Cathal Friel, the serial dealmaker who floated five companies in the past 13 years, is on an extended summer break of three weeks in Dunfanaghy on the northern coast of his native Co Donegal.
But the businessman, who started working at 16, is never fully switched off, agreeing to a midmorning interview with The Irish Times by videoconference from his rented cottage while his three teenage children sleep in.
“I take busman’s holidays. I like to check in with work every other day when on a break,” the 60-year-old says. “The wifi coverage up here is great, which helps.”
Having stepped down last month as chairman of Hvivo, the clinical trials business whose precursor (Open Orphan) he listed six years ago, Friel has narrowed his focus – for now, at least – to what he calls “two kindergarten-phase” companies originally hatched in his Raglan Capital incubator for listable companies.
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These are Poolbeg Pharma, spun out of Hvivo in 2021, which is focused on developing a potentially breakthrough pill (known as POLB 001) to protect against certain negative reactions to cancer immunotherapies; and European Green Transition (EGT), whose interests currently comprise a Swedish rare earth minerals prospect and a Donegal project aimed at using peatland to generate carbon and biodiversity credits.
The aim is ambitious: to find the next Amryt Pharma, the biopharma company Raglan floated in 2016, which was bought two years ago by Italy’s Chiesi Farmaceuti in a €1.4 billion deal (including follow-on payments after milestones were met). That firm developed a breakthrough therapy for a rare and painful skin disease, called epidermolysis bullosa, that mostly affects children.
Poolbeg, in which executive chairman Friel owns a 5.9 per cent stake, revealed on the first day of trading this year that it was in merger talks with Nasdaq-listed peer Hookipa Pharma, which was in the middle of major restructuring programme. However, Hookipa walked away in late February when its finances looked less precarious as it secured an almost €20 million of research grants from the Austrian government.
[ Poolbeg focuses on ‘Plan B’ after US merger talks collapseOpens in new window ]
“Some of the best deals are the often ones you don’t end up doing,” he says. “I certainly wouldn’t be in Donegal right now if it had gone through. I would have been spending most of my time in America trying to sort out that business.”
Friel said investors who took part in a virtual roadshow for an equity raise that was to take place immediately after a tie-up with Hookipa were mostly interested in the Irish company’s 001 treatment.
“We met most of the 40 biggest North American biotech investors on that roadshow. Everyone was saying, ‘Why are you getting involved with Hookipa? Focus on 001.’ It has the potential to transform cancer treatment’.”
Poolbeg subsequently raised £4.7 million (€5.6 million) in an equity raise, mainly to get 001 ready for a key clinical trial – known as a Phase 2a trial – later this year to see if it can prevent cytokine release syndrome (CRS), a dangerous immune response triggered by certain cancer immunotherapies.
“We all became familiar with this syndrome during Covid-19, when cytokine storms caused immune systems to overreact and start attacking the body,” says Friel.
The stock market is yet to get excited, with Poolbeg shares off about 25 per cent so far this year. But Friel – a glass-half-full guy by nature – is hopeful. “If the trials are successful, Poolbeg will likely be bought out like Amryt,” he says. “It could do really, really well.”
EGT, in which Friel retains a 19 per cent stake after floating in April 2024, is at an even earlier stage.
It reported encouraging findings late last year from initial drilling at its Olserum rare earth project in Sweden. EGT does not intend to mine itself, but to find a buyer or a partner. It also has an exclusive option over the so-called Altan carbon credit project in Donegal, covering 1,370 acres of peatland. While it also took out an option early last year to buy into a project to extract copper left over from an abandoned Cypriot mine, it subsequently walked away to conserve capital.
“EGT is opportunist. We’re looking for distressed assets that we can turn around,” he says. It’s a focus that’s served Raglan – which he co-owns with his wife, Pamela Iyers – well in its deal-making on the pharma sector over the years.
Friel says he made “sub €10 million” from Amryt – a fraction what co-founder and chief executive Joe Wiley secured for his stock-options-driven interest.
The pay-day is broadly in line, he says, with what he made from Hvivo by the time he sold his last shares in that business a year ago.
“It’s not money the motivates me. I get much more fun out of putting vehicles together and doing deals and creating something,” Friel insists. “Creating too much wealth creates a problem as to how to pass on. I believe it’s important not to hand too much easy money to the next generation. Working keeps all of us sane and not having to work can destroy lives.”
Tough start
The start Friel got would have broken many others. While his entrepreneurial father built up a petrol station in Creeslough, in north Donegal [an explosion at that station, which the Friel family sold out of decades ago, killed 10 people in 2022], a Ford dealership franchise for half the county and Irish cottage rental business during the 1970s, they were badly hit when interest rates spiked to almost 17 per cent in 1981 amid a surge in inflation.
Friel, the seventh of 10 children, had to leave school at 16 to run indebted businesses when his father became ill. It left him with a lifelong aversion to debt and property investment.
“I was in the wrong place at the wrong time in the family. The older kids were at university and the younger ones were behind me in school,” he says. “I spent years dealing with the bank trying to pay down debt and get rid of things.”
He started doing night classes in computer programming with the regional technical college in Letterkenny, followed up by studying in his 20s for a degree and then a master’s in business administration at Ulster University.
Friel was subsequently asked by the university to become a part-time lecturer of international marketing and business policy, which he did between 1990 and 1995. After selling off the family business in 1996, he took off backpacking for a year, during which he turned 32, to travel southeast Asia. This was funded in part by taking some money off the table as early small investor in insulation group Kingspan, which had floated in 1989.
Returning to Ireland on Good Friday 1998 – the date of the Belfast Agreement – Friel started sending out CVs. Following close to 50 interviews that summer, he was finally hired by businessman Jim Maher, founder of financial software company, Allfinanz. Friel worked for nothing for the first three months to get a foot in the door. A year later, he was Maher’s deputy chief executive. Allfinanz would ultimately end up being acquired by German reinsurer Munich Re in 2007 for €48 million, long after Friel had departed.
Media deals
Following a stint working for a venture capital fund set up by Sean Melly, the late telecoms executive, Friel joined Merrion Capital’s corporate finance unit in early 2001. “It was another complete career reinvention and required a lot of fast learning,” he says.
He developed a niche in the media sector, selling local newspaper companies and radio stations. He advised on the likes of the €34 million sale of the Meath Chronicle in 2002 and UK media group Emap’s €200 million disposal of Today FM, FM104 and Donegal’s Highland Radio to Denis O’Brien’s Communicorp in 2007.
He also worked with Scottish media group Johnston Press when it acquired Leinster Leader and Local Press groups for a combined €236 million. Friel says, however, that he recommended Johnston Press, which was on an acquisitions spree at the time, not do the deal, because of the mad price. “But hats off to anyone that sold a radio station or regional newspaper at that time – because they did really, really well,” he said.
By the time the Emap deal was completed, Friel was already working part-time setting up Raglan Capital – which was initially set up to be part corporate finance boutique and part investment firm, targeting turnaround opportunities among companies listed on London’s junior Alternative Investment Market (AIM).
At Raglan, he advised on the sale of the Sligo Champion to Independent News & Media (INM), now Mediahuis Ireland, in 2008 for a reported €25 million. “That was the last helicopter out of Saigon for the sector, before valuations slumped,” he recalls. The last corporate finance transaction Raglan worked on was the sale of Galway businessman Gerry Barry’s financial payments business Fintrax for €170 million in 2012.
By then, Raglan’s focus was solely on putting together its own deals, often backed by the former owners of businesses he had sold during his Merrion days.
It started off in 2012 with Fastnet Oil & Gas, an exploration venture backed by top executives at Cove Energy, John Craven and Michael Nolan, as the Mozambique-focused business was being sold to Shell for €1.2 billion. Fastnet gained an AIM quotation by reversing into a listed cash shell.
The Government should double all existing housing height limits overnight in every part of the country, make it more difficult for people to object to new housing developments and ban all judicial reviews on residential planning decisions
— Cathal Friel
Fastnet became involved in exploration in the Celtic Sea and off the Morocco coast. However, in the wake of an oil price collapse in 2014, Friel engineered a spin-off of the exploration assets and pivoted to the pharma sector. It did this by merging in 2016 with Amryt, a company Raglan had just set up with Wiley to focus on buying and developing drug candidates for rare and orphan diseases. The deal was essentially an initial public offering (IPO) as it involved a €12.6 million stock offering.
Friel backed away at that stage to allow Wiley and Amryt’s chief financial officer, Rory Nealon, do their thing under chairman Ray Stafford, founder of Sudocrem. “I always try to find really good CEOs and CFOs and not get in the way after that,” he says.
Still, he remained on the board until 2017 and a shareholder until Amryt’s sale in 2023 – a deal that was driven by its transformational purchase in the interim of a much larger US company, Aegerion, out of bankruptcy. Aegerion had two regulator-approved drugs generating revenues at the time.
Hvivo
Friel, in the meantime, orchestrated the IPO of Open Orphan, a pharma services company, in 2019 through the reverse takeover of Dublin-listed Venn Life Sciences. The company went on later that year to buy UK clinical trials business Hvivo, which was struggling at the time, and went on to rename the group Hvivo in late 2022.
Hvivo’s market value peaked at almost £260 million (€300 million) in early 2021, just before it spun off Poolbeg and when its business in conducting human challenge trials for treatments for infections and respiratory diseases was going gangbusters during the pandemic. Friel sold his final shares in the company a year ago.
[ Ireland’s Mr IPO and his plans to make more companies publicOpens in new window ]
While the shares moved sideways for about four months after his exit, they have subsequently fallen more than about 60 per cent amid a cyclical downturn in clinical trials. This was accelerated in May when Hvivo told investors of the cancellation of a “significant” contract and the postponement of another.
“When you see a founder selling, it’s usually a signal. There was a massive bubble in clinical trials post pandemic,” he says. “It’s still a very good company. But it’s a cyclical sector.”
Hvivo chief executive Yamin Khan gave an insight into working with Friel in an interview with the Business Post last month, after Friel stepped down as chairman. “He hired me, he mentored me, [and I] really liked working with him,” he said. “I think Cathal, he gets bored quite easily, he wants to do the next thing.”
[ Hvivo revenue rose last year as company diversified servicesOpens in new window ]
Or ponder solutions on challenges facing business and society, which he often commits to published opinion pieces.
Take the Irish stock market, or Euronext Dublin, which has seen a wave of company exits and dearth of new listings over the past decade. “It needs to be taken away from the orbit of the Department of Finance and given to the Department of Enterprise, Trade and Employment to develop ideas to reboot it. That department is in charge of two of the most successful state development bodies in the world – the IDA and Enterprise Ireland,” Friel offers.
Or the housing crisis. “The Government should double all existing housing height limits overnight in every part of the country, make it more difficult for people to object to new housing developments and ban all judicial reviews on residential planning decisions.”
On artificial intelligence, he offers: “It’s here to stay. I’m convinced that, just like with the arrival of the motorcar and the PC revolution, AI will create far more jobs than it eliminates – and may even herald the arrival of formal four-day working week.”
While Friel is set to turn 61 later this year, he reckons he still has “another 10 years in me” at Raglan.
“It’s good fun. I always have to be planning the next deal. There’s nothing imminent, but I’d likely to continue doing one every two or three years,” he says. “First I’ve got to deliver the goods with Poolbeg and EGT.”
Name: Cathal Friel
Position: Founder of Raglan Capital, which has been behind five AIM-listed companies
Family: Married to Pamela Iyers. They have two sons, aged 17 and 15, and a 13-year-old daughter
Lives: Monkstown, south Co Dublin
Something about Cathal Friel that readers might expect: Every summer, he spends a few weeks in Dunfanaghy, Co Donegal, fishing, boating and generally relaxing with his children while his wife enjoys a well-earned break with family in Austria
Something that might surprise: He did close to 50 failed job interviews when he returned to Ireland after a year backpacking in Asia – before landing a job working for free for three months.
