Reply to:Glypromate Fails Phase 3

I recently had a comment on my previous ‘ Glypromate Fails Phase 3‘ post.

‘Seriously Graeme, couldn’t you see this coming years ago? Neuren is one of NZ’s leading Biotechs? I want you have been smoking, the demise of Genesis and anything remotely linked to any of it’s former employees is enough for any potential investers to run a mile let alone invest in ANY listed NZ biotech company albeit on the ASX or anywhere offshore.

$1.3 mill for a biotech with a so-called pipeline of 6 molecules that someone else has already written off? Puh-lease, you have better chance of making money investing in a non-existant Lehman Brothers’

I spent a bit of time constructing a reply so I thought I’d make a post out of it.

Reply:

Thanks for your comments.

I have had my concerns regarding the direction and operation of the company but I will keep those reservations to myself. Considering that $3 million in Aug 6th 2008 and another $2 million in Sept 30th 2008 was invested apparently shareholders didn’t see things coming either.

Regarding Neuren as a leading NZ biotech– Let me reminder you that they were the only NZ biopharma with a drug candidate in Phase 3 trials, quite an achievement in itself. However there are also a series of other leading NZ biotechs/ biopharmas such as KODE Biotech, Aquaflow Corp, Lanzatech, Zygem, LCT and Proacta (most likely NZ’s next Phase 3 experience with PR-104) that deserve mention.

The fall of Genesis has been…preventable? Probably? A complete failure? Definitely not. During a Chiasma event last year Jim Watson highlighted a very important point regarding measuring the success (or failure) of Genesis. He referred to the employees and students that have passed through Genesis as a vital contribution to NZ’s growing bioeconomy. These are likely to be a group of individuals hardened/experienced to the realities of corporate biotech (due to poor management? Possibly). I also believe you would be hard pressed to find any biotech in NZ that doesn’t have an ex-Genesis employee in it these days. In fact there are a few ex-Genesis employees who are now leading their own start ups which have recently attracted funding.

Some of the ones I am familiar with include:

Keith Hudson – ex Research Leader at Genesis and now founder and CSO of Androgenix who have raised $1-1.5million in Aug06 and >$2.5million in June 2008

Sean Simpson – ex Senior Scientist at Genesis and now CSO and founder of Lanzatech which has attracted funding from Kholsa Ventures , Stephen Tindall, Cranleigh Merchant Bankers, VIF, Pacific Channel and FRST totalling >$15million

Neil Domigan – ex Commercial Manager and Head of Business Analysis at Genesis and now CEO of Ingredient Solutions currently seeking an ambitious $27.5 million worth of investment. The latest update being that a North American investor has issued a statement of intent to purchase 40% of the shares. Neil is also Commercial Manager and a Director of EcoDiesel which has risen >$2.5million.

Paul Tan ex Deputy Director and Head of Health Division at Genesis and now CEO of LCT which like Neuren raised money on the ASX ( AU$15 million)

So in fact all hope is not lost. Investors are coughing up the dough for NZ Biotechs whether or not their management team has originated from NZ ‘failures’.

Keep in mind Neuren recently purchased Hamilton Pharmaceuticals including their late Phase 2 drug candidate, Motiva. And with the amount of money being thrown around by big Pharma recently AU$1.3 (now 1.54) million for a pipeline with two Phase 2 candidates is a pretty good gamble.

To sign off….Biotech is a tough game with dodgy politics and management, lemon drugs, stringent regulations, the constant need for money and a developmental route that can kill your product/lead dead at any stage. If you don’t like it, get out and play a different game.

____________________________

Graeme @ graemefielder.com

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