Ignore the fashion victims and know your strengths, says Maxygen chief

Idiosyncratic researchers who are stubbornly out of step with the fashions of science may be among Australia's more valuable assets when it comes to building a successful life science industry, a briefing in Sydney heard today.

After all, as expat Australian Russell Howard, now CEO of Californian biotech Maxygen told the Australian Venture Capital Association briefing, the originator of Maxygen's technology was just such a "crazy, self-opinionated but brilliant" individual.

Howard described that technology as "molecular breeding" -- breeding genes rather than organisms -- and Maxygen has used it to grow from an unfashionable upstart to a Nasdaq-listed company capitalised at US$347 million, which counts Roche, Aventis Pasteur, Interment and ALK-Abelló amongst its partners.

Based in San Francisco, Howard is on the board of the Institute for Molecular Bioscience in Brisbane, and returns to Australia several times a year.

While praising Australia's research strengths, Howard said the tyranny of distance and the limited investment capital available here had the potential to hobble the local biotechnology industry. He also pointed to "a tragic lack of mezzanine financing in Australia".

Listing on Nasdaq in the halcyon days of the tech boom, Maxygen was able to bank considerable funds, as well as secure grants from such obscure sources as the US Defence Advanced Research Projects Agency (DARPA) to see it through current, leaner times.

Maxygen's investors now include a number of high net worth individuals whose confidence and largesse is maintained by regular briefings -- another advantage, Howard said, available to a US-based biotech. But "pharma is cyclical", Howard pointed out, and although today companies must be far more mature to achieve an initial public offering in the US, the pharmaceutical industry is "on its knees" and will rely heavily on biotechnology to continue to meet its profit targets.

Meanwhile, Australian biotechs must be nimble in hawking their wares to those companies in both the US and European markets.

"Do your research and discovery here, and clinical development here, but [you need to be able to] talk to investors and do deals in the US," said Howard. "You should have two feet on the ground: one in Australia and one in the US."