The Long Tail : Launched

Dear Reader,



Before I begin – please refer to the site policy and disclaimer for “terms of use.” This is important because some – not all, but many – of these posts will relate to publicly traded securities on the Australian Stock Exchange (ASX) and it’s important to understand that this website is a discussion forum, not a vehicle for financial advice or spruiking financial products.


This is an exciting moment for me, and I would like to share it with you.

Over the past 5 years I have encountered many Australian life sciences entrepreneurs looking for capital and clinical partners on both sides of the Pacific. I think Australia has a lot of potential for healthcare technology commercialisation but only if we invest effectively and if our public markets are quality, efficient and informed. You can read the “thesis” about why I believe in this potential in the “About” section of this site, I will not repeat it here. My objective is simple – to provide an independent and reasonably informed opinion about what I think of our life sciences ecosystem, particularly the microcap stocks that are traded on the ASX. Government policy, venture capital movement and the accomplishments of Australian researchers will also feature because they are probably relevant to how the overall system evolves in the future.

I want to state clearly from the outset, this is not a crusade. My actions on this site are based on my intrinsic belief that Australia really can be a world-class life sciences cluster – meaning healthcare services and IT, medtech, biotech, pharmaceuticals and even really future-looking areas like nanomedicine. I will admit I am also a bit partial to the potential of agricultural biotechnology – our planet has a lot of mouths to feed and we have some very smart minds working in this area. But I also don’t have any tolerance for bullsh*t, and there are a lot of dubious claims being made that are not disclosed in the best interest of the public / public investors. I am willing to directly but appropriately query those claims and if you I agree, I would like to receive your support. If you disagree I would like your structured and constructive feedback as to why. This will hopefully become a discussion forum, where a collective voice creates value and not just my own.

I am also not a perfect authority (unsurprisingly). As an entrepreneur, I have experienced a lot of different aspects of this industry but I will inevitably get it wrong at some stage. If I do, I will correct it, and I am sure you will remind me with vengeance.

The name of this blog – “The Long Tail” – could have just as easily been coined the “Tall Tale”. Australia definitely has some companies that are nothing more than a good story, though we also do not have an international monopoly on poor quality firms. However it is the “long tail” of the ASX that I am really interested in, the micro-cap (nano-cap?) companies that have used the ASX effectively as an alternative to venture capital. As such you will probably will not see much coverage of CSL in this blog. I used to think an ultra small-cap public market was a dumb idea but increasingly I believe that the investment horizons for new healthcare technologies are a poor fit with private investing, especially in Australia. Therefore, if this web site can even do a small amount to inject enthusiasm and discussion around the state of the industry, then it will have achieved its goal of helping to put some momentum into changing the way we think about this sector.

Thanks for reading…

Chris Behrenbruch

6 thoughts on “The Long Tail : Launched

  1. Hi Chris, this is a much needed blog. I’ve been very impressed with your objective and thoughtful comments to date. My position is that have reasonably good expertise in investing, have been looking at Aussie biotechs for a few years and am keen to absorb more technical knowledge, mainly because some Aussie bios seem undervalued compared to their international peers.

    Hotcopper is a weird and amazing space. Sometimes there are posters who obviously know their stuff: otherwise it’s a diverse bunch whose motives for posting and levels of expertise vary considerably (to put it politely). Quality stocks seem to attract quality posters; flakier stocks seem to attract the flakier posters. Some of the recent flavour of the month bios have attracted people that perhaps shouldn’t be let out after dark. I’m thinking of Novogen, Cynata, OBJ, Phylogica – all of which I’ve thought about as an investment but something has held me back, for some of those your blog has expressed my worries very eloquently, and much better than I could have done.

    Mind you if you think the bio threads have a low level of debate, keep well away from the resource threads, therein lies madness, especially after the commodities shakeout….and as for the yahoo message boards…nuff said.

    But one thing that always amazes me is the reaction of the stock cheerleaders to anyone who even questions their favourite, as in the CYP squad to your comments. Personally I’d be grateful, I’d even pay, for advice that made me question my investment, especially if it helped me avoid losing money. But no, they’ll ride a stock all the way down, vehemently proclaiming it as a “strong buy” , and abusing anyone who questions that, until they are never heard from again.

    So please keep up your good work. Personally I have three stocks that I’m invested in. These are Viralytics VLA (good science, good management, good trial results, but if so good why haven’t they found a partner yet, esp given your comments about oncology combination trials), Anteo ADO (seemingly disruptive nanotechnology but again why so long to commercialise it) and Neuren NEU (good p2 in Retts syndrome and three other robust p2 trials ongoing, great management, if they nail this it’ll be a blockbuster, I think…)

    So if you ever get a chance, any passing comments on these would be gratefully received. I promise not to tell you to F******f****off as a poster on OBJ replied to someone who raised a mild objection. And if it saves me a loss I’ll come over to Aus and give you a big hug, or not as is your wish.

    But anyway please keep this up. Look forward to reading more.

    Regards, Peter

    Liked by 2 people

    • Dear Peter,

      Thank you for your supportive comments. I have received a lot of abuse the past few days, but I am ok with it. As soon as someone sends me some witty abuse I will publish it but telling me to “f**k off” isn’t terribly imaginative.

      I am trying to be as objective and constructive as possible, so thank you for the feedback.

      Regarding your stock picks, I don’t really pass comment on whether a particular stock is investment worthy or not. However I do think that VLA is a little better than most early-stage companies out there, mainly because it is truly executing on clinical development. I also don’t think it is over-priced relative to stage of development. In my opinion they will struggle to find a partner because intra-tumoral products generally struggle to excite oncologists (especially given the metastatic nature of melanoma) and oncolytic viral strategies have kind of come/gone – a few times! Having said that, it could be that with the new era of immuno-oncology, something like CAVATAK generates more interest. I’m a little skeptical though.

      Regarding ADO, I am generally not that enthusiastic about the company. Functional / specialty coating technologies are extremely challenging to commercially develop (I speak from personal experience with a failed attempt a few years ago) and I don’t see a business model that warrants the current valuation, at least based on the last two years of annual reports. I’d love to talk to Geoff Cumming at some point and understand what the bigger vision is. I’m probably missing something.

      I think NEU is “ok” as a company, there is some reasonable science behind it and it is executing. The challenge is that people seem to have forgotten about some of the prior failures in their consideration of where the company is going and the validity of it’s technology. From a corporate governance vantage point, I think they do tend to gloss over a lot of the challenges they have had – even with NNZ-2566. It’s going to be a binary event and you will know by about July!

      Warm regards,

      C

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  2. Pingback: The Long Tail : 21 Posts Later… | The Long Tail

  3. Chris, I feel fortunate to have found this site as I have recently been investing my hard earned income into this sector. It seems almost an impossibility to determine fact fiction or real relevance in many of these Companies. Besides the top10 Healthcare & Biotech listed Companies can you list some sm-mid Companies in this sector that in your view have healthy prospects for growth & real commercialisation.
    Thanks

    Like

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