A bookmark in history

Steve Burrill, long time money man for the IT and biotech industries, visited Australia last week to raise $200million for a new biotech fund. He described this decade as being of such importance that it will be remembered in 1000 years' time. ABN met with him, and asked why. Jeremy Torr reports.

"If we could go 1000 years into the future and look back, we would see our present time as a bookmark in the history of man. In the year 3000, they will look back and say 'that's when they sequenced the human genome, that's when we started to have a molecular understanding of life'."

To say Burrill is missionary about biotech is to understate the case. He infects his audience with enthusiasm - in this case a room full of fund managers and brokers from the ASX invited to get a handle on biotech investing - and brings an approach which is both pragmatically capitalist and humanistic at the same time.

CEO of Burrill & Company, self-described as a Life Sciences Merchant bank, Burrill came to biotech after 28 years with Ernst & Young, where he serviced clients in the biotechnology, high technology and manufacturing industries worldwide.

Burrill's breadth and depth of knowledge of the industry he has been working in for the last thirty years is impressive. Moving from the silicon chip industries in the early days, he assisted in the start ups of many of the earliest biotechs such as Genentech.

Since then, he has seen many rises and falls in the industry, but has positive words for potential investors in what he sees as a heavily under-invested industry. In fact, he goes as far as to say that people in the industry today are very lucky to be here and have the biotech opportunity presented.

"Australia offers a good opportunity to investors. It has a very competent and effective stock exchange, it has the skills and it has the education. What we can offer is the partnering skills to avoid some companies that would otherwise go public from offering an IPO too early.

"Many companies seem to have gone public too early, mainly as a result of there being a small investment pool. The problem then is that with biotechs you often need deeper pockets than the public investor is willing to offer. That's a problem," he said.

Local Fund

Burrill's mission here is to raise US$200 million to invest back into local biotechs, and to help solve that problem. It will also to give the opportunity for investors to spread money into overseas, quality companies.

"We will be putting US$100 million to work here in Australia, and the same amount for international investments," he said. "We came to Australia for this because we wanted to go outside the US, and because we looked at Europe but it currently has poor exit opportunities," he said.

One of the main foci of the fund would be in what Burrill termed "theragnostics"; the coming together of diagnostics and therapeutics into a personally tailored, personally delivered regime for ensuring good health.

He also put forward the theory that future developments would concentrate not on helping people to rid themselves of the causes and symptoms of disease, but of the diseases themselves. "We will be treating wellness, not disease. If we can develop our science to be able to say: 'you are likely to have breast cancer when you are 56', that will be so much better than simply treating it when it arrives," he asserted.

Taking stock of the market overall, Burrill was confident of the future as an investment vehicle, saying that not only would it be possible to make a major contribution to world health, efficiency and food production - it would also be possible to make a lot of money in the process.

"We will see a push towards personal medicine, and better agriculture, energy and environment (care). This will offer some major business opportunities. The move from medicine towards non-health care will be huge, as we move the way we look as illness and disease," he said.

One of the biggest changes envisaged is the way treatments and therapies are developed for the sufferer. Today, most discoveries are accidental, he noted, but the sciences of proteomics and genomics will allow researchers to work from the disease back, and to treat the course and development and the emergence of the disease.

"Blockbuster drugs are on their way out. We will be looking at new personalised cocktails that will help stop (diseases) before they happen. We are already seeing major breakfast cereal makers looking at how to include Alzheimers prevention in their products.

"This is extending to agricultural companies, to health care companies, general food companies - they are all getting in," he asserted.

Market in Oz

When it came to the local market, Burrill was complimentary, but not afraid to make some frank assessments.

"This is a global opportunity, not just a local or parochial one," he said.

"Australia's problem is not scale, nor of technical expertise. But people here tend to think that once they have had an IPO they have arrived. That is not the case," he warned.

He asserted that too many biotechs in Australia go public too early, and equally many wish they hadn't. "The time to go public is when cash is cheaper on the market, and when your company can absorb the costs of disclosure that are required when they go public," he added.

He noted that at present there were around 300 biotech companies in Australia, but that there were still more startups than consolidation. This, he said was a strong signal of market growth, and of a great time to invest - as long as companies kept an eye on their cash burn rates. "And we have to be careful we don't become an industry of scientists morphing into entrepreneurs," he warned. "The quality of science here is first rate, but it's like (you) haven't realised the world is a level playing field.

"Also, disease has no borders, and the net has opened up markets especially for small things like drugs. Frankly, I'm amazed how little (biotech) activity there is in Australia given all these factors," he said.Maybe the scene will change with and extra US$100million on offer. We shall wait and see.