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Research is what I'm doing when I don't know what I'm doing - Wernher von Braun, German-American rocket pioneer (1912-1977)
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An example of my original Biotech Buzz newsletter
I wrote my original Australian Biotechnology Buzz newsletter between 2003 and 2006. People are still reminding me of it today with some fondness, and it was described by one commentator as 'brash and sassy', which is unusual for broker research. Click here for a sample from April 2006 that has survived online. In this edition of the Buzz I write about an emerging heart assist device developer called HeartWare. That company in late June 2016 attracted a US$1.1bn bid from Medtronic, but a decade ago it was a minnow being funded in Australia. At the end of each Biotech Buzz newsletter I used this text to describe what I was trying to do at Southern Cross Equities: "The patron saint of biotechnology research at Southern Cross Equities is Robert Swanson (1947-99), the American venture capitalist whose understanding of the way to get commercial and scientific interests to work in lockstep enabled the founding and building of Genentech. It is aim of the team at Southern Cross Equities to emulate Swanson in getting behind Australian biotechnology companies that are both solidly commercial and solidly scientific. It is our conviction that such companies will be among the nation's leading companies in the 21st Century as the biotechnology industry matures the early work that has gone on since the mid-1980s. With over 90 biotechnology companies listed on the Australian Stock Exchange, or 5% of the total, we see the sector as becoming increasingly worthy of investor attention. Through Southern Cross Equities' Australian Biotechnology Buzz, the Biotech Team at Southern Cross Equities have sought since 2003 to pinpoint investment opportunities in Australian biotechnology in the most understandable and interesting way possible." Helping to fund a future winner In 2003 Southern Cross Equities raised A$6.65m for a company called Autogen. In those days they were an genomics play focused on obesity and Type II diabetes (click here for the deal announcement) under the leadership of Deakin University's Professor Greg Collier. As ChemGenex the company was eventually brought by Cephalon while the lead compound, Synribo (Omacetaxine Mepesuccinate) gained FDA approval in 2012. Not all my ideas from a decade ago worked out If you click here there's a chat room mostly in German but where the English text of a Buzz piece has survived concerning a now-defunct Sydney-based company called Ambri. They were working on emergency room diagnostic called SensiDx. In the end the technology proved too complicated. We did conferences Click here for an article I wrote after Southern Cross Equities hosted an investment conference called 'DNA, Devices and Dealers' in Sydney in September 2005. In 2012, by which time Southern Cross Equities had become Bell Potter, we did a conference that Bioshares wrote about (click here for that article). A podcast from 2006 Click here for a podcast of a talk on biotechnology I gave at Australian Technology Park in the inner-Sydney suburb of Redfern to an audience of technology entrepreneurs. The day the Buzz died Click here to read what my friend Rudi wrote when I stopped publishing Australian Biotechnology Buzz in mid-2006 to focus on bigger-cap research. I didn't cry but it was a tough day for me. I get back in the game I spent the years from 2006 to 2009 mostly working on large-cap ASX-listed healthcare companies like Cochlear (ASX: COH), ResMed (ASX and NYSE: RMD) and CSL Ltd (ASX: CSL). That was a lot of fun and I particularly enjoyed Cochlear because I was a great fan of CEO Dr Chris Roberts (no relation). However by 2010 I was covering smaller-cap companies again. Click here for a report I wrote at that time on Prima BioMed (ASX: PRR, Nasdaq: PBMD). We now know that the ovarian cancer therapy I am writing about in this report only has potential to work for patients in their second remission. Click here for a report summarising my Life Sciences coverage in February 2011. I discover regenerative medicine As a social conservative I wasn't crazy about embryonic stem cells when they were the talk of the town in 2002, but it was pleasing to see in 2009 that Mesoblast (ASX: MSB, Nasdaq: MESO) had made so much progress with adult stem cells. I also rejoiced that it was an Australian company headquartered in Melbourne that was leading the stem cell field globally. Founder Silviu Itescu, who came to Australia from Romania as a child, is a hero of mine. Click here for a comprehensive report I wrote in March 2011 and here for a November 2011 update note on the use of Mesoblast's cells in heart failure. I got mentioned in the Sydney Morning Herald (SMH) in 2011 Every now and then the press down here writes a piece on why biotech is important. Click here for a typical article where they get a quote from me. I love getting there first I believe that no-one had ever written a decent report on the heart assist device developer Sunshine Heart (Nasdaq: SSH) before I got to it. Click here for my September 2011 initiation. The report particularly pleased me because it was a US company that had raised capital Down Under and ended up raising a whole lot more in the US after I did my work. CEO Dave Rosa, from Minneapolis, was a class act. This is embarrassing... One of the stocks I used to cover was the drug delivery company Phosphagenics (ASX: POH). Click here for my report from May 2011. I still like the company and I have high hopes for their current CEO, Ross Murdoch. Little did any of us know, however, that Ross' predecessor would go to gaol in 2015 for helping to loot around A$6m out of the company (click here for that story). While we're on the subject of the unexpected, let's talk about another company I used to cover, the Brisbane-based Alchemia. They had a clinical failure in 2015. Click here for my research report from four years before that inglorious conclusion. I remember that report well. I was in the office until 2 AM finishing it off. Maybe I should have gone home at a more reasonable hour. When you dive, dive deeply I developed the philosophy during my years as an analyst that when I wrote a report I needed to dive as deeply as possibly so as to have all the facts at hand. So when Michelle Miller at Biotron (ASX: BIT) spoke to me about the potential of her anti-virals to hunt HIV out of the monocyte-derived macrophages, I realised we needed a whole section of the report on HIV and the coming 'functional cure'. That's in an April 2012 report I wrote which was meant to be just about Biotron's Hepatitis C program (click here). I worked closely with Michelle during my 2013 gardening leave, helping to raise Biotron's profile. Basically she paid my tuition fees as an Investor Relations professional. I've had some great help in this business At Bell Potter I really enjoyed working with Tanushree Jain, my fellow healthcare analyst. She brought some really good modelling skills to the research. Click here for an example of her work in a report on Neuren (ASX: NEU) published in June 2012. I discover Orphan Drugs Neuren was an eye-opener to me because it taught me about the market power of drugs that serve small patient populations. Click here for a research note I wrote about Rett Syndrome in October 2012. Not all monoclonal antibody plays are equal One stock I spent a lot of time on which has yet to work out is Patrys, which in 2012 was working hard on difficult-to-manage IgM antibodies (click here). Regrettably, they never figured out how to make them properly. A star is born? I did a couple of ASX Investment Talks on biotechnology in March 2013 (click here) and in mid-2014 (click here). I raised my testosterone (knowledge) levels When I was looking at Acrux (ASX: ACR), a drug delivery company that had developed a testosterone spray and licensed it to Eli Lilly, I spent a lot of time investigating the health benefits of restoring circulating testosterone to normal. As I told Bloomberg in March 2013 (click here), I believed the 'snigger factor' was going out of discussions about low testosterone. My 2013 blog Click here for a Life Sciences blog I wrote while I was on gardening leave between Bell Potter and Baillieu Holst. I called it Australian Biotechnology Buzz in honour of my original newsletter but I only wrote about US-listed companies at that time. The post that attracted the most interest was No. 11 from September 2013, on Advanced Cell (click here), which subsequently became Ocata and early in 2016 was acquired by the Japanese pharma company Astellas. I got a lot of emails from Americans who followed that stock passionately. It showed me the emotional power of regenerative medicine. Some of my research from 2013/14 When I joined Baillieu Holst I started with ten companies under coverage in an overview document (click here) which I updated every now and then (click here). The exercise was a good one because I was able to develop a standard model platform which I had never had at Bell Potter. My August 2014 presentation at Canary Networks This is a presentation I gave while I was at Baillieu Holst entitled Things to watch in the Australian biotech and medical device space (Click here to download the PDF). Does anything in this game ever work smoothly? Click here for the report I wrote in March 2014 when Bionomics (ASX: BNO) announced Phase II data from its BNC105 vascular disrupting agent in metastatic renal cell carcinoma. A post-hoc analysis revealed various biomarkers that would help for patient selection, but the market hated the result because the top-line PFS data wasn't so hot. I learn about hair replacement and performance-enhancing medical devices Cellmid (ASX: CDY) is working on drugs that target midkine, a heparin-binding growth factor. A specialty of that companies, apart from the cancer applications of midkine, is hair replacement. Click here for my May 2014 report. Around the same time as the Cellmid report I also published on Rhinomed (ASX:RNO), whose nasal implant promised the kind of performance that professional cyclists used to seek with EPO (click here). They were still talking about my research after I was out of the game In May 2014 I had initiated coverage on a Melbourne-based stem cell company called Cynata (ASX: CYP), which was the first listed company in the world that allowed you to invest in the rise of iPS cells (click here for my report). That was the report when I said that stem cell companies in 2014 were where antibody engineering companies were in 1997. In February 2015, when Cynata reached a major milestone in their development, they kindly cited my research of the previous May (click here). I deep dive into e-health Medibio (ASX:MEB) is developing a new diagnostic test for mental illness with potential to become the world’s first quantitative, evidenced-based test for mental illness. I was skeptical when I was first introduced to this company, but became less so when I considered how far we've come with e-health in the era of the FitBit (click here for my October 2014 report). |
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