will help put the company on the path to commercial success. 

But an investment syndicate led by property developer Ray Nolan, who first bought into Aegros almost two years ago, has tipped $20 million into the business. Another $17 million has been raised from clients of corporate adviser, STK Markets, and others.

A $15 million loan has also been secured against research and development cash rebates, and the company could borrow another $5 million against the proceeds of the government scheme in the next financial year.

Founded in 2017 by haematologist Hari Nair and biotech entrepreneur John Manusu, Aegros is attempting to commercialise a blood plasma fractionation technology called HaemaFrac which has been in development since the 1980s. It is designed to significantly boost the yield of immunoglobulin – used to treat a range of medical issues – from plasma.

But the business has struggled with a shortfall of cash. It was not sufficiently funded to complete the $65 million construction of its expanded Macquarie

Park facility and former staff have told The Australian Financial Review about missed payroll cycles dating back to 2021 and occurring frequently in the years since. Last year, it was subjected to several windingup actions by disgruntled creditors.

When Nolan bought into the business, he acquired the shares of an exiting shareholder for about half their then price.

The most recent investment in June, which should fund the completion of the manufacturing expansion and help the company stay afloat until it receives regulatory approvals for its treatment, was priced at $1 per share – a hefty discount on a April last year, when stock was $18 apiece.

“The wheels came off … we saw a unique opportunity to take what, I believe, is first-rate Australian technology, developed by a company that needs some help,” Nolan said.

“We recognised there were certain weaknesses in the company we had to address – one was lack of capital, commercial leadership and a clear strategy.

“My role here is not about the science. It has long demonstrated its underlying technology works and its product quality meets a very high standard… what the company needs now is not another scientific validation, it needs commercial direction, fiscal discipline and execution of our plan.”

“There’s a new leadership structure in place … there’s a new sheriff in town.” – Ray Nolan, property developer

As part of the funding deal, Nair and Manusu have resigned from day-today roles within the business, but are staying on as non-executive directors. Damian Thornton, head of Aegros’ therapeutics and engineering division, has been made acting chief executive, with the expectation he will shortly be appointed to the role permanently.

Staff returned to work on Monday, having received eight months of unpaid wages over the weekend, thanks to the fresh funding.

“We have a clear, focused plan … to take this to revenue [through] hyperimmunes,” Nolan said, adding that there was a “new sheriff in town” after the management overhaul.