MELBOURNE'S biotechnology leaders were looking at each other in a new light after listening to Matt McNamara.
The Intersuisse Bioscience Managers head told a group of chief executives yesterday they needed to get bigger to get noticed.
And the best way to do that was to buy another company or find other ways to break through the magic $100 million market capitalisation mark.
Matt said fewer than 30 of Australia's 130 listed biotechnology companies had crossed that mark, which put them on the radar of institutional investors.
"Size is important and if you are under that neat number, concentrate on trying to get over it."
Matt said the three best ways to add to a company's market capitalisation were to raise capital, grow organically or buy bolt-on businesses.
Some of the obstacles in the way of consolidation included weak and non-commercial boards, chief executives trying to protect their jobs, unrealistic valuations and pre-clinical technology.
While the Australian share market was less mature in valuing biotechnology than the US market, Matt said Australian biotechs were becoming well known for their good science and cheap valuations.
Which meant our companies were being noticed by large pharmaceutical companies that were shopping for breakthroughs further down the food chain.
Matt's advice for biotechs was to talk to big pharmaceutical companies as early as possible about things like the design of clinical trials.
"If you can save them repeating trials down the track it is a great idea - they are becoming much more consultative," he said.
As for the general health of the biotech sector, Matt said the usual complaints were a lack of capital, institutional coverage and experienced executives.
But with a lot more local companies funding phase three trials, it was "a very exciting time to be in the industry."
That is assuming your company is a predator rather than prey, of course."