'Without partners, you are dead'

US venture capitalist Osagie Imasogie told AusBiotech 2005 that biotech companies need to get aggressive when it comes to finding opportunities.

The theme of AusBiotech 2005 was 'Linking the Region'. But, US-based lawyer and venture capitalist Osagie Imasogie would like to ask you, what do you understand by 'region', and how widely do you define it? Is it purely geographic? Or is it also commercial and opportunistic?

"'Linking the region' is more than just geographic," Imasogie argued in his presentation at the conference. "It's more than just a concept."

What it requires, said Imasogie, a lecturer in law at the University of Pennsylvania as well as a principal of Philadelphia VC firm Phoenix IP Ventures, is innovation. By way of example, he talked about one of Phoenix' investee companies, iCeutica, the developer of a drug delivery technology.

It's a long way from Perth to Philadelphia, but that didn't dissuade iCeutica CEO Matt Callahan when he was doorknocking for equity finance in the US.

"iCeuetica's technology is derived from mining," Imasogie said. "Its founders applied it to biotech in a very elegant manner. They are wiling to entertain new ideas and maximise the value of their assets.

"As a rule we do not invest in companies -- we invest in people. Matt Callahan tried to reach us through a friend. When he finally got me on the phone, I was on the road, about to fly to London.

"Matt said, 'I'm in California -- I'll fly to Philadelphia, meet you at the airport and fly with you to London. That way I'll have you for six hours'," Imasogie said. "With that kind of clarity of focus, that kind of chap will always make money."

The result, Imasogie said, was that while iCeutica is a small firm, with people in Perth and Melbourne, it is now playing in a global marketplace.

"Another way of thinking about linking the region is success through innovation and partnerships," Imasogie said. "Who cares about biotech? The reality of life science right now is that large companies, like GlaxoSmithKline, have been extraordinarily successful. Big pharma will continue to be successful with what it's doing. But they have challenges in maintaining their productivity, and as long as there's a challenge, there are opportunities for biotech.

"The Australian biotechnology industry should be thinking aggressively about those opportunities. But you have to be innovative, and without partners you are dead."

Imperative for change

Big pharma has industrialised drug discovery so much, Imasogie said, that is was now at the point where "we've generated high value of the same thing". And it isn't risk-proof.

Events like the Vioxx withdrawal have shown that even after a large drug firm has launched its multi-billion-dollar blockbuster, there is a risk of failure, Imasogie said, quoting a Chinese fortune cookie: 'Whatever was sufficient to get us to this point is insufficient to get us further'.

"There is imperative for a change," he said.

Imasogie said it was important to remember that every company that was currently doing something significant in drug discovery was a small company. "And who acquires them? Big pharma, and they're writing nice big cheques for it," he said.

Biotechnology is good at several things, he said, that help big pharma meet its productivity challenge, including the application of innovative technology, and capturing the potential of the human genome. (One colleague, he says, remarked when the human genome was sequenced that it was like "getting a list of all the components of an internal combustion engine and giving it to Fred Flintstone".)

Challenges for minnows like Australia, he said, would come from other countries in the region like China and India. "They are smart, focussed, hungry and aggressive," he said. "I was in India eight times last year. It shows you can do world-class science anywhere in the world -- that's why it's called world-class.

"But if you cannot find a way to finance, you are dead. Capital is important and it must be risk capital -- and it must be smart money."