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Slim Pickings…? October 8, 2007

Posted by shubber in Manned Space, NASA, pickens, public service announcement, Wasting Money.
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Thomas Pickens III seems to think that the future opportunity for making the ISS that success that we all deep down know it can be </sarcasm> is to get the pharmaceutical industry to line up to use it… if only they knew how valuable it was!

“If people knew what I already know, the International Space Station would be considered one of the most valuable resources our world possesses,” Pickens said at the ISS National Laboratory Workshop last week. – Wired

Well, if only Mr. Pickens knew what I already know – that industry was extensively surveyed in the late 1990s as to their interest in using ISS for commercial research and the resulting feedback was NOPE, NADA, ZIP, NO INTEREST, PISS OFF, NO THANK YOU…. perhaps he would save himself from the latest pyrrhic endeavor for SpaceHab.

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For those who don’t know the backstory, allow me to set the wayback machine to the early 1990s, when Dan Goldin told the “big lie”…

In an impassioned attempt to save the ISS from cancellation in Congress, some pretty bogus claims were made about the value of ISS to industry, and more specifically that industry was so itching to use this amazing facility (which had already cost over $10 billion without any hardware even launched yet…) that NASA was promising over 30% of the costs would be covered by industry.

Of course, as the costs escalated and those pesky bean counters started looking at TOTAL life cycle costs, the price tag for ISS had shot up to almost $100 billion by the time it would be completed. Knowing that industry would never pony up $30 billion for this orbiting locker room, the claim was modified to mean “30% of operating costs”. Which was a much more palatable $1.2 billion annual expenditure.

Supporters of ISS (you know who you are) rallied around this number as being much more defensible – after all, the total spending in the US on R&D (private industry, government, and university) in the late 90s was approximately $80 billion annually, so what was $400 million in the big picture? SURELY that would be spent on ISS, right?

WRONG.

What the booster/hucksters failed to look at was the % of R&D funding that was translatable to ISS from terrestrial labs. Luckily, some of us did look at that.

Turns out, you can break R&D into three categories – basic science, applied research, and production R&D. Basic science in the US in the late 90s accounted for about $8 billion of the $80 billion spent on R&D – and much of that was conducted at the Federal lab or University level. The vast majority was on Production R&D – the sort of thing that would NOT be done in the furnaces on ISS. Now $400 million taken out of $8 billion is 5%.

5% of ALL basic science R&D performed across the entire United States would be shifted to the ISS?

Sounds like BS, doesn’t it? Which is precisely what it was.

So, in the best tradition of space repeating itself every 10-15 years, along comes Mr. Pickens with another “ISS is the place for pharma research!” media campaign. Which sounds eerily similar to Dan Goldin in the 1990s.

I understand he is Chairman of SpaceHab, and has to do whatever he can to increase shareholder value (or the share price, if you’re cynical) while he’s there… I think that the outcome of Mr. Pickens’ attempts to commercialize ISS through big pharma will be the same as that of Slim’s ride on the A-bomb…. somehow I just don’t think it’s nearly as funny. I’m betting the shareholders will feel the same way. Just look at the performance of SpaceHab over the past decade…  And that’s a real shame, because Pickens is a smart guy, and if there’s a chance of turning around SpaceHab I’d say he’s the kind of guy to do it (someone who is *not* a space tragic).

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p.s. – for those who read the linked Wired article, note that the cost of ISS has been moved up again, now at $130b and counting. Pretty soon it will have cost almost as much as a Space Based Solar Power Satellite….

Comments»

1. Brian - October 9, 2007

Pretty soon it will have cost almost as much as a Space Based Solar Power Satellite….

You need to double that figure if the SPS is built by NASA …

2. Ashley Zinyk - October 9, 2007

You may have a good laugh at this podcast from 2000:

[audio src="http://www.cbc.ca/quirks/archives/00-01/mp3/qq281000a_iss.mp3" /]

NASA’s defender, Roger Crouch, is probably the worst advocate for space research I’ve ever heard. According to him, having no research plan means that the discoveries will be even more exciting. ISS microgravity, you see, is fundamentally new kind of environment (not like the environment on the shuttle or Mir), so lots of grand discoveries are just around the corner (he said seven years ago). Yup, it’s not just about spending billions of dollars to learn about new and exciting ways to vomit and lose bone mass; we’re on the cusp of a whole new science!

Yeah, right.

3. Brian - October 12, 2007

Another reason that industry might shy away from using ISS.

– Government facility.
– One of a kind.
– Expensive to get to.
– Monopoly carrier services the site and is subject to long interruptions in service.

Other than THAT it’s the perfect place for manufacturing.

4. Sorting Out Science » Blog Archive » Carnival of Space #25 - October 18, 2007

[…] so far short in encouraging female participation in science and engineering. Meanwhile, shubber at Space Cynics wonders just how useful the station really is in the long run — although the Chinese […]

5. Gary - October 18, 2007

To Brian’s list of deal killers add a really big one for bio research:

– Infrequent access; it seems the bio people want to get samples up and down at least once a month, preferably oftener.

6. Justin - April 16, 2008

It is so easy to play devils advocate but much harder to identify and create value. Pickens is a very seasoned corporate manager having been one of the pioneers of the independent power industry when he was transforming the stoic utility industry at 28 years old as CEO of the multi billion dollar company Catalyst Energy Corporation.

Now as Chairman and CEO of Spacehab, Inc. he has undoubtedly researched the over 1500 experiments the company has sent to space over the past 23 years and has very likely found something of value. I just can’t imagine this guy, as credible as he and his family is just simply shooting from the hip.

None of you on the blog have access to the information or the scientists that Pickens has and lets admit it, while there may have been plenty of micro-g value found, when STS-107 crashed all science funding was canceled with Spacehab in the ideal position to pick up the golden nuggets and polish them off for its shareholders.

I commend his efforts, he has turned the company around by wiping off over $60M in debt and exhibits such characteristics as being both smart and brave, add a great deal of world class experience and you guys are the ones that look cynical and meek.

Go Spacehab!

7. shubber - April 16, 2008

It is so easy to play devils advocate but much harder to identify and create value.

I won’t argue with that. However, this does not diminish the validity of playing devil’s advocate when you actually DO have experience with the subject matter at hand (ISS commercialization in this case).

I just can’t imagine this guy, as credible as he and his family is just simply shooting from the hip.

What his father did/does has no bearing on his capabilities… and you lack imagination of any sort, it would appear.

None of you on the blog have access to the information or the scientists that Pickens has and lets admit it, while there may have been plenty of micro-g value found

Not true – you have no idea what involvement I had in researching ISS commercialization, LONG before Mr Pickens joined the bandwagon. And no, there *hasn’t* been plenty of micro-g value found – there’s lots of fantasy talk about cures for diseases and creation of cool materials, but it’s remained just that. Columbia’s disintegration was just a convenient excuse for the boosters as to why it hasn’t happened.

I commend his efforts, he has turned the company around by wiping off over $60M in debt and exhibits such characteristics as being both smart and brave

In the final analysis, this is what matters to his shareholders:

http://finance.yahoo.com/q/bc?s=SPAB&t=6m

So how has the stock done in the past six months? Oh, that’s right – gone from over $3/share to about $0.52/share. Some performance. How you call this “turning the company around” is beyond me. I suppose your cracker jack MBA taught different metrics than the traditional b-school… I think you should consider dating him, though, since you are obviously infatuated with him.

8. Thomas Olson - April 16, 2008

“None of you on the blog have access to the information or the scientists that Pickens has and lets admit it, while there may have been plenty of micro-g value found”

I agree with Shubber – you don’t have a clue who we have access to and who we don’t. But here’s a personal head’s up for you: I have access to Pickens himself, thanks to my work with the Space Investment Summits. So I guess if I have any questions of that nature I can simply e-mail and ask him. He’s quite approachable.

9. shubber - April 21, 2008

So how has the stock done in the past six months? Oh, that’s right – gone from over $3/share to about $0.52/share.

I stand corrected – it’s now at a whopping $0.37/share.

Go long Justin – you stand to make a killing if you really believe in SpaceHab.

10. Justin - April 21, 2008

It always amazes me when people with absolutely no experience in corporate turnarounds (or even operating a business) attempt to opine on the value of someone that saved a company from the jaws of bankruptcy. Pickens was on the board of directors for over two years has undoubtedly used the corporate resources to verify any findings and then took over as the CEO redirecting the company towards the obvious opportunities of building the Astrotech subsidiary and starting a very interesting biotech company.

I have watched Pickens for years and he is an absolute pro at turnarounds but is also a pro at identifying and developing commercial value. Everybody that has watched or worked with Spacehab through this transformation is in awe of his progress and I know for a fact that he as earned enormous respect for his intelligence, honesty and creative solutions.

In terms of what he may have found in microgravity that you guys have overlooked, it looks like from this press release that they have already found something in vaccines and just to be careful are sending it up again on the next Shuttle flight to verify the findings. I seriously doubt Pickens and his team would be sending the same thing up twice if they didn’t find anything the first time.

The part you people are missing is entrepreneurial vision, focus, tenacity and success that is exhibited in this country every day; just not from people like you, who have never started a business, bet on anything but a slot machine at Vegas and scope of creativity is limited to what kind of fertilizer your going to put on your yard this summer.

Nope, I’ll place my bet on Pickens, I think he found something that you guys missed, because I know from many that know him, he is very good at what he has done for the past 25 years. In full respect of what you do for a living which I’m sure you are very good, this is what he does for a living.

AND PLEASE RESPOND TO THE FOLLOWING:
It is so easy to play devils advocate but much harder to identify and create value.
I won’t argue with that. However, this does not diminish the validity of playing devil’s advocate when you actually DO have experience with the subject matter at hand (ISS commercialization in this case).
WHAT IS YOUR EXACT EXPERIENCE WITH ISS COMMERCIALIZATION?
I just can’t imagine this guy, as credible as he and his family is just simply shooting from the hip.
What his father did/does has no bearing on his capabilities… and you lack imagination of any sort, it would appear.
IT DOESN’T HAVE ANYTHING TO DO WITH HIS FATHER, AS I MENTIONED HE WAS RUNNING A MULTI-BILLION DOLLAR COMPANY HEADQUARTERED IN NYC AT 28 YEARS OLD. HOW DO YOU BRING IS FATHER INTO THAT DISCUSSION. GET YOUR FACT STRAIGHT BECAUSE YOU JUST LOST ALL CREDITABILTY WITH THIS STATEMENT.
None of you on the blog have access to the information or the scientists that Pickens has and lets admit it, while there may have been plenty of micro-g value found
Not true – you have no idea what involvement I had in researching ISS commercialization, LONG before Mr Pickens joined the bandwagon. And no, there *hasn’t* been plenty of micro-g value found – there’s lots of fantasy talk about cures for diseases and creation of cool materials, but it’s remained just that. Columbia’s disintegration was just a convenient excuse for the boosters as to why it hasn’t happened.
SO HAVE YOU SPENT MONEY? HOW MUCH MONEY? WHERE WAS IT SPENT? WHERE DID YOU GET THE MONEY? ETC.
I commend his efforts, he has turned the company around by wiping off over $60M in debt and exhibits such characteristics as being both smart and brave
In the final analysis, this is what matters to his shareholders:

http://finance.yahoo.com/q/bc?s=SPAB&t=6m

So how has the stock done in the past six months? Oh, that’s right – gone from over $3/share to about $0.52/share. Some performance. How you call this “turning the company around” is beyond me. I suppose your cracker jack MBA taught different metrics than the traditional b-school… I think you should consider dating him, though, since you are obviously infatuated with him.
WHEN PICKENS TOOK OVER THE COMPANY ONLY HAD ASTROTECH WHERE HE HAS PUT FORTH A VERY CREDABLE FORWARD VISION OF A DoD HOT BUTTON CALLED “OPERATIONAL RESPONSIVE SPACE” FOR WHICH ASTROTECH IS PERFECT FOR. FOR A COMPANY TO RECOVER, THE FIRST THING YOU DO IS TRY AND SAVE IT WHICH HE HAS DONE, THEN YOU HAVE TO REDIRECT IT AND THAT TAKES TIME. SO HOW MUCH EXPERIENCE HAVE YOU HAD WITH TURNAROUNDS?

11. Justin - April 21, 2008
12. shubber - April 21, 2008

Angry much, or just have a cheap-ass laptop with a stuck caps-lock key?

13. shubber - April 21, 2008

You said: I just can’t imagine this guy, as credible as he and his family is

I responded: What his father did/does has no bearing on his capabilities…

You screamed back: IT DOESN’T HAVE ANYTHING TO DO WITH HIS FATHER… HOW DO YOU BRING IS FATHER INTO THAT DISCUSSION. GET YOUR FACT STRAIGHT BECAUSE YOU JUST LOST ALL CREDITABILTY WITH THIS STATEMENT.

I reply: first, unless you were referring to his mom, his siblings, or his children, none of whom I believe have made a name for themselves in corporate performance/turnarounds/etc, then by process of elimination you MUST have been referring to his father when you said “as credible as he and his family is”.

And the word you were searching for in your screaming reply was “credibility” and not whatever the fuck you wrote.

I’m done with you. Go light another candle at your Pickens shrine you git.

14. Justin - April 21, 2008

Charming!

15. shubber - April 21, 2008

Yeah, whatever. Don’t come into our house spouting drivel and questioning our positions in a rude manner and expect us to put up with it. I posted meaningful responses to your first pass through, and you came back with a series of rants.

So you got pwned. Deal with it.

16. shubber - April 21, 2008

Also, you said: Nope, I’ll place my bet on Pickens, I think he found something that you guys missed, because I know from many that know him, he is very good at what he has done for the past 25 years.

I reply: As I asked you before, why don’t you put your money where your mouth is? The stock is down into the 30 cent range now, you should be putting your life savings into SpaceHab since you stand to make many times that if he simply gets the stock back to where it was not too long ago… Unless you are just talk, of course.

17. Justin - April 21, 2008

I am a stockholder… and by the way you didn’t answer.. your experience? How much mony did you spend on the research? How much time did you spend on it? Yea, sorry I have to ask the tough questions, but somebody has to…

18. Here We Go Again… « Space Cynics - April 23, 2008

[…] out of microgravity pharma (perhaps only if NASA will give him a little bit of folding money..?).  As I pointed out last October, there ain’t no “there” there, and Mr. Pickens was, sadly, suckered into trying […]

19. Vladislaw - April 24, 2008

Pretty much without exception EVERY facility of NASA’s has a tourism center where they are sell trinkets. Millions of americans travel to these places for various reasons and events. The ABSOLUTE most expensive NASA center is the U.S. segment of the ISS. And the ONLY one with no tourism center.

Why isn’t there a transhab there where tourists can stay a couple days and look around. Delicate and sensitive experiments take place at NASA centers all over the USA and still tourists are plodding through taking pictures, so that arguement is false as it relates to the ISS.

At a similiar committee meeting to the one held April 24th 2008 was one held in 2001 and NASA was asked to “SHOW A PATH to commerical tourism” for the ISS. Nasa said they could not answer that question in front of a microphone off the cuff but they would supply a written response. That is something that after SEVEN YEARS they have not done.

The committee didn’t as NASA to FUND tourism, JUST show a PATH. Now seven years later as the russians are getting ready to wrack up 35 million for ANOTHER tourist visit what is our response at the committee meeting on the 24th for ISS commericalization?

NOT ONE WORD!

“The Russians just launched a satellite! ”
“America launched a satellite!”

“The Russians just launched a man into space!”
“America just launched a man into space!”

“The Russians just launched ANOTHER civilian tourist to the ISS!”
“America just ………………

Man how sad is that.

This committee meeting was just more of the same, no banging your fist on the table about THIS IS WHAT AMERICA NEEDS. No urgencty, other then the urgentcy to finish your questions and answers in just a couple minutes so it could end. With the authority UDALL has he can call for a meeting to last days if it something that is in dire need of attention.

20. Justin - June 1, 2008

well it look like you blew it again….

Thats why he’s rich and your poor…

LOOSERS

http://afp.google.com/article/ALeqM5jXlhaN5juZxm4ssK0X_SnJUdYNfw

21. shubber - June 1, 2008

two reasons why you are the loser:

1) you don’t know the difference between a prediction and a fact (or, perhaps, you just suck at reading comprehension)

2) you don’t know how to spell loser. But at least we’ve corrected that problem. Now go sit in the corner and wear the pointy hat until you wisen up.

22. Justin - June 9, 2008

Ah, loser vs. looser…. your right I am unfamiliar with the correct spelling… it is no surprise that you are!

More news from SPACEHAB… looks like they found a vaccine for salmonella…

http://www.orlandosentinel.com/features/food/orl-spacevax0808jun08,0,5616729.story

I’ve always been fascinated as to how wrong people can be but still try so desperately to convince .. well anybody… and there is no doubt, this blog represents the fringe believers of anything negative..

23. shubber - June 10, 2008

looks like they found a vaccine for salmonella…

looks like you’re smoking crack, again. Do you actually know how to read or are you really just obstinately retarded?

24.  - March 31, 2011

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