Cathal Friel, chairman and co-founder of Poolbeg Pharma. What keeps him going is ‘the fun and enjoyment of creating companies’

Cathal Friel’s latest venture, Poolbeg Pharma, a clinical-stage infectious disease firm spun out of Open Orphan, aims to tap into the almost €200 billion infectious disease market.

ELLIE DONNELLY

The big successes of his recent career are not what motivate Cathal Friel. The executive chair and co-founder of Open Orphan and Poolbeg Pharma says his drive goes back to his teenage years in the early 1980s, when he had to drop out of school and take over the family’s retail and petrol business.

“It’s very simple. I was waking up in Donegal as an 18-year-old and saying ‘shit, how did this happen?’” Friel tells the Business Post. “I remember I used to cry my eyes out at 17, 18 years of age.”

Friel is candid in discussing what led to him dropping out of school in 1981, after completing what was then the Inter Cert.

“Interest rates had gone through the roof that year, high double digits. My old boy had been dabbling with property in 1979, the economy was taking off, he borrowed quite a bit of money,” he says.

Friel, the middle of ten children, says his father became quite ill and he was asked to run the family business.

“At the time I hated having to leave school at 16, but with hindsight it was the best thing ever. So I left school with just an Inter Cert . . . my wife always says, ‘Don’t say that to our kids’,” he says.

But that was not the end of education for Friel, who went to college at night, then earned a master’s before lecturing part time for five years, all the while running the family business.

“That kind of sowed the seeds for everything I did since. I was busy running quite a boring business, but I was having to study at night so I was having to learn something new,” he says. “Having to complete my education at night allowed me to spend the rest of my life constantly educating myself.”

What keeps him going, Friel says, is “the fun and enjoyment of creating companies”. His history in business certainly backs up that assessment.

A new start

In 1997, Friel sold the family business, took a year off, and travelled around the world at the age of 33, which he admits made him “a slightly older backpacker”.

He did not return to Donegal, and moved to Dublin on Easter Monday 1998, knowing nobody. “I had no connections. I just threw myself into the business community, started in this software company called Allfinaz, and really enjoyed that for a few years,” he says.

Friel would go on to have a successful career in Merrion Stockbrokers before setting up Raglan Capital in 2007. “Raglan was profitable from its first day in existence. I maintained a great relationship with some of the guys in Merrion, and I continued in corporate finance until 2011,” he says.

But a long career in corporate finance was not for him, so he began looking at companies that could list on the AIM sub-market for small and medium-size companies on the London Stock Exchange. “I wanted to do AIM turnarounds, develop AIM-listed companies,” Friel says.

He worked with a number of companies in the energy sector before founding Amryt Pharma, which today is listed on the Nasdaq and has a market capitalisation of $456.7 million. Friel, who still has a “small stake” in the company, describes the growth of Amryt as a “lovely success”.

“I stepped away and let the guys build the company, but I stayed on the board for quite a while. I decided I would do another pharmaceutical company,” he says, referring to Open Orphan, the Dublin-based firm he set up in 2011 before floating it on the stock market in 2019.

The company, which has rebranded as Hvivo, provides clinical trials and human challenge studies to large pharma and biotech companies. It is forecasting full-year sales of about £50 million this year.

“The interesting part of Hvivo is that all it ever did was test vaccines for ten years. In December 2019, there was no market for testing vaccines. But three months later, there was a good market for testing vaccines,” Friel says, referring to the onset of the pandemic.

While the pandemic has subsided, Friel forecasts that the company will continue to grow by around 10 per cent each year.

“What’s happening now is we have a pipeline for the next two years. We see so many big pharmas and governments spending money in infectious disease and so on, and that has never happened before. It’s a lovely company, it will keep growing steadily,” he says.

As part of its work, Hvivo, which has around 300 employees, carries out clinical trials on humans. Getting healthy volunteers to sign up to the trials, which sees them kept in a hotel for a week or two, is something that is never an issue, according to Friel.

“There are students and a whole group of people in London every year that come and do clinical trials and get £4,500. It’s medical research so it’s tax-free. The perfect volunteer is aged 28 to 40. They’re working, they need a bit of extra cash, they come on time, leave on time, they will be drug-free, alcohol-free,” he says.

The working from home revolution since the pandemic has proved a boon in this regard too.

“We’ve got a ton of people working from the clinic. Instead of taking two weeks off to do the clinical trial they continue working on Zoom, with the background probably switched off,” Friel says.

Last year, he launched a new company onto the stock market: Poolbeg Pharma, a clinical-stage infectious disease pharma firm spun out of Open Orphan, raising almost €30 million in the process.

The infectious disease market, which Poolbeg is targeting, is forecast to be worth more than €200 billion by 2025. The business aims to develop multiple products faster and more cost-effectively than the conventional biotech model.

“I think Poolbeg Pharma is going to be our biggest deal, we’ve got Luke O’Neill in, he’s a world-renowned person,” Friel says. “In putting all these companies together, it’s finding the right people. Without getting Joe Wiley and Rory Nealon [Amryt’s chief operating officer and chief financial officer] there would be no Amryt. Without the team in Hvivo, there would be no Hvivo,” he says.

“It took us seven years to get Amryt to half a billion, and my stake goes down really quickly. I never take the money out of the companies, I live very modestly. Poolbeg, I think, will be a really exciting company.”

Living modestly

To this day, the effects of leaving school and the sleepless nights running the distressed family business remain with Friel. His says he has a “modest” mortgage, and last year was the first time in his life that he purchased a brand-new car.

It was to celebrate 40 years of working, but he is coy about what type of car it is, not wanting to appear showy. He says he still holidays in Dunfanaghy in Co Donegal, and rented his home until he was 40.

“Way too many people in Dublin and nationwide worry too much about big cars and fancy houses,” he says, adding that there is too much pressure on young people to buy homes because the rental market is underdeveloped.

“I’ve hated debt all my life, and that saved our extended family I’d say in 2008 and 2009. People think that was the first financial crisis, but there were a lot of businesses that had a shit time in 1981, 82, 83,” he says.

Emerging as one of the Irish business success stories during the pandemic, Friel has been outspoken on his belief that it is effectively “over”, that people should not test if they have symptoms, and that we should treat the virus like the common cold or flu.

“The reason being, we have all got some mRNA vaccine in us. It is almost the holy grail. Anybody who’s been vaccinated with an mRNA vaccine, provided you take it every couple of years, you’ll never have a problem with Covid. There will always be little outliers, there’s always exceptions,” he says.

If people feel they have the virus, they should stay and home and rest, but if they feel better they should go to work, according to Friel. This is contradictory to current HSE advice. “Why would you self-isolate at home for a full five days? It’s almost as if you have the plague.”

While there has been some doom-mongering about the next pandemic, Friel believes that hundreds of billions are being spent on making sure such a similar pandemic never happens again.

“It was a wake-up call for the world. There was no real focus on infectious disease [by] governments around the world,” he says. “A lot of the time it was poor people who really got hurt by infectious disease – malaria, typhoid, influenza.”

Covid-19 is not the only subject where Friel is keen to express his views. On Brexit, he says it was “the greatest thing that happened to this country”.

“Ireland has been built on foreign direct investment [FDI]. If you ask any multinational quietly to give three reasons why they’re here, they will say ‘tax, tax, tax’,” Friel says.

However, Ireland has been under pressure for some time in relation to its corporate tax rate, with attempts to implement harmonisation which would limit Ireland’s competitive advantage. But Brexit has saved any fast flight of FDI, Friel says.

“All over the world, convergence of tax was coming . . . Multinationals plan ten to 12 years ahead. If it wasn’t for Brexit, most FDI would have gone to the UK for the following reasons: the tax in the UK and Ireland are virtually the same, so why come to Ireland when you can get a bigger population next door? They are all English-speaking, there’s a railway line to the biggest market in Europe, there’s hundreds more flights to America,” he says.

As well as Ireland’s membership of the EU, the political stability here is also very important, Friel says.

“Brexit proved to multinationals around the world that Britain is politically unstable,” he says. “The beauty of Brexit is big Asian companies, big American companies all need a footprint in the EU. But the one thing they want is it has to be English-speaking. Because of Brexit, multinationals are going to keep coming, wave after wave.”

The Ukraine invasion

Since Brexit, the other major geopolitical event in Europe has been Russia’s invasion of Ukraine. Friel describes what Vladimir Putin is doing to Ukraine as “terrible”, but believes that the country will prosper when the war is over.

“Putin is terrified of Ukraine proving to Muscovites that democracy is good, so he wants to suppress them. But he has lost,” Friel says.

Once the war is over, he believes that the EU and the Americans will pour “loads” of money into Ukraine to prove Putin wrong. “Ukraine will probably be one of the biggest growth areas in Europe,” he says.

More widely, he believes the war is forcing Europe to put proper investment into developing green energy, which could benefit Ireland.

“I think the whole west coast of Europe, Ireland, France, Spain is going to pop up a huge number of offshore wind turbines, 12 miles out so you can’t see them. And Europe then becomes a net exporter of green energy,” Friel says.

It’s clear that he has a wide world view and an insight into many areas, so would he consider a move into another sector after working in education, software, finance and pharmaceuticals?

“Oh yeah, oh yeah,” he responds straight away. “Watch that space. I’m not telling you until next year. The plan would be to keep growing Poolbeg. At some stage in a year or two, once we have that on Nasdaq, then I can do it.”

In his own words: The deal that changed everything

Spinning Poolbeg Pharma out of Hvivo (formerly known as Open Orphan) and getting Professor Luke O’Neill as non-executive director and scientific advisory board member changed everything. In my opinion, it is one of the most exciting and pivotal deals I’ll ever do, as I firmly believe Poolbeg Pharma could become a $1 billion pharmaceutical company.

It has a flu product which could help avoid future flu pandemics, oral vaccine technology, and an oral GLP-1 diabetes product which could become the most valuable obesity treatment in the world.

It also has the world’s largest repository of respiratory infectious disease progression data, and this data is invaluable for AI drug discovery programmes which Poolbeg is progressing.