Danger, will Robinson, Danger! My sensors indicate a seriously depressing company…
Anyone reading this who doesn’t get the reference needs to take an hour or so out of their life and get up to speed one of the greatest SciFi accomplishments of the 20th of century. Meanwhile, for all the rest of you sophisticates, this is a company that I would avoid at all costs. You will have noticed by now that there are a number of Australian biotech companies that simply piss me off. Either they are so unbelievably underwhelming that it boggles the imagination that they could somehow continue to thrive, like some sort of anaerobic bacteria feeding of fecal matter. Or they are genuinely good companies that sort of seem to succeed despite themselves – like Sirtex.
… and then there is MediBio, aka BioProspect…. aka…. er…
I was tempted to title this post “BioProspect : There’s Gold in Them Thar Hills” but then I realized that this would be unintentionally misleading for two reasons. Firstly, a bunch of idiots on HotCopper would read the post and get confused and frustrated when they can’t find the BPO ticker anymore (that’s because ASX:BPO no longer exists) and secondly because there is, in fact, no gold to be had. The last time I checked, this was a medtech company, but who knows what will happen tomorrow! I have previously singled out several companies that I consider to be extremely underwhelming and may have even alluded to their location at the bottom of the ASX dung heap. But for the rest of 2015, I will promise that there is no company that I will more scornfully consider than MediBio (ASX: MEB). In fact, if I ever lambast any other company, I will give it a rating relative to MediBio.
This is such a juicy turd of a company.
Let’s start with the name, because names are important. MediBio. Hmmm… when the current management team was sitting around late one night in their castle, high atop the Carpathian mountains, it was clear after a few bottles of particularly good Moldovan Fetească that the company needed a change of identity. Obviously having attempted a very wide variety of commercial initiatives, from oil exploration to animal nutrition, this was not going to be a trivial undertaking. One can imagine, in the intensity of the moment (with a large stone fireplace flickering in the corner and a few hunting dogs lolling about on a slighly frayed and moth-eaten Safavid-period Persian rug) that these ingenious people realised that since they had already tried just about every bloody industry under the sun, that they should stop pigeon-holing their brand and create a new category of industry. A hybrid, if you will. They might not have known what the actual technology was going to be but they were pretty sure it was going to be a medtech company. No, wait, a biotech company. No, definitely a medtech company.
Ah screw it, let’s make it a “medi-bio” company. Hey! That’s a cool name, let’s call it “MediBio”. That should appeal to all investors, right?
By the way, in case www.bioprospect.com ever significantly updates its web site (noting that no search engine really finds MediBio because it is still using the old BioProspect URL) I have copied their “about” page below. It’s priceless.
Notwithstanding that MEB is a company looking for a … er… product. Ignoring the fact that the MEB website actually doesn’t talk about “Products”, but rather “Projects” (because there is money to be had in projects, right. Right????). Ignoring the fact that this is a medtech company (even with glossy pictures of test tubes and biosignals on its website) that will also toss in a reserve estimation for a small oil patch in the Philippines. All this aside, the “Long Tail” is not about merely taking the mickey out of ridiculous commercial antics, I back it up with data and facts, otherwise I get sued.
In an ASX disclosure in October of last year, we have a glowing analyst report for MediBio. I mean, it’s glowing about the commercial potential of mental health solutions but very little of it is relevant to the company. Of course (as appropriately disclosed), Baillieu-Holst (B-H) had also raised some money for MediBio and was actively promoting the security, so obviously going to be a buy recommendation. In the coverage, MEB gets a speculative buy on the basis that “peer-reviewed papers have established the connection between heart rate variability and depression” and quoted a University of Sydney research psychologist Andrew Kemp that (in 2010) “a meta-analysis of depressed patients without cardiovascular disease that depression went with lower heart rate variability and depression severity was negatively correlated with heart rate variability.” The B-H research reports states that “Kemp et al were able to establish in 2012 that the reduced [heart rate variability] in depression was not driven by antidepressants, firmly establishing [heart rate variability] as a depression biomarker”.
But the validity of moving from a relatively small 73-patient study showing a correlation between major depressive disorder and heart rate variability, to a diagnostic using heart rate variability to diagnose depression has been questioned by several luminary academics, even Andrew Kemp! A separate paper studying 4,750 patients found that “Depressed participants not taking antidepressants (n = 317) did not differ from controls on any measures of [heart rate variability]” and concluded that reductions in heart rate variability in depressed older adults were driven by the effects of antidepressant medications”. This larger study, entitled ‘Antidepressants strongly influence the relationship between depression and heart rate variability: findings from The Irish Longitudinal Study on Ageing’ was published in Psychological Medicine in July 2014.
I’m confused, which is it?
I should note that B-H no longer covers this security, at least as far as I can ascertain.
For everyone who got lost in the above meanderings, don’t despair. It also took me several hours to get my head around it, but the basic message is that the only thing we can really scientifically glean from less crazy heart antics, is that the individual is probably on anti-depressants. And we already know that because they are sticking at least 100mgs of Sertraline in their mouth every day (with all the unpleasant side-effects, including loss of libido which certainly evens out your heartbeat!). Therefore, the MEB concept of a watch/software/doodad that quantifies depression is probably baseless at best and stupid at worst. And don’t get me started about the loss of specificity of single-lead ECG measurements (i.e. what you get with a watch/doodad). The tragedy of all this is that we actually do need better diagnostic tools for mental health, and mental health is extremely important. If something like this worked, it might even help to de-stigmatise mental health. I would personally care a great deal about a technology that could help quantitatively manage the challenges of depression, as well as more accurately measure the response to therapy/dose-escalation of things like SSRIs.
So I have a bet to make with the board of MEB / BioProspect. Moreover, I am offering this bet in public.
If you release a regulatory-approved diagnostic product by mid-2015 as promised on your website (let’s be flexible and say by the 1st of August) and I can buy it and use it (i.e. wear it on my wrist) then I will stand at the York St. entrance of Wynyard Train Station in Sydney-town from 9am until 5pm in my underwear (irrespective of weather) with a sign around my neck saying “I was wrong about MediBio and I am sorry.” I will also buy a bottle of 2009 Henschke Hill of Grace for each member of the management team and board, and deliver it in person (in said underwear) at the end of a long day of personal humiliation.
However, if MEB does not meet this deadline, then the board agrees that they will surrender the company as a public shell and actually agree to put some very sexy (proper) diagnostic medicine assets (that actually work) that I am helping to spin-out of a luminary Australian university into the company, and stop this ridiculous charade.
I am not joking, either.
You are all witnesses…. you bubble-headed boobies!