Coverage in The Australian

Interesting commentary by Rebecca Urban in The Australian this morning. A big thank you to the hundreds of people from the Australian biosciences industry who reached out in personal support over the past few weeks.

I actually wish Chris Roberts every success. Notwithstanding my views on the product, if anyone should be able to fix the company’s corporate governance, it’s him.

Good luck!

PS: Next time, perhaps some basic diligence before joining a board? For example, asking whether the company has any active or pending lawsuits…


14 thoughts on “Coverage in The Australian

  1. Pingback: Competing for Capital? Absolutely. | The Long Tail

  2. I appreciate the work you do and think it’s sufficient to disclose any interests you may have as you do. The investment community is better off for your analysis, and that will always upset some.



  3. Rebecca Urban’s article in The Australian (27 January 2016) is a well written piece and tells it like it is – not only for the OSL / Chris Behrenbruch / Forrest Capital saga, but for what we suspect happens behind the scenes of so many of the smaller listed companies. The big end of town tries to muscle in on those with contrary opinion to shut them down while ignoring the “disarray” in their own boardroom and the elephant in the room.

    Everyone with an understanding of clinical medicine accepts that OSL have an unproven product / concept – and need to establish with proper scientific technique that OncoSil works in pancreatic cancer and liver cancer. This will take time and money. The problem is that a lot of time has slipped by since the first derailed Australian trial, and Joe Public is not really sure what is happening, other than they are waiting for the CE / IDE approvals to move forward.

    Like many scientifically based Biotech investors that I speak to, we share ASXLongtails views that were so well outlined in the OSL apology ( Having said that, in the “OSL apology” all of the risks are not covered. All possible new treatments can fail especially in the are of cancer medicine. It may be toxicity, patient selection, lack of superiority (e.g localised pancreatic cancer is probably still best addressed surgically provided comorbidities allow), or perhaps even having a negative effect on the positive effects of chemotherapy. We don’t know as the trials haven’t been done ! We need to see the trials and accept the investment risk is higher at the start.

    This current clash is mainly because OSL has not made their targets of achieving a CE mark in October / November. ( The response by the company to tackle the issue legally would suggest that it hasn’t all been smooth sailing for the apparent certainty of approval. Doesn’t the market have the right to know what the company knows ?

    I am puzzled (and suspicious) as to why OSL hasnt addressed the issues in any way other than a legal and attempted intimidation manner.


    • Hi bjs34,

      As you know, I have committed to no longer commenting on OSL but I do share your viewpoint on localised treatment in pancreatic cancer. There are three facts that guide my position:

      1) Determining the extent of disease in pancreatic cancer is a fundamental clinical challenge that is still poorly resolved. Panc ca patients typically present late and with advanced disease. A substantial percentage of new patients are opened in the OR and the closed again because the extent of disease prior to surgery was not fully understood. Therefore taking the position that an intra-tumoral injection of a therapeutic product is a robust strategy in this cancer setting, is fundamentally flawed – even if performed in the OR (and as we all know, many surgeons don’t like handling significant radioactivity in the OR either).

      2) If I – or a loved one – had “localised” pancreatic cancer and I had a choice between an intratumoral injection of a therapeutic product and a radical resection, I would take the latter any day of the week. The probability that, despite a clinical assessment of localised disease, there is already lymphatic metastasis (often also hard to fully evaluate in that part of the body because malignant nodes don’t always present as enlarged) is very high due to the aggressiveness of the cancer. I don’t think many panc docs would even remotely consider this option if they thought Whipple/duodenectomy had a fighting chance of heading off the cancer “at the pass”, notwithstanding the enormity and invasiveness of that surgery.

      3) The original work in P32 colloid intratumoural injection was promising because it would not only irradiate the tumour, but the colloids would migrate to nearby lymph nodes (a nice paper showing this in pre-clinical models, as well as a good summary of clinical experience at the time, in the discussion section). With other forms of localised brachytherapy, this doesn’t happen, and therefore what is the point? There is no point.

      Time will tell. I am happy to be proven wrong. If any panc oncologist reading this wants to write me a critique (positively or negatively) I’ll pick up the tab for a day of consulting. You’d be doing everyone a favour – especially patients, if I have really got this wrong.

      Thanks for reading.


  4. Hi Chris,

    As a retail investor (or punter and/or schmuck) in AUS biotech, I am very happy to have discovered your website via the reporting in The Aussie of your exchanges with OSL’s “brain trust” and legal “eagles”. I think it’s hilarious that their actions will have given you a far wider audience with us retail mugs, in addition to your existing and relatively informed cohort – from what I have read in the comments. It’s good to be able to read some independent buy side analysis and commentary as an antidote to the broker/merch banker sponsored tosh that often passes for research.

    I’ve been a dabbler in biotechs over a long period (I’ve just checked my records and my first purchase of Starpharma was 2003), I’ve had a few wins and losses over that time but never the 10 bagger that we all dream of. While on SPL I was amused to read your comments regarding Dr. Jackie Fairley’s exceedingly generous remuneration packages over the years (are all vets allowed to call themselves Dr. nowadays or does she have a PhD? If so I’ll have to start calling my tree surgeon Mr.) as I recall writing to the company secretary many moons ago querying a options package for her that didn’t appear to have any performance hurdles specified. Lets hope she can finally monetise some of the research us SPL investors have funded over the past decade and give us some return on our capital. I did manage to avoid the recent $.73 rights issue/capital raising that will no doubt pay for a few rounds at the next SPL office christmas party, I guess it’s a good thing I am not a “sophisticated” investor.

    As a a long term holder of Alchemia I was very sad to see them apparently throw in the towel after the HyACT phase 3 schmozzle and effectively liquidate the company, and I’m very disturbed to read that ACL executives appear to have cherry picked the VAST platform from the wreckage and are paying a fraction of their own (be it earlier) valuation for the privilege. Do you think there will be any residual value left in ACL after the 9.3 cent capital return next month?

    I also have an interest in Acrux but can’t find much in the way of comment on your blog, and one right out of left field that your readers may find interesting is TFS corp. (TCF is the ASX ticker for some reason) who are an integrated grower, processor, distributor and marketer of Indian sandelwood products with phase 2 & 3 trials for sandelwood oil in dermatological applications, who are supposedly making money and are also currently being beaten up on the market for some reason.

    I try to adopt a mindset of a value investor and have a reasonable handle of financial analysis but the technical side of biotech is mainly beyond my comprehension so it’s great to be able to read both your and your learned contributors comments, so I hope you keep up the good work and may the litigious lawyers and their clients disappear up their respective fundaments.


    • I see no conflict of interest. I’m all for someone putting their money where their mouth is. It is refreshing to see an industry commentator stepping up to the mark. Handing out positive and negative criticism/feedback is easy. Taking it on the chin along with the pats on the back is commendable.


      • It’s been interesting to see how different the ASX environment is from NASDAQ. I think until you really get your hands dirty, it’s hard to fully appreciate the impact of a retail-centric investment environment.

        Thanks for reading.


    • Dear Mr. Allrighteous,

      Firstly, one of my great personal regrets is that early in my writing I referred to the retail investor base as “punters” which has in turn propagated some misconception that I have a disdainful view of retail investors. I don’t. It’s just that I view many ASX bioscience stocks as having no underlying investment thesis and therefore they are truly “punts”. Anyone talking up share charts, and “support” and “trends” on HotCopper is clearly skilled at the art of share movement analysis but that is not really investing. It’s more like in-play betting. So there are no “retail mugs” in my book.

      SPL is an interesting one. Although multiple people overheard Jackie and Martin Rogers bitching to each other at JP Morgan cocktail parties about Long Tail “criticism”, the companies that the respective executives manage are night and day different. SPL could really be a very good company but it’s leadership is weak because it can’t discipline itself to deploy shareholder capital where it is ultimately going to give the biggest return. I may yet be proven wrong but ploughing ahead with the R-BV Phase III is basically clinically and commercially unfounded, and yet the company may actually have a lasting story in cancer. I don’t have any issues with Jackie – I have generally refrained from commenting on whether she is a good CEO or not – I just don’t believe CEOs should get rich ahead of shareholders.

      Alchemia is very disappointing. I purchased a few shares in order to attend the AGM meeting and ask some questions. I saw a tired and “end-of-the-road” board that basically admitted to be dysfunctional. Frankly, it was one of the most personally underwhelming information gathering moments because I was actually shocked by Nathan Drona’s candour that the board hadn’t pulled together as good as it should have. I went in with the idea of asking some pointy questions but frankly, lost the steam. After payout, ACL is going to just become a shell for another company. I have put some ideas forward as have others in the space that I think have good brainpower. We shall see what happens.

      As for Acrux – I don’t really know what to tell you. The last couple of years have seen a massive amount of value wiped off the company. Acrux is an activist investor’s dream because it actually has the potential to turn into a growth engine, it just doesn’t have the mojo in the team to make it happen. I have refrained from commenting on it because I think its performance speaks for itself. I also think Tim Oldham (NED) is one of the brights spots of thge ASX bioscience boardroom and so I struggle to motivate the vitriol to sling mud. Any board that was smart enough to hire him, can’t be completely stupid.

      My technical analysis is not flawless but within time/effort constraints, I think it is adequate. Contrary to assertions, I do pick up the phone and call docs. I am not an MD and although I am a bit of a technology nerd, sometimes my own biases get a pretty resounding recalibration from those that have to deal with patients. I wasn’t personally cut out for med school (which is why I did a lowly Ph.D) and so that is often the voice of authority for me.

      Thanks for reading.


  5. Hi Chris,

    As always a huge thanks for your analysis, clearly hit a raw nerve! Looking forward to an even bigger 2016 (if your blood pressure can take it!)

    All the best



  6. Firstly I want to congratulate you on being brave enough to publish your views. The fact that you are a company director of a listed ASX company has no bearing on your right to publish views – especially on an industry you have knowledge of.

    My personal view of the ASX is that as an investor for almost a decade in this market I am surprised that the failures are not investigated more rigorously – It seems ( to me that is) if you are not a high profile company or there is still money to be spent on the investigation by the administrators then in fact nothing is ever followed up. Personally I think we need a better guideline for ASIC to operate in and more of a police type investigative operation funded in part by a fee for all public companies based upon the tiers – unlisted public , listed public and large listed public.

    Its not surprising that the legal profession have taken the ball and now they pursue companies and their directors – however that works only if money is there to pay for that. So the company director who wants to avoid that only has to make sure there is no money left to avoid these breaches.

    Its amazing (my opinion) that a company can get a judgement against a former director for funds the company spent on what is his family yacht but that the director does not get charged with fraud.

    I think that Biotech is definitely high risk high reward and only by sharing opinions can you try to understand many of the investment propositions. They are probably harder to get advice on than explorers as there are metrics you can measure those by.

    I was pleased to see your red, amber, green list as it formulated some of my thoughts on some that I have invested in.

    I am appalled that directors or other parties seek to use a legal system to silence opinion. We should follow the USA more closely so that you can truly have freedom of speech as long as its about the company. Personal attacks are not necessary.

    So I hope you keep it up or at the very least that you take it private. I would even be happy to pay a subscription for it. Though I think most wont.


    • Thanks for the feedback – and “watch this space”, Joe.

      I do think that there are two consistent pieces of feedback, yours included:

      1) Commentary is fine, so long as it is “professionalised”.
      2) Retail investors probably wont pay for research.

      That’s valuable insight.

      Thanks for reading.


  7. Interesting posts in response to this article… and it highlights what we need in Australia !

    We need Biotech activism to be able to tackle the ASX listed biotech companies and those who finance them. Sometimes, there can be barriers that get in the way of what is best for the shareholder / retail investor or even the fund manager !

    Carl Icahn is a good example in the USA – but I am sure there are other examples… Someone to represent the shareholder…


    • I agree bjs34,

      Absolutely agree that we need more activism – and activist investors. It’s not very “Australian” but it’s badly needed, especially in this sector.

      However, to be honest, as I read (and chuckle) at all the morons on HotCopper this evening taking turns to poke me in the eye and discredit my “worthiness” to comment on certain companies, the truth is that many retail investors don’t want information to make good decisions, they just want to throw the dice on the basis of sentiment. When sentiment turns then everyone gets their axe out instead of going back and looking at the company itself, like the disclosure history, the promises made to shareholders and the intended use of capital that simply never made it to fruition. I can activist all day long but if people are too “invested” to even consider an alternative opinion, it’s hard to get wildly enthusiastic.

      Thanks for reading.

      Liked by 3 people

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