Melbourne spin-out Hatchtech receives AU$12.6m for head lice treatment.

Australia-based pharmaceutical company Hatchtech, a spin-out of the University of Melbourne, has received AU$12.6m ($11.9m) for a new head lice-killing product.

The latest round was led by venture firm OneVentures, which was joined in participation by University of Melbourne, the Queensland Biotechnology Fund and spin-out focused venture fund Uniseed, and brings the company’s total venture capital and grant investments to $35.6m. The firm’s shareholders include OneVentures, Bowles, GBS Venture Partners, the University of Melbourne Endowment Trust, Queensland Biotechnology Funds, Uniseed, AustralianSuper, Blue Sky Venture Capital, and private investors. 

The company plans to use the funds to conduct its final clinical trial into its primary candidate DeOvo, a head lice treatment which can kill lice and their eggs within 10 minutes. Following approval by the Food and Drug Administration, Hatchtech intends to target the US initially, and hopes to start selling DeOvo by 2016. According to OneVentures general partner Paul Kelly, the potential market for global lice treatment is between $700m and $1bn a year.

As part of the deal, Richard Treagus, executive chairman of Neuren Pharmaceuticals, will join the Hatchtech board as independent director, while Hatchtech chief executive Hugh Alsop will become an executive director.

Alsop said: “We are delighted with the continued strong support from our existing shareholders and are also very encouraged that we have been able to secure several new investors to the business. Hatchtech represents a compelling investment opportunity for a number of reasons: we have a clear market opportunity; a differentiated product backed by strong safety and efficacy data that is now entering Phase III clinical trials; and a management team with experience in bringing products through regulatory approval and into market. The company is entering a pivotal and very exciting stage in its history, as we work towards FDA approval for our novel head lice treatment.”