Hello from Sydney, Australia, the emerging Life Sciences frontier...
My name is Stuart Roberts and I have been involved in the healthcare and biotechnology sector since the early 2002, initially as a sell-side analyst doing equities research in the sector in Australia for participant member firms of the Australian Securities Exchange (ASX), then, from the start of 2015, as an executive inside ASX-listed biotech companies. I founded NDF Research after I decided to move back to equities research in mid-2016 (click here for my CV).
How it started. It was Thursday 21 February 2002. I'd just got my Masters of Finance degree and I had been working for about a year in the Research Department of a stockbroking firm in Sydney called Southern Cross Equities, after a couple of years writing for an investment newsletter called The Intelligent Investor. At Southern Cross I was initially a generalist researching whatever seemed interesting, but in 2001 two things had happened. Firstly, I saw a television interview one Sunday morning with the noted Australian immunologist Sir Gus Nossal, where he talked about his conviction that the biotechnology industry would grow in Australia and that, as part of that growth, people with the skills to evaluate biotech ventures would emerge in the financial markets. I was curious, and that led me a little while later to buy The Biotech Investor's Bible by George Wolff so as to figure out what it was all about. Then on that fateful Thursday in early 2002 Southern Cross' Chairman, the legendary Brent Potts, asked me to put to good use what I had learned and write a few lines about an antibody engineering company called Peptech (acquired years later by Cephalon). I spent about three months on the report and came away with three burning convictions. Firstly, that biotechnology and medical device companies had the potential to create serious shareholder value as the 21st Century progressed. Secondly, that good equity research on the sector was only just starting in Australia. And thirdly, that whoever could generate research of the sophistication required stood to help make investors a lot of money, by helping to capitalise some future billion dollar companies. I set out to become the best Life Sciences analyst this side of San Francisco.
How it started. It was Thursday 21 February 2002. I'd just got my Masters of Finance degree and I had been working for about a year in the Research Department of a stockbroking firm in Sydney called Southern Cross Equities, after a couple of years writing for an investment newsletter called The Intelligent Investor. At Southern Cross I was initially a generalist researching whatever seemed interesting, but in 2001 two things had happened. Firstly, I saw a television interview one Sunday morning with the noted Australian immunologist Sir Gus Nossal, where he talked about his conviction that the biotechnology industry would grow in Australia and that, as part of that growth, people with the skills to evaluate biotech ventures would emerge in the financial markets. I was curious, and that led me a little while later to buy The Biotech Investor's Bible by George Wolff so as to figure out what it was all about. Then on that fateful Thursday in early 2002 Southern Cross' Chairman, the legendary Brent Potts, asked me to put to good use what I had learned and write a few lines about an antibody engineering company called Peptech (acquired years later by Cephalon). I spent about three months on the report and came away with three burning convictions. Firstly, that biotechnology and medical device companies had the potential to create serious shareholder value as the 21st Century progressed. Secondly, that good equity research on the sector was only just starting in Australia. And thirdly, that whoever could generate research of the sophistication required stood to help make investors a lot of money, by helping to capitalise some future billion dollar companies. I set out to become the best Life Sciences analyst this side of San Francisco.
How it progressed. I hadn't studied any science since the age of 15, but what Wordsworth said about the French Revolution was true of me and biotechnology: Bliss was it in that dawn to be alive / But to be young was very heaven! The Internet had made learning about a new industry fairly straightforward because there was so much information available online. So while I initially thought that you pronounced 'recombinant' with an emphasis on the third syllable, at least there was somebody out there in Cyberspace who could explain in plain English exactly what was being recombined. Once I knew how the industry worked, I started publishing a regular newsletter called 'Australian Biotechnology Buzz', about what was going on in Life Sciences in Australia and New Zealand, in addition to writing dedicated research pieces on companies most people had never heard of with names like Autogen and Meditech. Alas, for a long time no-one made much money out of my efforts, because the years after 2003 saw the great Resources Boom send a lot of capital into the mining and energy sectors, where Australia's capital market has a natural affinity. However by 2009 I was able to spend more time in the emerging biotech and medical device sector as companies I knew started to attract serious investor interest. That's where I spent most of my research time for the next four years, at Southern Cross and its acquirer, Bell Potter, until mid-2013, and then for a year or so, at a smaller firm called Baillieu Holst. At the latter firm I also did telcos and new media because I knew that digital healthcare was going to be a big deal in the future.
Variety is the spice of life. If you look in the 'Background Reading' section of this web site there's a sample of my work over the years from 2005 to 2015. One of the benefits of doing what I did during that period was that I never got bored because there was so many companies to cover and they were all different. In my time in broking I covered in excess of 20 Life Sciences companies (click here) that are still around.
2015 - The big change. A veteran Sydney broker once joked with me, regarding good equity research, that 'in the bull markets you don't need it, and in the bear markets you can't afford it'. I reckon that aphorism is not quite true anymore. In the 21st Century technological change is upending all sorts of traditional (ie intermediated) ways of doing business and stockbroking is no different. So in an era where transaction costs in financial markets have dropped to just about nothing, most brokers can't afford to do good equity research in the bull markets either. I took the view in early 2015 that it was time to get out of the game, and went to work for a publicly-traded cancer immunotherapy company called Prima Biomed (ASX: PRR, Nasdaq: PBMD). After helping that company get re-rated and raise A$25m in new capital, I spent a few months with another cancer immunotherapy company called Imugene (ASX: IMU) before I founded NDF Research.
Why the return to equity research? I believe that in 2016 the demand for equity research globally is bigger than ever. Thanks largely to technology, even prosaic industrial companies are a whole lot more complicated than they were even fifteen years ago when I was starting out, and in the sector that I've specialised in - Life Sciences - the underlying knowledge base in some fields is doubling every eighteen months or so. There's just too much for investors, large and small, to learn without help from analysts. What's changing is where those analysts will be working. Increasingly they will be sitting inside independent specialist firms like NDF Research. For some background on the change, check out a recent article I wrote (click here) and an interesting 2014 article from efinancialcareers.
Where the 'NDF' name comes from. A few years ago I was out jogging when, running past St John's College at the University of Sydney, I noticed that their motto was Nisi Dominus Frustra. I looked it up (alas, they didn't let me do Latin at the public school I had to attend) and found it came from the opening lines of the 127th Psalm. I liked the fact that this Psalm was authored by King Solomon, the greatest capitalist of the ancient world. Moreover I heartily agreed with the sentiment. So I made it my personal motto. It was interesting to learn, since I have some Scottish blood, that Nisi Dominus Frustra is also the motto of the City of Edinburgh.
About my other lives. When I'm not working hard to build the biotech and medical devices industry in Australia and New Zealand, or working to keep my wife and three kids happy, I like reading, jazz, the theatre and old movies. And as you may have guessed from the previous paragraph, I am an active Churchgoer.
Get in touch. I like hearing from people who are interested in the Life Sciences sector in Australia and New Zealand. Please email stuart@ndfresearch.com or call +61 447 247 909.
Variety is the spice of life. If you look in the 'Background Reading' section of this web site there's a sample of my work over the years from 2005 to 2015. One of the benefits of doing what I did during that period was that I never got bored because there was so many companies to cover and they were all different. In my time in broking I covered in excess of 20 Life Sciences companies (click here) that are still around.
2015 - The big change. A veteran Sydney broker once joked with me, regarding good equity research, that 'in the bull markets you don't need it, and in the bear markets you can't afford it'. I reckon that aphorism is not quite true anymore. In the 21st Century technological change is upending all sorts of traditional (ie intermediated) ways of doing business and stockbroking is no different. So in an era where transaction costs in financial markets have dropped to just about nothing, most brokers can't afford to do good equity research in the bull markets either. I took the view in early 2015 that it was time to get out of the game, and went to work for a publicly-traded cancer immunotherapy company called Prima Biomed (ASX: PRR, Nasdaq: PBMD). After helping that company get re-rated and raise A$25m in new capital, I spent a few months with another cancer immunotherapy company called Imugene (ASX: IMU) before I founded NDF Research.
Why the return to equity research? I believe that in 2016 the demand for equity research globally is bigger than ever. Thanks largely to technology, even prosaic industrial companies are a whole lot more complicated than they were even fifteen years ago when I was starting out, and in the sector that I've specialised in - Life Sciences - the underlying knowledge base in some fields is doubling every eighteen months or so. There's just too much for investors, large and small, to learn without help from analysts. What's changing is where those analysts will be working. Increasingly they will be sitting inside independent specialist firms like NDF Research. For some background on the change, check out a recent article I wrote (click here) and an interesting 2014 article from efinancialcareers.
Where the 'NDF' name comes from. A few years ago I was out jogging when, running past St John's College at the University of Sydney, I noticed that their motto was Nisi Dominus Frustra. I looked it up (alas, they didn't let me do Latin at the public school I had to attend) and found it came from the opening lines of the 127th Psalm. I liked the fact that this Psalm was authored by King Solomon, the greatest capitalist of the ancient world. Moreover I heartily agreed with the sentiment. So I made it my personal motto. It was interesting to learn, since I have some Scottish blood, that Nisi Dominus Frustra is also the motto of the City of Edinburgh.
About my other lives. When I'm not working hard to build the biotech and medical devices industry in Australia and New Zealand, or working to keep my wife and three kids happy, I like reading, jazz, the theatre and old movies. And as you may have guessed from the previous paragraph, I am an active Churchgoer.
Get in touch. I like hearing from people who are interested in the Life Sciences sector in Australia and New Zealand. Please email stuart@ndfresearch.com or call +61 447 247 909.
Here's me with Nobel laureate Barry Marshall in Sydney in December 2012
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