If billionaire “prospector” Mark Creasy has the Midas touch when it comes to divining lucrative mineral deposits, Paul Hopper just might be the man who wields the mythical rod of Asclepius - the Greek God of medicine - when it comes to the equally lucrative ASX-listed biotechnology space. By any measure Hopper has experienced success listing and developing biotech companies on the ASX – and the last year was a good one.
In ancient times a snake bite was the worst kind of affliction one could suffer as it was very difficult to recover from. Asclepius had the power to heal even the snake bite and his oft wielded staff, with the entwined snake, known as the rod of Asclepius, is still today a symbol of physicians throughout the world.
Cancer is perhaps the modern day equivalent to the ancient snakebite and whilst it has proven to be notoriously hard to cure, a rapidly developing biotechnology known as “immunotherapy” just might end up looking like the current day rod of Asclepius – and Hopper is right at the cutting edge of that technology and others in the medical space.
To-date he has made his presence felt in the boardrooms of at least a dozen companies, often start-ups that he has form in taking through to multimillion dollar and even multi-billion dollar entities. He currently chairs Imugene Ltd, Radiopharm Theranostics, Chimeric Therapeutics and Arovella Therapeutics, some of which are pioneering immunotherapy technologies to great effect, such as cell therapy.
Cell therapy or CAR T therapy essentially involves removing a patient’s blood and then “reprogramming” it to seek and destroy cancerous cells before reinjecting it into the patient’s body. It is based on the theory that the body’s own inbuilt immune system is best placed to fight diseases like cancer but often need a bit of a boost – entre immunotherapy.
An approach Hopper favours is to identify technologies and intellectual property in research areas he knows are attractive to big pharma or serious investors. He then licences the IP, builds up the management team and the capital and takes it to market – and the market seems to like his work too. He has grown the $6 million Imugene Ltd into a $2 billio company although it did push a market cap of $3b in late 2021. A recent drop however of almost 20 per cent in the S&P/ASX 200 Pharmaceuticals & Biotechnology index has impacted the Imugene share price.
“But look,” says Hopper, “Markets go up and down whether its industrials or biotechs. I’m very positive for the sector in Australia in 2022.”
The vagaries of the market notwithstanding, he knows when it’s time to lock in a profit. He sold the oncolytic virus play Viralytics Ltd to the Merck behemoth in 2018 for $500m after back dooring the IP from Newcastle University in 2006. An oncolytic virus preferentially infects and kills cancer cells. As the infected cancer cells are destroyed by oncolysis, they release new infectious virus particles or virions to help destroy the remaining tumour.
Hopper was in the private hospital industry prior to getting the biotech bug. He had a listed vehicle that was taken over by medical goliath Ramsay Healthcare.
“I took a year’s sabbatical and went to the US and met a number of cancer specialists who were involved with developing cancer treatment drugs and I spent quite a bit of time with them. I was enthralled - it was like a light switch being turned on,” he said.
As a result of that revelation, Hopper charted a new course for himself into the biotech sector. He returned to Australia and through his previous contacts in the hospital system started looking around for opportunities that actually led him to Europe.
“I found some technology in Germany, not Australia and licenced it and put it into a small quasi-biotech company down here in Australia, and it went from there.”
“I took that company to America and lived in the US for 11 years and during that time established a business model whereby I would go to all the major medical institutions, universities and hospitals across America and would look at what they had in their kit bag in terms of medical technologies available for licence.”
“I was fortunate over the years, I developed relationships with some of the major institutions in the US, Europe and the UK and I was able to acquire those technologies and they wound up in six ASX companies to date.”
In these companies Hopper was either a founder or the technology seeder who licenced the IP that formed the basis of the technology. His biotech seeding initiatives also include Prescient Therapeutics, Patrys Ltd and Kazia Therapeutics.
He doesn’t see himself as an “incubator” however. “Being an incubator suggests you’ll flip at the next stage. That’s not my modus operandi. Biotech requires a long-term view supported by patient capital and I’ve always taken that approach,” he said.
“I’m very, very hands on in all my companies and I usually take the executive chairman role.” In the process of finding technology, I form close relationships with the scientific inventors. This is their baby I’m about to licence from them and part of establishing the trust with them is their confidence that we’ll build a company for the long term.”
Whilst the biotech start-up business model does have some similarities with mining and the risk and reward curve is a little similar, there is a broader attraction to the biotech space than just making money says Hopper.
“Imagine if one of the drugs gets approved?” asked Hopper. “It’s transformational for humankind. I think I’m in the best industry possible.”
“There are different ways of measuring reward if you put aside profit margins and ROI. One of the greatest rewards is being part of the mission to cure the scourge of cancer. Scientifically I’m not qualified to be a part of that goal, but I can bring capital and management expertise to the table.”
“In doing that I get to be associated with some of the brightest people on earth, who not are not only brilliant at what they do but are great humans also. Many of them I’ve become friends with, as has my wife.”
Whilst Hopper sees himself as being a little altruistic he also knows how to make money and there are plenty of examples. Immunotherapy leader Imugene is his standout success to-date.
“If we’re looking at financial terms, Imugene which I founded and am Executive Chairman has been by far and away my most successful if we’re looking at financial rewards in terms of shareholder returns.”
“When I started the company in 2013/14 it had a market cap of around $6m and today the market cap is around $2billion and was as high as $3b before Christmas.”
“Small shareholders who have bought shares in their super funds at 1-3c have made millions and that’s pretty gratifying.”
Investors however have turned their backs on biotechs in recent months with the global biotech sector being significantly sold down.
Hopper said the US biotech index was down over 30 per cent last year with the exception of Covid stocks like Moderna and Pfizer.
Hopper however remains optimistic for the long term and sees investor attitudes continuing to mature.
He said: “In the early 2000s in Australia biotech was seen as a highly speculative investment, actually not unlike mineral exploration or drilling for oil and gas.”
“There were no real institutional investors in the sector as biotech was not, and is not, an established asset class in Australia unlike Europe and the US where it’s well and truly an asset class.”
He recalls most investors in those days being retail investors or high net worth types with institutional investors being a rare bird indeed and qualified biotech analysts being a non-existent breed.
“Very few ASX-listed biotechs had US institutional investors on the registers - they certainly didn’t have any Australian super funds on the register.”
“Today there are dedicated life sciences venture capital funds, there are family offices that invest regularly in biotech and a lot of ASX companies have US life sciences funds on their register and we see U.S. funds taking placements in Aussie biotechs.”
“Unlike years ago there are now a number of science-qualified research analysts covering the sector, not just generalist analysts. There is a far better understanding today of what is a quite complex industry sector.”
It does help that there have been a number of high profile ASX biotech successes – standout biopharmaceutical manufacturer CSL is now an international $125 billion company for example.
While Hopper’s Imugene is now a $2b company his former company Viralytics repaid shareholders in spades when it was snapped up on market a few years ago by Merck for $500m.
He points to a few more examples that have turned the heads of the often resources-centric Australian investor.
“Sirtex, which was a liver cancer treatment provider, was taken over on market in 2018 by a Chinese consortium for almost $2b and the $50m IPO of Telix Pharmaceuticals in 2017 has now grown into a $2b entity.”
It’s clearly not just about the money for Hopper however.
He said: “Clearly getting a drug approved can make huge returns for investors but for patients it’s transformational and I think that’s what makes biotech a great sector to be in.”
“If you factor altruism into your investment due diligence, you’ll make a better-informed decision and have a better understanding of the biotechs you invest in and you’ll understand the pitfalls with life science investing.”
“Imagine, if the drug gets approved, you’ve been part of history-making and that for me well and truly beats bitcoin.”
Notwithstanding local growth stories, Hopper says the United States still has some of the most fertile ground for sourcing and licencing prospective biotechnologies.
“There are 3000 universities in the United States, some of the greatest universities in the world are there – Harvard, Yale – and some of the greatest medical institutions – MD Anderson and Memorial Sloan Kettering – they are powerhouses of intellectual property generation in medical science. There’s a lot to look of IP to look at.”
“Australia generally doesn’t really have that sort of horsepower in terms of generating a huge amount of technology available for licencing,” he said, noting however his success however with the NSW-derived Viralytics.
Remarkably, in the last few years Hopper has either been directly responsible or heavily involved in listing eight companies on the ASX.
They include the $1.8b Imugene Ltd, $79m Radiopharm Therapeutics, $72m Chimeric Therapeutics, $25m Arovella Therapeutics, $135m Prescient Therapeutics, $56m Patrys Ltd and the $145m market caped Kazia Therapeutics.
When added together with the $500m takeover of Viralytics, the collective market caps of the companies that Hopper has been involved in bringing to market exceeds $2.8b. Whilst the Mark Creasy’s of the world have also experienced this kind of market success in the mining sector, there is something quite noble about curing people of an ailment that has taken over their lives and those of their family – and making some money along the way probably doesn’t hurt either.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Matt Birney
