Building New Zealand's Life Science sector |
“Just leaving for God’s own country.” -- the last telegram of Richard Seddon (1845-1906), one of NZ's great Prime Ministers, 1893-1906.
I'm sitting at my desk in Sydney about to perform an interesting transaction, where I will pay my dues to become a member of NZBIO, the advocacy organisation for the biotechnology industry in New Zealand. I'm not a New Zealander. I'm an Australian, and the majority of my work is done on the Australian side of the 'Ditch'. Moreover, I'm proud to be an Aussie. When the Wallabies play the All Blacks, I am cheering loudly for the Green and Gold, which is one reason why I'm so interested in anti-ageing medicine - I want to live long enough to see Australia win the Bledisloe Cup again.
So why should this proud Australian want to join NZBIO? Let me give you the real reason, then the altruistic reason. The real reason is that a few fortunes have already been made by bio-entrepreneurs harnessing the Life Sciences talent and know-how you can increasingly find in New Zealand. I believe there's more where that came from, and I'd like a piece of the action. The altruistic reason why I'm joining NZBIO is that New Zealand is too good a country not to have a viable Life Science sector, and, frankly, I'd like to help out.
In this article I first reprise my October 2016 analysis of what's good about New Zealand and its Life Science sector, which I published under the headline 100% Bullish on the New Zealand Life Sciences Sector. I then ask a basic question: 'Why should a country like New Zealand have a Life Sciences sector?' I argue that New Zealand already has the makings of a pretty good sector, but that right now it could use a little more encouragement from policy makers. Finally, I put forward one simple policy suggestion: That the New Zealand government do something it has done once before - partly fund NZBIO in order to foster the growth of the potentially valuable companies that NZBIO advocates for.
So why should this proud Australian want to join NZBIO? Let me give you the real reason, then the altruistic reason. The real reason is that a few fortunes have already been made by bio-entrepreneurs harnessing the Life Sciences talent and know-how you can increasingly find in New Zealand. I believe there's more where that came from, and I'd like a piece of the action. The altruistic reason why I'm joining NZBIO is that New Zealand is too good a country not to have a viable Life Science sector, and, frankly, I'd like to help out.
In this article I first reprise my October 2016 analysis of what's good about New Zealand and its Life Science sector, which I published under the headline 100% Bullish on the New Zealand Life Sciences Sector. I then ask a basic question: 'Why should a country like New Zealand have a Life Sciences sector?' I argue that New Zealand already has the makings of a pretty good sector, but that right now it could use a little more encouragement from policy makers. Finally, I put forward one simple policy suggestion: That the New Zealand government do something it has done once before - partly fund NZBIO in order to foster the growth of the potentially valuable companies that NZBIO advocates for.
If you think you know biotech, you need to know New Zealand
New Zealand already has the makings of a pretty good Life Sciences sector. I've said it before and I'll say it again, If you think you know biotech, you need to know New Zealand because this plucky little country of 4.7 million people down in the South Pacific has the potential to turn into a Global Power in our industry.
At the moment I reckon New Zealand is the 20th most innovative biotech country in the world (click here) - indeed, more innovative than Australia - with potential to move up the list and be ranked alongside better known innovators like the Netherlands, Israel or Singapore. New Zealand has everything a budding bio-entrepreneur would want. It's the world's third freest economy. It has two cities - Auckland and Wellington - rated among the planet's most liveable. The University of Auckland is a Top 100 University and the University of Otago down in Dunedin is in the Top 200. The country has all the important elements of a sustainable Life Sciences 'ecosystem' available at a reasonable cost, either at home or within three hours' flight time here in Australia. It's harder to find a place in the industrialised world that is lower cost when it comes to running clinical trials.
Critically, New Zealand has access to private capital thanks to an Israel-style VC system, as well as some public risk money through the local stock exchange, the NZX, and the more bio-friendly ASX next door in Australia. And the list of winning companies is starting to build up, beginning with Fisher & Paykel Healthcare (NZX: FPH) but now including the A2 Milk Company (NZX: ATM), AFT Pharmaceuticals (NZX: AFT) and Comvita (NZX: CVT) among others.
So why should a country like New Zealand have a Life Sciences sector in the first place? If the economic policy makers in Wellington ever asked that question of me, here's how I would answer: If I told you that your country needed to be part of the 'New Economy', you wouldn't argue with me about that, would you? Particularly since being not much more than a vast sheep run almost sent you broke in the 1980s. Just about everyone agrees that the 'winner countries' of the 21st Century in terms of job and wealth creation will be less and less about agriculture, mining and manufacturing and more about 'technology'.
The trouble is, most people, including politicians and, alas, some policy makers on both sides of the Tasman, when they use the word 'technology', mean 'Information Technology' in all its many forms. Information Technology can be, in my view, a somewhat unsteady foundation on which to build the future prosperity of countries currently in the 'advanced industrial' category like New Zealand.
For a start, it's often all-too-easy to pick up IT-based paradigms and tools from the First World and move them to the Third World. That's why, for example, you find software development labs in places like Phnom Penh, the capital of a country with an overall low standard of living and relatively little political or economic freedom. Or why you can buy a brand new smartphone in Myanmar for just US$20. You don't find biotech companies in those places.
The second problem with Information Technology is that it generally comes with what I call 'Silicon Valley economics' - as Moore's Law relentlessly lowers the price of processing power, so one is obliged to keep cutting the price of one's product. If you want some perspective on the downsides of Information Technology for long-run economic well-being, I highly recommend Martin Ford's 2016 book Rise of the Robots: Technology and the Threat of a Jobless Future.
Don't get me wrong - as Silicon Valley has shown, and New Zealand appears to be showing with companies like Xero, a First World country or region that's good at IT can stay rich so long as its entrepreneurs keep innovating and the products and services are properly branded. However what I argue is that, in addition to strong expertise in Information Technology, a true New Economy needs capability in other kinds of technology that can't be easily copied, and where the pricing power is stronger. And no better sector exists with these qualities than Life Sciences. Develop a competitor to Minecraft and you might get to sell it for US$26.95 per user for as many months as the kids are interested. Develop a successful new Orphan Drug and you can have perhaps 14 or 15 years of more-or-less unchallenged sales for a product priced in the US market at hundreds of thousands of dollars per year.
Relatively few countries can do the biotech thing, because the people with the relevant expertise often have PhD-level educations, can choose where they want to live, and don't exist in large numbers. New Zealand is, in my view, one of only about 37 nations with enough of those smart PhDs to build a viable Life Sciences sector. And if you give those smart PhDs some encouragement, you could get help next eight A2 Milk Companies start up and flourish in your country.
At the moment I reckon New Zealand is the 20th most innovative biotech country in the world (click here) - indeed, more innovative than Australia - with potential to move up the list and be ranked alongside better known innovators like the Netherlands, Israel or Singapore. New Zealand has everything a budding bio-entrepreneur would want. It's the world's third freest economy. It has two cities - Auckland and Wellington - rated among the planet's most liveable. The University of Auckland is a Top 100 University and the University of Otago down in Dunedin is in the Top 200. The country has all the important elements of a sustainable Life Sciences 'ecosystem' available at a reasonable cost, either at home or within three hours' flight time here in Australia. It's harder to find a place in the industrialised world that is lower cost when it comes to running clinical trials.
Critically, New Zealand has access to private capital thanks to an Israel-style VC system, as well as some public risk money through the local stock exchange, the NZX, and the more bio-friendly ASX next door in Australia. And the list of winning companies is starting to build up, beginning with Fisher & Paykel Healthcare (NZX: FPH) but now including the A2 Milk Company (NZX: ATM), AFT Pharmaceuticals (NZX: AFT) and Comvita (NZX: CVT) among others.
So why should a country like New Zealand have a Life Sciences sector in the first place? If the economic policy makers in Wellington ever asked that question of me, here's how I would answer: If I told you that your country needed to be part of the 'New Economy', you wouldn't argue with me about that, would you? Particularly since being not much more than a vast sheep run almost sent you broke in the 1980s. Just about everyone agrees that the 'winner countries' of the 21st Century in terms of job and wealth creation will be less and less about agriculture, mining and manufacturing and more about 'technology'.
The trouble is, most people, including politicians and, alas, some policy makers on both sides of the Tasman, when they use the word 'technology', mean 'Information Technology' in all its many forms. Information Technology can be, in my view, a somewhat unsteady foundation on which to build the future prosperity of countries currently in the 'advanced industrial' category like New Zealand.
For a start, it's often all-too-easy to pick up IT-based paradigms and tools from the First World and move them to the Third World. That's why, for example, you find software development labs in places like Phnom Penh, the capital of a country with an overall low standard of living and relatively little political or economic freedom. Or why you can buy a brand new smartphone in Myanmar for just US$20. You don't find biotech companies in those places.
The second problem with Information Technology is that it generally comes with what I call 'Silicon Valley economics' - as Moore's Law relentlessly lowers the price of processing power, so one is obliged to keep cutting the price of one's product. If you want some perspective on the downsides of Information Technology for long-run economic well-being, I highly recommend Martin Ford's 2016 book Rise of the Robots: Technology and the Threat of a Jobless Future.
Don't get me wrong - as Silicon Valley has shown, and New Zealand appears to be showing with companies like Xero, a First World country or region that's good at IT can stay rich so long as its entrepreneurs keep innovating and the products and services are properly branded. However what I argue is that, in addition to strong expertise in Information Technology, a true New Economy needs capability in other kinds of technology that can't be easily copied, and where the pricing power is stronger. And no better sector exists with these qualities than Life Sciences. Develop a competitor to Minecraft and you might get to sell it for US$26.95 per user for as many months as the kids are interested. Develop a successful new Orphan Drug and you can have perhaps 14 or 15 years of more-or-less unchallenged sales for a product priced in the US market at hundreds of thousands of dollars per year.
Relatively few countries can do the biotech thing, because the people with the relevant expertise often have PhD-level educations, can choose where they want to live, and don't exist in large numbers. New Zealand is, in my view, one of only about 37 nations with enough of those smart PhDs to build a viable Life Sciences sector. And if you give those smart PhDs some encouragement, you could get help next eight A2 Milk Companies start up and flourish in your country.
New Zealand needs to milk its Life Science capability for all it's worth.
A2 Milk is the pattern for New Zealand's future prosperity in Life Sciences. What did I mean by the particular reference to the A2 Milk Company above? Well, I noted above that 'a few fortunes have already been made by bio-entrepreneurs harnessing the Life Sciences talent and know-how you can increasingly find in New Zealand'. Few more stunning examples exists of an 18-year overnight Life Sciences success story than this one. Take a look at this inspirational company video if you've never heard of A2.
Back in October 2016 I asked my readers 'Ever enjoyed A2 milk? That originated because the Kiwi chemical engineer Dr Corran McLachlan (1944-2003) figured out that the milk protein beta-casein A1 had a connection with ischaemic heart disease (click here) whereas milk with just beta-casein A2 was good for you. The result was the A2 Milk Company, now capitalised at around NZ$1.4bn, which shows you what smart Kiwi biology can achieve commercially'.
That was less than a year and a half ago. Today the A2 Milk Company is capitalised at more like NZ$9.2bn, making it New Zealand's largest listed company. Yet for most of its life very few people really believed in this company. Who, you would get asked, would in their right mind pay 50% more for something as everyday as milk? And who would believe the outrageous health claims being made about A2? Indeed, as recently as last October I had that kind of conversation with a dairy farmer at the airport in Dunedin, where A2 started up. Well, I'm one of those crazy folks, having sworn off regular milk last year after a survey of the literature. And there must be a fair few others because in the six months to December 2017 A2's group revenue was NZ$435m, up 70% year-on-year, and its operating EBITDA was NZ$143m.
So on both sides of the Ditch you can now talk about A2 Milk in respectable company. Go back in time, however, and the company was initially capitalised at just NZ$17m when it first listed on the NZX's Alternative Market in April 2004. As recently as late 2010 you could have bought it for maybe NZ$40-50m. Now no one can argue that A2 isn't the real deal. Or maybe they will, but I'll just show them the kind of smarts Chief Scientific Officer Dr Andrew Clarke - the most senior Kiwi in the company today - has put into A2 Milk through the likes of WO/2014/193248, or WO/2016/190750, or WO/2017/171563. One party that really knows A2 is the real deal is its apparent sworn enemy, the New Zealand dairy giant Fonterra, which, on the same day as A2's half-yearly last month, announced that its Australian arm will set up an A2 milk pool to service the Fonterra nutritional product range. No wonder A2 stock jumped 26% in a single day.
Fonterra's news was the equivalent in the dairy world of the Soviet Union announcing it was calling off Communism. Which is to say, no one really saw it coming, including me. Indeed, at the NZBIO Annual Meeting just five months ago I joked with a couple of Fonterra guys that every time I passed them in the halls I could hear the tune to the Imperial March from Star Wars. What I was bantering about was Fonterra's alleged dismissal of A2 as merely a 'marketing concept'. Luckily Kiwis have a fine sense of humour or I would have found myself in a serious Trans-Tasman argument.
The reason A2 got to be Fonterra's disrupter - and you can get a more comprehensive take on this from Keith Woodford's 2009 book Devil in the Milk: Illness, Health and the Politics of A1 and A2 Milk - lies in the secret sauce of any successful Life Science company at the beginning - True Belief. Back in the 1990s only Corran McLachlan and a few select others understood the importance of getting A1 out of milk, but McLachlan had believed it enough to take out some foundation intellectual property in the form of WO/1996/036239, priority date 16 May 1995. Then along came the legendary Dunedin businessman Howard Paterson (1952-2003).
I never met Paterson but he sounds like my kind of bio-entrepreneur. When he unexpectedly died the New Zealand Herald reported in its obituary that he had 'made his fortune through a mixture of perception and boundless enthusiasm'. The bloke was the wealthiest man on New Zealand's South Island - a pretty conservative part of the world. And most of his fortune had been made in agriculture, property and tourism - all conventional industries New Zealand is good at. But Howard Paterson also clearly also had what Keynes famously described as 'animal spirits', because he was the one who funded A2 Milk in 2000 to develop the genetic test that would to determine whether a cow would produce milk without the A1 protein. One tribute article on Paterson from Vivian Pullar put the secret of Paterson's Life Science success this way: 'Paterson could commercialise science in a way that government often only talked about. It went beyond throwing money at good ideas and pure capital gain. Paterson’s accomplishments came from talking to people, choosing the best people for the job, and viewing science and business through a humanistic lens'. Paterson's legacy isn't just the billions from the A2 Milk Company but also another Dunedin company, called Blis Technologies (NZ: BLT), a successful probiotics developer. Interestingly, Paterson and McLachlan died within two months of each other in mid-2003, the latter from cancer, so neither lived to see their amazing True Belief vindicated.
Back in October 2016 I asked my readers 'Ever enjoyed A2 milk? That originated because the Kiwi chemical engineer Dr Corran McLachlan (1944-2003) figured out that the milk protein beta-casein A1 had a connection with ischaemic heart disease (click here) whereas milk with just beta-casein A2 was good for you. The result was the A2 Milk Company, now capitalised at around NZ$1.4bn, which shows you what smart Kiwi biology can achieve commercially'.
That was less than a year and a half ago. Today the A2 Milk Company is capitalised at more like NZ$9.2bn, making it New Zealand's largest listed company. Yet for most of its life very few people really believed in this company. Who, you would get asked, would in their right mind pay 50% more for something as everyday as milk? And who would believe the outrageous health claims being made about A2? Indeed, as recently as last October I had that kind of conversation with a dairy farmer at the airport in Dunedin, where A2 started up. Well, I'm one of those crazy folks, having sworn off regular milk last year after a survey of the literature. And there must be a fair few others because in the six months to December 2017 A2's group revenue was NZ$435m, up 70% year-on-year, and its operating EBITDA was NZ$143m.
So on both sides of the Ditch you can now talk about A2 Milk in respectable company. Go back in time, however, and the company was initially capitalised at just NZ$17m when it first listed on the NZX's Alternative Market in April 2004. As recently as late 2010 you could have bought it for maybe NZ$40-50m. Now no one can argue that A2 isn't the real deal. Or maybe they will, but I'll just show them the kind of smarts Chief Scientific Officer Dr Andrew Clarke - the most senior Kiwi in the company today - has put into A2 Milk through the likes of WO/2014/193248, or WO/2016/190750, or WO/2017/171563. One party that really knows A2 is the real deal is its apparent sworn enemy, the New Zealand dairy giant Fonterra, which, on the same day as A2's half-yearly last month, announced that its Australian arm will set up an A2 milk pool to service the Fonterra nutritional product range. No wonder A2 stock jumped 26% in a single day.
Fonterra's news was the equivalent in the dairy world of the Soviet Union announcing it was calling off Communism. Which is to say, no one really saw it coming, including me. Indeed, at the NZBIO Annual Meeting just five months ago I joked with a couple of Fonterra guys that every time I passed them in the halls I could hear the tune to the Imperial March from Star Wars. What I was bantering about was Fonterra's alleged dismissal of A2 as merely a 'marketing concept'. Luckily Kiwis have a fine sense of humour or I would have found myself in a serious Trans-Tasman argument.
The reason A2 got to be Fonterra's disrupter - and you can get a more comprehensive take on this from Keith Woodford's 2009 book Devil in the Milk: Illness, Health and the Politics of A1 and A2 Milk - lies in the secret sauce of any successful Life Science company at the beginning - True Belief. Back in the 1990s only Corran McLachlan and a few select others understood the importance of getting A1 out of milk, but McLachlan had believed it enough to take out some foundation intellectual property in the form of WO/1996/036239, priority date 16 May 1995. Then along came the legendary Dunedin businessman Howard Paterson (1952-2003).
I never met Paterson but he sounds like my kind of bio-entrepreneur. When he unexpectedly died the New Zealand Herald reported in its obituary that he had 'made his fortune through a mixture of perception and boundless enthusiasm'. The bloke was the wealthiest man on New Zealand's South Island - a pretty conservative part of the world. And most of his fortune had been made in agriculture, property and tourism - all conventional industries New Zealand is good at. But Howard Paterson also clearly also had what Keynes famously described as 'animal spirits', because he was the one who funded A2 Milk in 2000 to develop the genetic test that would to determine whether a cow would produce milk without the A1 protein. One tribute article on Paterson from Vivian Pullar put the secret of Paterson's Life Science success this way: 'Paterson could commercialise science in a way that government often only talked about. It went beyond throwing money at good ideas and pure capital gain. Paterson’s accomplishments came from talking to people, choosing the best people for the job, and viewing science and business through a humanistic lens'. Paterson's legacy isn't just the billions from the A2 Milk Company but also another Dunedin company, called Blis Technologies (NZ: BLT), a successful probiotics developer. Interestingly, Paterson and McLachlan died within two months of each other in mid-2003, the latter from cancer, so neither lived to see their amazing True Belief vindicated.
People-oriented solutions for building New Zealand's Life Science sector
Why New Zealand Life Sciences sector could use a little more encouragement from policy makers. Which brings me to how to make New Zealand's Life Science sector really hum. Notice how Vivian Pullar puts it: Paterson could commercialise science in a way that government often only talked about. The trouble with New Zealand, as I noted in October 2016, is that the sector is viable - just witness the seven or so really valuable pieces of IP that have emerged from patent filings every year since 1998 without fail (click here) - but the country doesn't create as many Life Science companies as it could given its size. Nor, with notable exceptions like A2 Milk, does it capitalise most of the ones that it does create at the kinds of pricing Australian companies would get, let alone what you could get on Nasdaq. That's because risk capital for Life Science ventures in New Zealand is generally hard to come by, and often it seems like you need to have Howard Paterson-style enthusiasm to get a lot of it. Only, Howard Paterson has been dead for almost 15 years, and, if I could venture a Biblical phrase, the mantle of Elijah doesn't seem to have been picked up by Elisha just yet. My solution to this problem is simple. New Zealand has to get more Howard Patersons, or at least people with Paterson-style confidence and belief, the rest will follow. Which brings me to my suggested policy approach for the New Zealand Life Science sector.
We need people-oriented solutions for building New Zealand's Life Science sector. I was once asked by a senior New Zealand government official who believed in the importance of Life Sciences what the government could do to promote the sector in New Zealand. I replied with a joke to illustrate a point I often make: That what's needed in this game isn't really more taxpayer money but more of the right kind of men and women.
'You Kiwis’, I said, 'are all good-looking people’. The Kiwis listening to me all nodded their heads in agreement. ‘So my policy proposal harnesses a New Zealand competitive advantage. You need to recruit the 180 most attractive but unattached Kiwis under the age of 35 and send them out to all the major biotech hubs – Palo Alto, Research Triangle Park, Leiden, Babraham, whatever. The mission of these hot and intrepid Kiwis: To marry a talented PhD or MBBS currently working in a Life Science company, or in venture capital or investment banking oriented towards biotech, and bring them back to New Zealand (and keep them there). Those who successfully accomplish that mission are thereafter exempted from New Zealand income tax. What you would get from those 180 new husbands and wives is a core of highly skilled immigrants, some of whom would start biotech companies and before you know it The Octagon in Dunedin becomes the next Kendall Square'. Cue the laugh track.
The core of truth behind my joke about New Zealand as 'Calypso's Bio-Island' is that I keep meeting talented Kiwi bio-entrepreneurs who first arrived in New Zealand from somewhere else after being caught in the tender trap. My serious message from the joke: Make sure you stock the talent pool and the money will follow, whether the latter comes from Auckland, Sydney, New York, London or Zurich.
So the government should look seriously at how easy it is for biotech people to immigrate to New Zealand or just get permanent residency, no matter how low-grade their country of origin. They should consider funding overseas internships for budding Kiwi bio-entrepreneurs. One particularly good idea would be specifically channeling residency by investment programmes to Life Sciences. And so on. But that's not my best policy suggestion, which relates to NZBIO.
We need people-oriented solutions for building New Zealand's Life Science sector. I was once asked by a senior New Zealand government official who believed in the importance of Life Sciences what the government could do to promote the sector in New Zealand. I replied with a joke to illustrate a point I often make: That what's needed in this game isn't really more taxpayer money but more of the right kind of men and women.
'You Kiwis’, I said, 'are all good-looking people’. The Kiwis listening to me all nodded their heads in agreement. ‘So my policy proposal harnesses a New Zealand competitive advantage. You need to recruit the 180 most attractive but unattached Kiwis under the age of 35 and send them out to all the major biotech hubs – Palo Alto, Research Triangle Park, Leiden, Babraham, whatever. The mission of these hot and intrepid Kiwis: To marry a talented PhD or MBBS currently working in a Life Science company, or in venture capital or investment banking oriented towards biotech, and bring them back to New Zealand (and keep them there). Those who successfully accomplish that mission are thereafter exempted from New Zealand income tax. What you would get from those 180 new husbands and wives is a core of highly skilled immigrants, some of whom would start biotech companies and before you know it The Octagon in Dunedin becomes the next Kendall Square'. Cue the laugh track.
The core of truth behind my joke about New Zealand as 'Calypso's Bio-Island' is that I keep meeting talented Kiwi bio-entrepreneurs who first arrived in New Zealand from somewhere else after being caught in the tender trap. My serious message from the joke: Make sure you stock the talent pool and the money will follow, whether the latter comes from Auckland, Sydney, New York, London or Zurich.
So the government should look seriously at how easy it is for biotech people to immigrate to New Zealand or just get permanent residency, no matter how low-grade their country of origin. They should consider funding overseas internships for budding Kiwi bio-entrepreneurs. One particularly good idea would be specifically channeling residency by investment programmes to Life Sciences. And so on. But that's not my best policy suggestion, which relates to NZBIO.
Funding NZBIO
Sounds naive to you, doesn't it? Don't ask the Beehive for much more money, just for better ways to get people. Well, what's wrong with that? It's not like many advanced industrial countries are without budgetary pressures, and New Zealand, while it is in better fiscal shape than most, is watching its pennies carefully so it doesn't have much to spare on publicly-funded R&D (click here). There is, however, some small amount of money that the government can spend to excellent effect.
I argue that the New Zealand government should partly fund NZBIO, possibly in conjunction with AusBiotech, Australia's biotech advocacy group, as part of a matching support programme promoting Trans-Tasman co-operation in the sector.
I first started thinking about this idea after I spoke at NZBIO's Annual Meeting last October. It was one of the best Life Science meetings I've been to in fifteen years in the game, and a great credit to CEO Dr Zahra Champion, who made it such a wonderful learning experience. The topic of my talk was supposed to be 'Building a Kiwi biotech just got a whole lot easier'. I even had a painstakingly-prepared slide deck prepared which you can view by clicking here. However they slotted me on as the last after-dinner speaker right behind NZBIO's Chairman, Dr Andy Herbert, who reported to the attendees in his speech that if the organisation's finances didn't improve there might be no NZBIO 2018. Fair enough, but that still meant it was time for describing some Blue Sky, so we could hit Wellington's bars for the after party on a high note.
I threw away my notes and preached to the faithful that now was the time for this sector because the Biotech Revolution, now over 30 years in the making, had made it to New Zealand, and everything from its founding to the present had contributed to make it great and was in place locally to make it great too. I didn't say this in my talk but I now note that A2 Milk stock was about NZ$7.50-$8.00 a share at the time, as against a mere NZ$2.00 or so a year previous. Moreover in his keynote earlier in the day New Zealand's Chief Scientist, the venerable Sir Peter Gluckman, had spoken of the rise of 'alternative' food and drink as a coming economic threat to New Zealand, but here was a Kiwi company that could harness it as an opportunity. So I still feel my optimism had some solid footing.
At drinks afterwards I could tell there were some likeminded and capable people in the room who cared about the Kiwi sector and believed in it. An American introduced himself to me. 'You mentioned Bob Swanson in your talk', he said, referring to the legendary founder of Genentech, who died in 1999 but as a Founding Father of biotech in the mid-1970s had written greatness into the industry's DNA. 'I knew Bob'. My new friend agreed with how I'd called it.
To return to NZBIO, I argue that partial taxpayer funding for the organisation is what can help catalyse the kind of greatness I talked about that night last October in Wellington. If nothing else you would get a guaranteed full-time advocacy voice for the sector in New Zealand. I recognise that this has been tried before but it's worth trying again given the now-palpable success of A2 and the rise of other companies on the cusp. The government could probably get away with a pocket change outlay of just NZ$400,000 or so for NZBIO to develop new strategies and gather the necessary data to support those strategies. Then maybe it spends another NZ$200,000 a year over the next three to five years - make it three since that's the New Zealand electoral cycle and the next election doesn't happen until 2020. And this is important - the money comes with key targets for the organisation to deliver.
The NZBIO team would likely be kept small and the onus would be on NZBIO's membership to keep it going. But the taxpayer's contribution would be well spent for three reasons. Firstly, the sector would now have a viable organisation that could work towards overcoming the sector's funding challenges. Secondly, there would be a point person that the government could consult when working on policy issues relevant for the sector, and the sector could talk to when a government decision or policy proved adverse to particular sector initiatives. Thirdly, it would allow the sector to work on its own innovative policy proposals. And have a figurehead to go on TV and explain Life Sciences and its benefits to the voters. The money would also be well spent because, having gotten to know the current NZBIO team a bit, I can confidently say that they are True Believers. They and their sector deserve to be freed up to help out the next eight A2 Milks.
I argue that the New Zealand government should partly fund NZBIO, possibly in conjunction with AusBiotech, Australia's biotech advocacy group, as part of a matching support programme promoting Trans-Tasman co-operation in the sector.
I first started thinking about this idea after I spoke at NZBIO's Annual Meeting last October. It was one of the best Life Science meetings I've been to in fifteen years in the game, and a great credit to CEO Dr Zahra Champion, who made it such a wonderful learning experience. The topic of my talk was supposed to be 'Building a Kiwi biotech just got a whole lot easier'. I even had a painstakingly-prepared slide deck prepared which you can view by clicking here. However they slotted me on as the last after-dinner speaker right behind NZBIO's Chairman, Dr Andy Herbert, who reported to the attendees in his speech that if the organisation's finances didn't improve there might be no NZBIO 2018. Fair enough, but that still meant it was time for describing some Blue Sky, so we could hit Wellington's bars for the after party on a high note.
I threw away my notes and preached to the faithful that now was the time for this sector because the Biotech Revolution, now over 30 years in the making, had made it to New Zealand, and everything from its founding to the present had contributed to make it great and was in place locally to make it great too. I didn't say this in my talk but I now note that A2 Milk stock was about NZ$7.50-$8.00 a share at the time, as against a mere NZ$2.00 or so a year previous. Moreover in his keynote earlier in the day New Zealand's Chief Scientist, the venerable Sir Peter Gluckman, had spoken of the rise of 'alternative' food and drink as a coming economic threat to New Zealand, but here was a Kiwi company that could harness it as an opportunity. So I still feel my optimism had some solid footing.
At drinks afterwards I could tell there were some likeminded and capable people in the room who cared about the Kiwi sector and believed in it. An American introduced himself to me. 'You mentioned Bob Swanson in your talk', he said, referring to the legendary founder of Genentech, who died in 1999 but as a Founding Father of biotech in the mid-1970s had written greatness into the industry's DNA. 'I knew Bob'. My new friend agreed with how I'd called it.
To return to NZBIO, I argue that partial taxpayer funding for the organisation is what can help catalyse the kind of greatness I talked about that night last October in Wellington. If nothing else you would get a guaranteed full-time advocacy voice for the sector in New Zealand. I recognise that this has been tried before but it's worth trying again given the now-palpable success of A2 and the rise of other companies on the cusp. The government could probably get away with a pocket change outlay of just NZ$400,000 or so for NZBIO to develop new strategies and gather the necessary data to support those strategies. Then maybe it spends another NZ$200,000 a year over the next three to five years - make it three since that's the New Zealand electoral cycle and the next election doesn't happen until 2020. And this is important - the money comes with key targets for the organisation to deliver.
The NZBIO team would likely be kept small and the onus would be on NZBIO's membership to keep it going. But the taxpayer's contribution would be well spent for three reasons. Firstly, the sector would now have a viable organisation that could work towards overcoming the sector's funding challenges. Secondly, there would be a point person that the government could consult when working on policy issues relevant for the sector, and the sector could talk to when a government decision or policy proved adverse to particular sector initiatives. Thirdly, it would allow the sector to work on its own innovative policy proposals. And have a figurehead to go on TV and explain Life Sciences and its benefits to the voters. The money would also be well spent because, having gotten to know the current NZBIO team a bit, I can confidently say that they are True Believers. They and their sector deserve to be freed up to help out the next eight A2 Milks.
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