Next week is an important milestone in my life. NDF Research (ndfresearch.com), which was founded on Friday 27 May 2016 to provide commissioned equity research focused on ASX-listed Life Science companies, will be a year old. Looking back over the last 12 months I have a lot to be thankful for, particularly the support and encouragement of great people I had yet to meet on that fateful day. Thank you to all of you who have contributed in some way to making it happen, or just passed on a kind word. Starting NDF Research was not something I did easily or lightly. The biotech and medical devices game may be a risky one, particularly in Australia and New Zealand, and requires a high risk appetite on the part of its participants, but I had never personally had the confidence to put out the shingle until last year, when I was past the age when I figured most entrepreneurs do their first start.

Partly what gave me the courage was the story of what I regard as the greatest startup in history, which took place in what is now the Startup Nation - the State of Israel - a long time ago. The startup I'm thinking of was, in effect, a spin out from the local building and fishing industry, and happened when a Great Man approached a couple of guys who had no experience in the field proposed for the new venture. The Great Man, aged about 30, said, simply, 'Follow Me'. That was a calling I have heeded myself, albeit imperfectly. We sometimes call the founder of the world's greatest startup the Great Physician, so I guess you could say His work was the forerunner of today's biotech and medical device industry.

Startups are perilous things. When the second-greatest startup in history was kicked off in Philadelphia in more recent years, the press release announcing it concluded with these these ominous words: 'We mutually pledge to each other our lives, our fortunes, and our sacred honour'. The 56 co-founders of that start - it attracted venture capital from 13 different jurisdictions, hence the high early headcount - knew that if they didn't get enough market share with their new venture it would not only fail but they would not be allowed to start another one. Their average age at the time was 44, which is comforting to this 46-year old entrepreneur. Thank heavens they succeeded.

Startups also tend to look a little messy at the beginning before they gain some traction. The third greatest startup in history was mostly staffed at the beginning by unskilled convicted criminals, many of whom had mental health issues and many of whom unfortunately died on the job. The venture had to rely almost exclusively on meagre government grants to survive. Indeed, it didn't take off until its main business changed from government services to agriculture a couple of decades after the start, but today people will move thousands and thousands of miles just to join this company. I was born into it. It's called Australia, and NDF Research, which I hope will go down in history as another great startup, is a recent spin-out company.

I will be in New Zealand all next week helping to build the Life Sciences sector of that great neighbour of Australia's. However the week after next, on around Monday 29 May, I intend to have a celebratory lunch for NDF's first birthday. If you'll be in downtown Sydney that day, just message me and I'll let you know the venue.
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Stuart Roberts,
Founder and Senior Analyst,
NDF Research.

Nisi Dominus Frustra.

Today we've published our evaluation report on Phylogica (ASX: PYC), a Perth-based biotechnology company focused on peptide drug development.

Peptides are potentially very valuable as the basis for future world-leading drugs, and Phylogica has a powerful discovery engine with its Phylomer platform.  Most importantly, having discovered how peptide drugs can be delivered intra-cellularly, the company is able to address hitherto ‘undruggable’ targets.  This should in turn open the way for a pipeline of potential blockbuster drugs.  The company has already signed collaboration agreements with AstraZeneca, Roche, Pfizer and J&J.  In due course, each of these can yield substantial milestone payments (one such already received).  In addition to the outsourced projects, the company also has its own three, highly-prospective, in-house programmes focused on cancer targets. Our report has been commissioned by Phylogica to provide a third-party valuation of the company. We value Phylogica at 5.2 cents per share base case and 14.2 cents per share optimistic case. We regard 10 cents per share as a reasonable mid-range valuation for Phylogica.

You can download a copy of NDF Research's evaluation report in Phylogica by clicking here. I commend the report to you. Note - the usual disclaimers apply - click here.