Backing biotechs with US-style entrepreneurialism

With a who’s who of backers, Anthony Liveris is scouring universities for IP that can be incubated into fledgling companies.

Born in Thailand to Australian parents, Anthony Liveris studied in Hong Kong and the US, and co-founded a data analytics company called Applecart from his dorm at the University of Pennsylvania.

Initially focusing on working on political campaigns including those for Republican Mitt Romney and Ohio Governor John Kasich, the company set up offices in Manhattan and expanded into the advising business.

But, after doing a masters at Oxford, Liveris decided it was time to come home to Australia, moving back just before the pandemic in 2019.

The son of former Dow Chemicals CEO Andrew Liveris, he connected up with another Australian who was returning from a long stint in the US, Tristan Edwards, a former fund manager who had spent four years working in biotech in Boston with Australian geneticist David Sinclair, based at the Harvard Medical School.

Edwards co-founded Life Biosciences in Boston with Sinclair, a company focused on the anti-ageing process.

The link came through US biotech fund Catalio Capital Management, which was looking to expand into Australia.

With Dr Lindsay Wu, Liveris and Edwards have founded biotech incubator Proto Axiom.

Liveris is chief executive, while Edwards, who is still involved with the Boston company which is now valued at around $US650m, is executive chairman.

Proto Axiom’s business model, says Liveris, is to “take majority stakes in promising IP out of Australian universities, mature it internally for two to three years by working with partner organisations, and then spin it out”.

The company is scouring the university sector looking for promising scientists working on early-stage drug development, whose work can be “incubated” into fledgling companies and taken to the next stage.

While Wu is based at the University of NSW and the Liveris family has connections with Queensland University, where Andrew Liveris did the engineering degree that paved the way for his global career, Anthony says his company is “university agnostic”.

“We’re just chasing the best science. We are looking at opportunities all across the country.”

The group has raised an initial $10m, using their connections to bring in high level investors from Australia and the US, a combination of personal and institutional investment.

These include Costa Group founder Harry Debney, Alex Debney, a partner in Conscious Investment Management, entrepreneur Terry Paule, former MasterCard CEO Ajay Banga, Dennis Mehiel, chair of packaging company US Corrugated, TIME Ventures Holdings which invests for internet entrepreneur Marc Benioff, New York-based Parkview International and Catalio.

It’s an impressive list of global investors prepared to take a risk on the potential of the biotech sector in Australia.

The scientific community in Australia has always been long on high-quality research but short on getting it commercialised.

What has been missing, Liveris says, is a proactive incubation process that works with scientists to put a corporate structure around them. Another challenge is getting ideas through the painstaking processes of regulatory approval from organisations like the Therapeutic Goods Administration (TGA) in Australia or the US Food and Drug Administration.

Liveris argues his company offers a rare combination of connections with high level investors in Australia and the US, including Catalio, which has extensive experience in the biotech sector.

“It’s not a package which has been available in Australia. We have been working on this for about a year and have just had our first capital raising. We are at a critical inflection point of staffing up and bolstering support around our chief scientist, Lindsay Wu.”

The biotech sector is “an area where Australia is kicking goals but we are not seeing a lot of downstream wins”.

Like his father, who has long argued that Australia should have a domestic gas reservation policy to back the manufacturing sector, Anthony Liveris believes Australia needs to bring more capacity onshore and not be so quick to sell homegrown expertise overseas.

“I care a lot about onshoring capacity and allowing Australia to play to its strengths,” he says.

While he has spent most of his life overseas, Liveris says he has always identified as an Australian.

He believes he can use his connections in both countries to help develop biotech in Australia.

The investors who have backed the initial fund raising for Proto Axiom have “bought into this greater vision of building a biotech ecosystem in Australia”.

The goal is not to “rip scientists out of the academic environment”, but to develop a US-style culture where scientists go on to use their research to found successful companies.

Edwards says the local biotech industry “is probably where the US was 25 years ago”.

He says few university-based scientists set up companies, with the system in Australia rewarding the amount of publications and not practical outcomes such as commercialisation of research.

In the US, he says, scientists have long lists of commercial ventures they have been involved in.

“Boston has a deep ecosystem of active academic founders working at universities who have gone through rounds of funding to develop their ideas through Phase 1 and Phase 2 trials and then get them listed on the Nasdaq. There is a dynamic ecosystem there which we don’t have in Australia.”

Australia has some of the basic building blocks, including an “abundance of world class universities and an abundance of world class intellectual property. It also has an abundance of CROs (contract research organisations) to develop late stage assets. What we don’t have is the piece in the middle which is the preclinical experience to develop these early stage assets and the investors to fund it.”

The net result, Edwards says, is that Australian research is not taken to the next stage of commercialisation, or if it does, the scientist has to go offshore. “That’s the problem we are solving for with our biotech incubator.”

Proto Axiom is set to announce its first major investment with a second expected early next year.

“As we build out our infrastructure and we raise more money, the frequency of investments will increase,” Edwards says.

Edwards has put together a board of preclinical experts based in Boston who can provide early stage expertise to local scientists.

Liveris says part of their skill will also be about giving the right incentives for the scientists to “play to their strengths, ideally launch within their university and leverage their PhD students, but also to stay close to the company which would not have formed without them”.

The success of Catalio in the US has been to make sure the scientists get “meaningful equity”.