iah website, page-18

Pixie

POH’s animal health division was cut loose at the turn of the year. In my view, it was simply the right time, both for Phosphagenics and for the Neely run businesses. I’m also of the opinion that this new way of addressing animal health can be very much a win/win for both.

In one way, POH’s move can be seen as simply following a widespread trend in business – when non-core divisions start to need more capital or management time, they are divested. To my mind there is no question that animal health was at the stage where much more of both was urgently needed if growth was to continue. In the Annual Report Harry Rosen stated that the Company’s primary strategy was to “build the sales of raw material, that is TPM®, into the animal industry. This strategy is predicated on the need to focus on the opioid development and to minimise costs of development of products in other areas.” He was clearly acknowledging the management time and capital constraints that POH had faced with developing its animal health division.

Another way of looking at it is expressed in the old business adage – “Stick to your knitting”. In other words, focus on your core competencies. Sure, all animal health products incorporate TPM, but other than that, what expertise or networks does POH have in animal health? As far as I can see, when looking at the background of POH’s management, board and scientists, I don’t see any established link to the area of animal health. In contrast, working with farm animals is precisely Neely’s background. He also has previous experience in animal feed product development and sales, he has established networks, we know he has long held vision and belief in the potential of TPM and he has demonstrated that he has the kind of boundless energy, enthusiasm and entrepreneurial spirit needed to drive a new company forward. Also not to be ignored is the fact that he comes from the land, which counts a great deal when communicating with and understanding the needs of farmers.

A final view on the matter comes from the blog of a self-described “recovering scientist turned early stage VC”. Bruce Booth champions the cause of starting anew for “intelligent design”.

At their inception, startups offer a clean sheet of paper for the founding team – freed from legacy encumbrances and infrastructure, startups can actually engage in real ‘intelligent design’ of an R&D organization, embracing more revolution than evolution.

I often describe the creation of a new startup as one of coding the new DNA of an organization...fundamentally, ‘Intelligent Design’ of the DNA of a startup is doable because we can throw away the legacy corporate genome. Figure out what you want the organism to do, and design the “minimally complex genome”, in synthetic biology speak, to achieve that goal.

Freed from the baggage of organizational evolution, startups can code their own DNA, reframing disadvantages into advantages, creating unparalleled networked models, and embracing frugal but impactful innovation. *

I think that Booth would get it...impactful innovation achieved by coding the new DNA of animal health in the form of IAH, putting together a new set of genes, then feeding those genes with TPM! Hopefully this will mean explosive growth for animal health, because that, in turn, will positively impact POH’s revenues. In the meantime, Rosen’s brilliant team of scientists and pharma execs have their hands free to get on with their own knitting.


* http://lifescivc.com/2014/03/unlocking-the-promise-of-biotech-startups-learnings-from-mars-goliath-and-evolution/