The Baker Institute Announces Sale of Nucleus Network

Baker Heart and Diabetes Institute is pleased to announce the sale of its clinical research subsidiary, Nucleus Network, to Australian private equity firm, Crescent Capital Partners.

The sale of Nucleus Network, which operates Australia’s leading phase one clinical trial facility, is set to boost the Victorian and Australian biotechnology and medical research sectors.

The sale will also enable one of the country’s most established medical research institutes, the Baker Institute, to invest more funds in medical research to tackle the greatest health challenges facing Australians today.

Chairman of the Baker Institute’s Board, Mr Peter Scott said: “We have been investigating a sale of Nucleus Network because we believe this burgeoning biotechnology business has outgrown the remit of the Institute, which is firmly focussed on cardiovascular and diabetes research.”

“What started as an idea to market Victoria and Australia’s research capabilities to the world has become a reality, with the Institute nurturing this business through its development stage to become a jewel in the crown of Australia’s biotechnology sector,” Mr Scott said.

“The growth of Nucleus Network has been extraordinary and the sale to Crescent will ensure its future looks even brighter, with greater investment set to drive this business to the next level.

The sale of Nucleus Network sets us on a path towards transformation of the 92-year-old Institute."

“The sale will also provide the Institute with a corpus of funds, to be supplemented by funds raised from donors, that will enable the Institute to operate sustainably on a much greater scale in researching and seeking to address cardiovascular disease and diabetes,” he said.

Start-up funding and the foresight of the then Labor Government in Victoria helped establish Nucleus Network in 2003 through the provision of establishment grants. Nucleus Network has since conducted more than 500 early phase and first-in-human clinical trials for global pharmaceutical and biotechnology companies.

Baker Institute Director, Professor Tom Marwick said the sale set the Institute on a path towards transformation of the 92-year-old Institute.

“This is an exciting era for us — the community burden of the approximately five million Australians with heart- and diabetes-related disease is huge. These problems won’t be solved by doing more of the same, so our research has never been more important,” Professor Marwick said.

“Proceeds from this sale will complement our very generous community support and help us to invest in the experts and equipment we need to ambitiously pursue our research programs in disease prevention and management of cardiovascular disease and diabetes."

“We aim to take a prudent financial approach and invest a large percentage of the sale proceeds to underpin the long-term financial stability of the Institute. This will place us in a very strong financial position as we look to our centenary and to solving big-picture questions about cardiovascular disease and diabetes.”

Mr Scott and Professor Marwick praised the team at Nucleus Network, saying the highly experienced management team was a reason for the solid interest in the company, with the organization having created a strong financial profile, diverse customer base, and highly skilled workforce during the past several years.

Crescent Capital Partners will draw on its healthcare expertise to support and accelerate the next stage of Nucleus’ development.

Crescent Capital Partners’ Daren McKennay said the trials conducted by Nucleus provide a critical step in ensuring the safety and efficacy of new drugs and devices headed for the marketplace.

“We are committed to furthering Nucleus’ contributions to medical outcomes and to the research community, as well as continuing its long-standing relationships within the sector,” Mr McKennay said.

“This will be a new and exciting chapter for Nucleus, a focus of which will be greater investment in growing the expertise of the company.”

Crescent Capital Partners is one of the most active and experienced investors in the Australian healthcare sector, including through its investments in National Dental Centre, skin cancer clinic owner Sun Doctors, MyHealth Medical Centres, pathology provider Australian Clinical Labs and previous interests in National Hearing Care and ASX listed device company, LifeHealthcare.

The Baker Institute will continue to take an active interest in Nucleus Network, with an option to maintain up to 20 per cent of the business.

The purchase, for an undisclosed sum, follows a successful sale process led by financial advisory firm, Lazard, with EY acting as accounting/tax advisors and MinterEllison as legal advisors.