New Biota CEO speaks of road ahead

On Friday, Biota Holdings (ASX:BTA) introduced Peter Cook as its new CEO and managing director, replacing Peter Molloy. On his first day at the company, Cook spoke with Ruth Beran about his background, the future for the company and the similarities between orbital engines and biotechnology.

At the end of September, Peter Cook wound up his role as the CEO and managing director of Perth-based engine developer Orbital Corp, satisfied that he had done all that he could in the three years he was in the job.

"I had been taken into Orbital because it was burning a lot of cash," says Cook. "It was not in good terms, in a financial sense. There was a limited amount of cash left in the bank. It needed a really serious work-over."

By the end of the 2003-04 financial year, Orbital was in profit and cash-positive. "The skills that I had to bring to bear on the job had been done," says Cook. "The results that the board had wanted had been achieved and therefore it was time for me to go and think about the next thing to do."

Cook drove from Perth to his hometown of Melbourne. He hadn't been in the city more than two days before headhunters tracked him down. "I'm not sure you necessarily planned to get back into the saddle as quickly as this, but we've got what we think might be an interesting opportunity for you," he was told.

That opportunity was to head up Biota, which "was rather flattering," says Cook. "It couldn't have been better scripted if I had been a scriptwriter."

Healthcare career

His last role may have been as the head of an engineering firm, but Cook's background is in healthcare. He is a pharmacist by training -- he completed a Bachelor of Pharmacy in 1969 at the Victorian College of Pharmacy, and six years later studied for a Masters of Pharmacy and an MBA.

From 1976 to 1985, Cook held senior positions with Nicholas Kiwi (a diversified company whose output ranged from medicine to shoe care, later acquired by US giant Sara Lee), including a stint as director of R&D, and was later based in Singapore as the South-East Asia managing director.

He co-founded Invetech in 1987, then worked for a decade for Ansell Australia between 1990 and 1999, initially as group technical manager, then director research and development as well as president of consumer products and then president of protective products. He was a board member of Ansell International from 1991.

From 1999 to 2000, Cook was the CEO of FH Faulding's Hospital Pharmaceuticals, based in Adelaide.

While many of his positions were based overseas, Cook says that he has never really felt like he left the Australian healthcare sector. "I have almost exclusively worked for Australian companies offshore," he says. "I've really never lost contact with Australia."

Cook says that compared to the healthcare sectors offshore, the Australian sector is "not big" -- "I haven't always been able to make certain that my career keeps developing as quickly as I want it to in the Australian environment," he says.

'Different and more difficult'

Asked about his impressions of the Australian biotech sector, Cook has two general comments to make. Firstly, he says, there is a general lack of venture capital funds, which has driven biotech companies to become publicly listed earlier than they would overseas.

Secondly, the general environment doesn't make it particularly easy for products to get to market domestically, quickly.

"Both of these things make the Australian biotech sector different from that in other countries," says Cook. "Different and more difficult."

He believes that these issues are not well managed by some of the earlier-stage companies in the biotech sector, and "they involve casualties."

However, as a company in later stages of development, Biota has different challenges, says Cook. The company has technology that is known and proven. "What [Biota] has got to do is get that out into the marketplace and generate a revenue stream and profit for its shareholders in that," he says.

Cook says he wants positive cash flow for the shareholders sooner rather than later, but like any good biotech CEO he wisely won't commit to a particular date when that might occur. "Events always manage to displace even the best intentioned chief executives on timetables," says Cook.

Nor will he be drawn on Biota's ongoing lawsuit against GlaxoSmithKline, in which Biota is suing the multinational giant for up to $430 million, alleging Glaxo failed to promote and support anti-flu drug Relenza in the five years since it was launched.

Cook is, however, keen to continue to see an increase in Biota's share price, which has risen from below AUD$0.50 in June to above $2.50 in October in the wake of news that countries such as the USA, France, Hong Kong, and Germany are stockpiling Relenza, in the event of an influenza epidemic.

"It's nice to know that we seemed to have got past the bad times that were around a few years ago. There's been a nice recovery," he says. "The real issue is to make that improve for shareholders."

Cook is also conscious that "one of the problems of coming in when things are going very well, is that if they don't go well immediately afterwards, everybody looks at you and says that happened the minute you walked in the door".

Historical perspective

Relenza (zanamavir) is a neuraminidase inhibitor drug and at 58, Cook says that he is "old enough to remember the original discovery of neuraminidase -- who was around, who was doing it, when the appropriate receptor was being characterised and the 3D molecules that were being played around with to try and fit it."

Cook says he was attracted to Biota because "it is on the development plan but not solely with new innovation".

"The original technology is broad in terms of it is an antiviral, not just an anti-flu," says Cook. "There are some interesting things in the pipeline and it's always nice to have some blue sky as well."

Biota recently raised $31 million from a share purchase plan and will use the capital to move the company's preclinical influenza, common cold and infant bronchiolitis programs into human clinical trials.

Cook is quick to praise his predecessors and the board for getting Biota in a form that is well poised to bring the company into profit. He replaces US-based CEO Peter Molloy, who winds up at Biota this Friday.

"For reasons of economy, Biota wanted to bring in and consolidate research back into the Melbourne environment," says Cook. "Peter has been in the United States throughout and he could not practically come back to Melbourne and do what the board required of him."

Cook says Molloy has declared his intention to find some external board positions in the biotech sector in the United States, but "he will only pursue those when his responsibilities for Biota are fully concluded."

Orbital engines and biotech

Cook says that the processes of technology development and getting technology onto the market are relatively uniform over a whole range of businesses. "Everyone in the biotech sector tends to think you have to grow up in the biotech sector and factually that's not right," he says.

Whether your company is developing fuel injection systems for DI engines, or a new drug molecule or a new therapeutic, Cook says, the same processes apply. "The disciplines that are needed inside the companies and the technical competencies may be different, but the processes are very similar," he says. "The organisations go through the same things. The stresses and strains that they put on organisations are the same."