When I launched this site, I wrote a very extensive and passionate analysis as to why I was doing this. I don’t think anyone read it, but if you want to read it you can still find it here.
In a nutshell, I think we can do better. Australia has very decent biomedical research, plenty of smart people and lots of good ideas. The best ideas currently go overseas because there is this pervasive belief that there is no capital, and no commercial leadership here at home. Yet, plenty of small public companies raise hundreds of millions of dollars every year. In effect, the Austrailan Securities Exchange (ASX) has become a domestic substitute for venture capital. I also think there is no shortage of human capital either.
We have about 150 ASX-listed companies that are broadly classified as “healthcare” (including pharma, biotech, medtech, health services) and while there are a few good companies, most of it is poor quality. Until we clear out the garbage, enable the market to transparently identify what are good opportunities and what are not, we limit the momentum for new (quality) offerings to tap the public markets for early-stage capital. Even worse, underperforming equities actually spoil it for everyone else and there is little doubt that most pools of capital in Australia don’t consider ASX biopharma to be investment-worthy.
A real tragedy for the future of our economy.
Moreover, I am increasingly of the conviction that private equity ownership and capital intensive / long horizon investments like biotech are a poor fit for each other. Therefore if we had an efficient and quality public market, where share ownership can change over time and fundraising (for quality deals) can be fairly rapid, this could be transformational to Australian biomedical innovation. Unfortunately, right now, the ASX healthcare / biopharma sector is a bit like a murky dam on some remote outback farm. It’s muddy, it’s infested with tiger snakes and yabbies, and nobody in their right mind would swim in it.
This site is an attempt at some objective “buy side” commentary (noting that this is not a financial advisory site) in the hope is that it can help – in time – to clean out the swamp.