Wayne Finlayson, CEO Servatus Ltd., interview

INTRODUCTION:

 

IR Department sat down with Dr Wayne Finlayson of Servatus Ltd to discuss his vision for the company, his 30 year career in the biopharmaceutical and biotechnology sector and life outside of work. He was Executive Director of Infergene (listed on NASDAQ), with specific responsibility for technology and in 1990, he founded Progen Pharmaceuticals and was Managing Director and CEO. Wayne holds a BSc (Hons) and a PhD in Organic Chemistry from La Trobe University. After completing his doctorate, he was a post-doctoral Research Fellow for three years at the University of California, Berkeley, in the USA.

 

Dr Finlayson, tell us a bit about the history of Servatus and what led you to your most significant discovery.

 

Servatus was inspired by a friend of mine that I met in the early 80s in the US, who was another Australian. He was one of the first Australians to be employed in the US in what's called ‘Biotech Alley’, which is in the San Francisco area and was the home of a cluster of biotech start-ups. At the time, I was in Berkeley University. Over the years we’d crossed paths and had threatened to work together for about 30 years and finally in 2010 I bumped into him again and I said what are you working on?  It was a discovery of the engineered proteins that Servatus is working on and the wild type protein that's found in your body naturally is not stable for long enough. We set about designing or re-engineering the molecule to last longer in the body, so it is a bit more stable, the longer serum half-life, and that was what led to the instigation of Servatus. Over the years I’ve been working on the microbiome as well. We brought that into the company at the same time and then we discovered there was a link between the human protein we were engineering and what was going on in the bacteria. I think the most significant discovery was the idea that the bacteria could be working the same way or having some effect in the same way as the human protein that we were working on.  

 

Servatus recently closed an oversubscribed capital raising to advance clinical trials across a range of areas – arthritis, insomnia, inflammatory Bowel disease Ulcerative colitis among others, how was this raising received among shareholders and how will you use these funds?

 

That’s right, we just raised $7.5 million to advance our programs for microbiome therapeutics with strong support from our sophisticated investors. We went to the current shareholders early in the capital raise and we were certainly not asking for the amount that we ended up with, we were asking for less and we were pleasantly surprised by the fact that they oversubscribed the capital by a long way, so I guess they're pretty happy with the way the company's been going over the years and where we're headed. It’s a very exciting space. We will use the funds to accelerate the clinical trials that we we're working on, the insomnia and the rheumatoid arthritis amongst other priorities. We’ll also look to accelerate some of our OTC products that we’ve soft launched as well. The capital raising has opened up the scope for us to grow, we can do a lot more with other trials that we had planned but didn't have the resources to actually continue with. We're already doing quite a few trials at the moment so we are really pleased to be in such a strong position to accelerate new opportunities to build Servatus into a large business in the field of microbiome therapeutics.

 

You are considering taking the company public next year, you have some world class manufacturing facilities in Queensland and you’re targeting a very exciting new area with microbial biotherapeutics programs - is this just the beginning?

 

Yes, we're not interested in just making a small company here, we're trying to do something that will be a long-lasting, large company. I’m very passionate about being able to develop this business in Australia which in the past has not had a great track record of commercialising science.  Certainly in Australia we've got some good science and we've got the resources, but we've never been able to put the two together. To some degree we've been experts making holes in the ground but actually not taking that next step to high-tech industries and so forth.  Here at Servatus we're a very resourceful company and I think I’d just like to demonstrate that it can be done here, totally within the company. We may look at an IPO next year, its certainly under consideration, but we are looking at a number of opportunities as well.

 

Is microbiome the most exciting field in modern medicine?

 

Well it's got to be one of the most exciting areas, I think there's a few - Crispr you may have heard of, Crispr gene-editing technology, that's pretty exciting, in fact we're using some of it as well, but also Mrna vaccine technology, that's been pretty exciting and has been very topical in the last couple of years, but the microbiome is different.  I think people have realised that treating organs as a sort of 20th century thinking, whereas treating the whole organ system, including the microbiome, which has a big effect on whether drugs work or not, is what's really exciting and things like, for example our insomnia trial, we had not considered insomnia ourselves until we did a couple of experiments, but what surprised us was when we talked with a sleep clinic and some of the sleep doctors there had never even considered that insomnia could be treated by treating the gut, so that was just a bit of an eye-opener for us. These are experts in their field and even today they had never considered it so there's a lot of areas that the microbiome will have an effect and has been shown now to have an effect on a lot of parts of the body and it should be considered as a major organ in itself.  

 

Can you explain how observing cows also led you on the path of discovery in establishing Servatus?

 

I've been involved in human medicine for quite some time, human science, cloning and so forth and development of drugs in the human side of things, and for some reason I got involved in agricultural biotech and really that started from a friend of mine and I sitting on a beach at Fraser Island. Now Fraser Island is all sand and not a bit of soil on there and it has palm trees, huge forests other trees and he made a comment about how the nutrient cycling must be huge in the bacteria in the sand, that sort of sparked my interest and I got involved in looking at the bacteria in the soils. We started treating only first of all the plants and then we noticed that some of the cows that were eating the plants had less frequency of problems like mastitis, and it didn't make sense to me at the time. So we started experimenting with treating the mastitis in dairy cows with udder flushes and things like that as a contact treatment of the  infection. That’s when someone had the bright idea of putting the material down the back end of the cow and it cured the mastitis, which must have meant that the treatment was having a systemic effect. That's how I got interested in if this was also common in other animals and humans because after all we're just an animal. Some of the farmers I had been working with unbeknownst to me took some material that we had been using for the cows and they would say if it's good enough for the cows it's good enough for me, I've got sore joints, I'll have a go with this stuff and would come back to me and say, well what have you got in that stuff, I don't feel as sore and that's sort of how it led on to looking at the human aspect of what was going on and essentially that's the story.

 

How did you get started in science?

 

I hated Art and English at school and was always interested in physics and chemistry and so went to university to do a science degree and after my honours degree I decided to do a PhD in organic chemistry. I was more interested in why things happened at the molecular level of what was going on, which is sort of reminiscent of what happens at the molecular level of biology. I went through university and went to the US, got involved at Berkeley with gene cloning in the early days of gene cloning and the likes Genentech could see the potential in early biotechs and I guess got interested in the commercial side of science and that's essentially how I started.

 

I understand a friend sparked your interest for a lot of the early work around microbial biotherapeutics?

 

Yes. Wolf Hanish the original co-founder with me of Servatus who unfortunately passed away a couple of years ago with cancer helped in a lot of the earlier work, certainly his advice. He was a head of production at Cetus Corporation when he started so he had a lot of experience too in this sort of area. There was also a microbiologist and a good friend of mine that sparked my interest and I went and did a lot of research in the literature and then started the work in the microbial biotherapeutics.

 

 Tell us a bit about your time as a professional basketballer?

 

I would question the word professional but I got involved in sport very early and got involved with basketball. I was actually being trained by a person who was a player in the early days of the NBL and was invited to come along and train with the team and I was subsequently asked if I'd like to join as a junior and I did and ended up playing for St Kilda Saints at the time which I think became southeast Melbourne magic or something like that so it was the very early days of the NBL. I certainly didn’t make the 30 million dollars or whatever it was in NBA. So I played in both the early NBL years and the university that I was at that time had three or four state players myself included and a couple of Olympians playing and we won a couple of university championships and actually played a game against the Illawarra hawks and beating them by about 30 points, so we had a pretty good team. I also ended up coaching in the state leagues.

 

So what do you do in your spare time now and where do you see yourself in 10 years?

 

I like to go fishing. It is pretty relaxing - we're pretty close to Fraser Island so we often go there and my wife's a landscape photographer as well. In fact she's the rock star of the family so we tend to go places and take photographs and when she gets lost in taking photographs I tend to wander off with the fishing rod. In 10 years, hopefully I will be doing more fishing but I would like to say I will still be here as part of the company for quite some time, not necessarily on the executive on a day-to-day basis, but this will be my last company that I've started, I’ve started a few, so I'd like to remain on in touch with the company in some manner, but in 10 years I'll be certainly ready for retirement.

 

Dr Wayne Finlayson, thanks for your time.