I just can’t believe it.
Even though my opinion about Benitec (ASX : BLT) and its management team is well known, and I was truly blown-away by the incredible announcement earlier this week of a pending NASDAQ IPO, I do actually want BLT to be successful. The cynical reader might find that hard to believe, but I genuinely do (no sarcasm). Frankly speaking, the Australian biotech landscape needs all the success stories it can get, I only wish it was because the offerings were a little higher quality. I am aware that Peter French has suggested to several people that I have some sort of vendetta (and that I am “unstable” … careful Peter…) but actually all I want is to see is some quality and maturity in our ASX-listed companies.
I don’t think that is too much to ask.
Yesterday I mocked Graham Kelly with an open letter because Novogen announced yet another mouse study to further underwelm and bore the shit out of us. However I truly did not think today that I would read that BLT has dosed yet another patient. Why? Because BLT is supposed to be past the point of amateur-hour publicity stunts and borderline continuous disclosure abuse (because dosing another patient in an allowed and disclosed clinical trial is not a price-sensitive event). I will even go so far as to state that BLT’s patient-by-patient rundown of its clinical activities merely reinforces the perception that this is a company run by a bunch of neophytes, micky-mouse executives that lack the sensitivity and sophistication to understand that the impact of their messaging is actually damaging to the reputuation of the company. This kind of behavior sets inappropriate expectations with investors and patients, dramatically limits communication options if something actually does go wrong and – for a fact – it turns off pharma partners. Peter knows this because he has been told by plenty of people, including potential development partners.
Worst of all, it doesn’t actually convey anything about the success or safety of the therapeutic.
So why do it?
Well, the answer is very simple. Peter French cares far too much about what people think about BLT and he panders to the frothy, fickle, and flatulant ASX retail investor base. I am sure he sweats and frets about postings put out by all those HotCopper and Sharetrader Forum lemmings… er… experts. I am sure he will respond in a nanosecond to shareholder queries if you drop him an email. The entire media and communictions strategy of the company seems to be about volume and noise, not content and quality, and this is a company that aspires to go forth and play in the big boy sandpit of NASDAQ?
I think not… and let’s face it, trying to primp your stock price at the moment isn’t going to make any difference. The cat is out of the bag.
The stupidest thing about these “clinical update” disclosures is that all it does is serve to remind the market – constantly – how ridiculously early-stage the company is. Even really exciting companies with game-changing technology (which BLT is not) generally don’t pull in $60m on an IPO with a mere six patients dosed. Does the company not realise that by engaging in this behaviour, it is setting itself up for a failed – or at least underwhelming – IPO? Six patients. I mean SIX. You don’t even give yourself the wiggle room to generalise your stage of clinical development when you are pitching the company. Can you imagine during a whirlwind investor roadshow, sitting down with a sophisticated fund manager and have him or her ask, “So Peter, have you dosed patient #7 yet?”. I mean seriously.
It just makes me cringe.
Overall this is behaviour that needs to change across the industry and it is redolent of the 2000-2008 ASX vintage where everyone was trying to make a buck out of their own personal brand of snake oil (though some companies like Novogen seem to have stubbornly stuck around, sort of like toenail fungus). Today, globally, biotechnology is an exciting and respected investment class, and if Australian innovation is going to stack up against the rest of the world, we need to start behaving like we deserve it. Today I am not going to be unkind to Peter French and write the kind of sarcastic and patronising ball-slap I wrote to Graham Kelly. The reason is that I actually respect Peter. He has done a remarkable job of massaging a turd into a bon-bon, and for that he deserves a modicum of admiration. Even getting to the point of of an S-1 (F-1) filing and getting a banking team on board is a fairly decent accomplishment that didn’t happen magically by itself. This is a man who is working hard for his shareholders, no doubt because he believes in his company. In fact, in my last biotech company I failed to accomplish what Peter and his team have done and so I personally appreciate how hard it is to get even this far.
Benitec, get your act together and start behaving like a grown-up company instead of a bunch of muppets. Start demonstrating to your current and prospective shareholders that you are worthy of leaving the ASX cess pool to join the NASDAQ big league on the other side of the pond.
Over and out…