Originally published in theage.com.au
By PHILIP HOPKINS
Monday 11 December 2000
"Oh, East is East, and West is West and never the twain shall meet," wrote Rudyard Kipling in one of his more famous poems. But the great English author could not have got it more wrong.
It is precisely the meeting of east and west that is driving a new biotechnology venture in Victoria. Analytica, a company that listed on the Australian Stock Exchange two months ago, has forged a unique marriage between traditional Chinese herbal medicine and Western scientific medicine.
The company has combined the skills of high-profile Melbourne physician, herbalist and acupuncturist Yoland Lim with the experience of several businessmen in the financial and pharmaceutical industries.
Analytica's non-executive chairman, Peter Jonson, for example, is also chairman of the Melbourne Institute and a former chairman of ANZ Funds Management who worked for the Reserve Bank between 1972 and 1988. Rod Tomlinson, another Analytica non-executive director, was the former chief chemist at international medical device company Smith & Nephew and head of research at Ensign Laboratories in Mulgrave before founding his own company, Soltec Industries Pty Ltd.
Soltec grew to employ 130 staff, winning several awards and gaining 14 international patents, which resulted in the licensing of Mr Tomlinson's chemical and drug delivery technology.
Soltec was sold to Australia's largest pharmaceutical company, F.H.Faulding, four years ago and Soltec's inventions have global sales of more than $1 billion.
According to Mr Tomlinson, Analytica's philosophy aims to build on an established tradition - old remedies ultimately have a scientific base. Penicillin came from moulds; digitalis, a centuries-old heart medicine, came from the foxglove flower; and aspirin, developed by the German company Bayer in the late-19th century, originated in willow-tree bark, which American Indians had used for hundreds of years. "We are bringing together Chinese herbal medicine and the discipline of the Western pharmaceutical industry," Mr Tomlinson said. "This is one of the first times it has been attempted in the world."
In Yoland Lim Analytica has found the right man to come on board. Mr Lim, born in Singapore, is a fifth-generation specialist in Chinese medicine. For more than 20 years he has been running a successful business in Melbourne that blends tradition and science.
He has developed many Chinese medicines and westernised eastern medicines to official health standards.
His company has a research laboratory in Boronia in Melbourne's east. It also outsources research to Monash University, Royal Melbourne Hospital, and universities in South Australia, America and Japan. But like many small businesses wanting to expand, Mr Lim's Herbal Research Laboratories lacked capital. Hence the tie-up with Analytica, which has taken over his company. Mr Lim is now an Analytica shareholder and board member.
For Mr Lim, who came to Australia in 1972 with only $84 and set himself up in the paddocks of Wantirna, giving up his independence was not easy. "It was a hard decision to make, but we are going in the right direction," he said. There is plenty of raw material. Out of about 6000 Chinese herbs, HRL has used only about 500.
Analytica's medicines have potential benefits for obesity, weight control and inflammatory-related disorders, including arthritis and asthma. Mr Tomlinson said one natural compound under investigation that contained cytonin was showing signs of being superior to taxol, a tree-bark extract used in breast-cancer treatment, in its anti-cancer properties.
Herbs are complex with hundreds of components, yet only 10 or 12 may be active. "The mixture of 'the actives' can even be more effective than a pure form," Mr Tomlinson said. "You are getting into heavy science then."
Mr Lim's well-established products will provide a cashflow as Analytica continues research. Analytica can draw on research facilities in the United States and knowledge from Taiwan. Its scientific research board has biotechnology experts from institutions such as Sydney's University of Technology and the Victor Chang Cardiac Research Institute.
The outsourcing strategy is designed to avoid the high fixed costs of in-house scientific work.
So far, the market has not been kind to Analytica, its shares languishing between 25 and 30 cents, below the issue price of 50 cents. The company's market capitalisation is $23.3 million, with 85 million shares on issue. Mr Tomlinson said the biotechnology sector had been hit by the dot-com market slump.
Analytica plans to grow in Victoria some of the estimated $600 million worth of herbs now imported from China. "We have the soils, the space and the knowledge how to grow herbs without insecticides," Mr Tomlinson said. Gippsland was the favored location because of its high rainfall and good-quality soils. Ideally, the herb farm would be close to large towns and medical laboratories at Churchill in the La Trobe Valley.
In the long term, a processing plant could be established nearby. "We could develop a world-class ability to grow, identify and purify herbal activities," he said.
Mr Tomlinson's passion is to help make Victoria and Australia a leading world biotechnology centre. Nothing infuriates him more than Australia's legendary capacity to create the highest per capita number of patents in the world but have the lowest conversion rate.
"If the Finns with Nokia can dominate the world's mobile phone market, why can't Victoria dominate biotechnology?" he said.