Transcript of Newsworld Business News Interview With Don MacAdam
Hey all,
If you are unable to see the interview again at 6:30 or much later here is a transcript of the interview. I made it myself so the errors are most likely my own! I have the interview on tape and am willing to recheck any inconsistencies. Please notice the comment Don made early on about the Agreement being signed is he referring to the 3 month trial? or the contract we're all waiting for. Maybe it was a slip of the tongue I called TM but since its a civic holiday no one was in. I'll call again tomorrow!
Rhys
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HOST: Canada has developed a global reputation as a center of Biotechnology development. With the help of the Federal and Provincial Governments, Universities and Hospitals ideas to solve medical problems turn into companies. Some of these companies become Investment opportunities. Its an exciting industry and the rewards can be huge. But it takes patience and luck to reap those rewards. To discuss the current and future status of this industry I am joined by Don Mac Adam of TM Bioscience and John Kennedy of Hemosal Inc. Don let me start with you could you briefly tell us what your company does or is trying to do.
DON: Certainly, TM Bioscience is a genomics company. Now genomics is concerned with understanding DNA which is the basic molecule of life. What we've done is come up with is an understanding which is called the second genetic code. Which is additional information that is encoded in DNA. We've been able to take that basic science and develop a range of products that improve any therapeutic or diagnostic which incorporates or reacts with DNA
HOST: Now this is what your trying to do. You haven't actually achieved the end result, yet.
DON: Well we actually have signed a collaboration agreement with a manufacturer of Biochips to improve the performance of Biochips. Which is an emerging market Biochips are not yet a large commercial market. But in the future its believed it could be a multi billion dollar market.
Talks to Hemosol president about them and they're stuff. I'm not typing that out!
HOST: Don, is it difficult raising capital and starting a biotechnology company?
DON: Well, Actually I wasn't around at the start of TM Bio-science which is another thing which is interesting about the biotechnology world. Compared to others many of these companies go through phases. The initial founding is typically through the scientific founder. And then typically a biotechnology goes through a number of rounds of financing. I've been around since the beginning of 1997 when we were financed by MDS Capital. So....
HOST: How important was location in Canada. In terms of getting access to capital markets and access to the right R & D (Research and Development) people.
DON: Absolutely essential to be in a region that has a group of trained people. For example we're located at Dundas and University (Toronto) so we're near a number of teaching hospitals near the University of Toronto and there are a number of Biotechnology companies in the area. I think that a good company could be based anywhere and have access to capital but being here in Ontario and Toronto also gives you access to personnel resources and professional resources that are very important in building one of these companies.
Talks to Hemosol President about being in Montreal!
HOST: But getting this money, it doesn't matter where you are, How do you assess the risk in putting venture capital into something that could take years and years to develop.
DON: Well, actually the risk is part of the story. Biotech companies are by definition risky. Because we don't really know if the market will develop and substantial revenue will develop for our product. But if we are successful or any individual biotechnology company. An investor can look forward to a tremendous return on their investment 10, 20, 30 times. So, the strategy for investing in biotechnology companies is typically to choose an number of companies 5 or 6 companies to invest in and hope one or two of those companies do well. So the risk is important.
Other Guy says something
HOST: We're living in an age of instant gratification. and yet your asking Shareholders and Venture Capitalists to be extremely patient, Don how do you get away with that?
DON: Yes, well what you have to do is try to draw a picture of where the company will be in the future. Say 3 years from now with a revenue line, expenses, earnings and so forth. That is based on a number of assumptions. But if you can convince an investor that the company will be worth say $10 a share in 3 years. Than you simply discount it back 30% a year to get present value. You have to make that kind of argument you need a real compelling argument that shows future value and then based on future value you calculate present value.
Other Guy says something
HOST: Well, we are certainly creating to human beings longevity it strikes me Don. ( I don't quite know what the host was saying he messed this one up good but these are the words I could decipher)
DON: I believe that we're on the cusp of understanding mechanistically exactly how the body works and exactly how cells function. And once we understand at that very deep level what precisely is going on in a molecular biological environment than we can address cures. I'm not talking about treatments for symptoms but cures for underlying diseases. I believe we'll see many of these role out over the next three to four years. There'll be a sea change in what's available and how medicine is delivered to the public.
Other Guy says something
HOST: At the moment where TM is a relatively small company. Your actually a penny stock trading at less.......
DON: Under a dollar that's correct (he didn't look pleased. Though neither are any of us!)
HOST: So what advice would you give to shareholders Don? or possible shareholders?
DON: Hopefully most of our present shareholders know about the company. Our company is, we believe, at the forefront of applying genomics to understanding how cells function and how disease processes work. And we have the potential of generating revenue both at the beginning of the drug discovery process and downstream as drugs are discovered. We in fact do no intend to introduce any drugs or products ourselves but we would rather license our underlying technology to a range of companies who would then undertake the infrastructure and capital intensive task of taking products to market.
HOST: This is in fact quite common for small companies to pass along, to license their expertise.
DON: YES
Other Guy says something
Host wishes them all luck and does a stay tuned blurb. |
