Outlook: DJs are like biotech boffins

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The Independent Online
Entertainers, scientists and sports people do not on the whole make good businessmen, it is often said. There was a lot of that sort of talk around in the City yesterday following news that Chris Evans, the flame haired DJ, had outmanoeuvred Capital to bag Richard Branson's Virgin Radio. Much of this talk is just plain snobbery. Certainly it is the case that many successful entrepreneurs are not particularly talented businessmen, but that may not matter if they are creating value in other ways.

And whatever might be thought of Mr Evans, it is hard to argue with his entrepreneurial skills. The deal with Mr Branson valued Mr Evans' own relatively young TV production company, Ginger Productions, at an astonishing pounds 30m. Mr Evans needed to be dealing with the maverick qualities of another famous self publicist to have pulled off this transaction, but that doesn't lessen his achievement or his chances of success with his new media group.

Good luck to him and three cheers to Mr Branson for not selling out to boring old Capital. Without Virgin, Capital looks to be in a bit of a hole, even though it is hard to believe its share price can sink any lower. The My Kinda Town restaurants acquisition has gone down in the City like a lead balloon, and, for the time being, Capital's push into the national radio market looks to have been stymied.

Boffins rarely have much in common with DJs but there are parallels between what Mr Evans has exploited in persuading City venture capitalists to invest in him and what the more successful biotechnology entrepreneurs are about. With a biotechnology stock, investors are backing not so much the business as the man and his discoveries. Unfortunately we have just been witness to an example of how this can go wrong. Dr David Horribin yesterday parted company with Scotia, the biotech company he founded with his wife on the unpromising product of calming Evening Primrose oil.

Scotia has had a number of small time successes in pharmaceuticals, but the product that Mr Horribin has expensively and relentlessly been pursuing for the past six years, and the technology it was based on - a drug for treating nerve damage caused by diabetes - has proved a failure. This is not really Dr Horribin's fault, but it does neatly illustrate the dangers of investing in an entrepreneur's obsessions and past times. This is particularly the case in biotechnology, where few financiers have the technical expertise or biochemical knowledge to know what they are putting their money into. The strategy is little more sophisticated than giving the boffin and his team a bag of money to work with and hoping they come up with something decent.

The test of Mr Evans' skills as a businessman is going to be in his ability to create and develop a company which rises above the selling point of his own persona, which - no disrespect to Mr Evans - is already close to being past its sell-by date. By reversing into Virgin Radio, he seems to have made a promising start.

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