Sir Paul Callaghan considers himself a lucky man. Not because he's the leader of the team that's just won this year's Prime Minister's Science Prize of $500,000. He's won prizes before, plenty of them - the Ampere Prize, the Rutherford Medal and the Gunther Laukien Prize to name a few.

Nor that his team's work in the rarefied world of nuclear magnetic resonance is so widely published - some 250 scientific papers between the five of them with a citation "h-index" of 46 which puts them up there with Nobel Prize winners. "I've been hugely well recognised and I sometimes wonder why - I've been lucky that way," he says with typical modesty.

The real reason Callaghan regards himself as lucky is because he's still here. Diagnosed with bowel cancer in 2008, followed by surgery and chemotherapy, the outlook wasn't great.

"Unfortunately the tumour had got through the wall and spread cells into my abdominal cavity - I had multiple tumours throughout my peritoneum." A fatal condition with no cure.

"So I was told to organise my life. I still had a book to finish, I've got that done."

But then a couple of things happened which gave him a new lease of life. In what he describes as "a bit of an amazing journey this year", he took a second course of chemotherapy.

It was a more aggressive set of drugs not funded by Pharmac and costing $28,000 which he paid for using his prize money from the prestigious American Gunther Laukien award he received earlier this year.

"Cancer is a rich man's disease - you don't want to be poor and have cancer," he said at the time.

Much to his oncologist's surprise he had a remarkable response to the new drugs. "Lucky genetic make up, shall we say. It knocked it back to a plateau level which was by no means cured - I still had plenty of cancer in me, but it bought me time."

It was then that he learned from his son, a surgeon living in the UK, of a radical new technique - cytoreduction surgery with peritonectomy and hyperthermic intraperitoneal chemotherapy.

The surgery is not available here, but one of the leaders in the field operates at St George Hospital in Sydney and Callaghan was able to apply under a government scheme that funds specialist surgeries in other countries. The cost was about $100,000.

"It's basically a cost benefit analysis thing that they do. It's a great scheme. I feel very lucky that we live in a country that does that sort of thing."

The surgery on the other hand is traumatic - involving the removal of all visible cancer from the abdominal cavity and removal the peritoneum. "Then they pour a hot highly concentrated chemotherapy agent directly into the abdomen in the operating theatre and wash it around for about an hour to kill any remaining cancer cells."

Callaghan had the surgery in October and is currently at home on sick leave. "I pop into work from time. It's not necessarily a cure but it will certainly give me some years of life." He says he finds it best not to get elated about good news and not to get depressed about bad news.

"You've got to be very detached when you've got cancer. I've tried to adopt that kind of approach. I look at it from a more scientific point of view and say, 'Well this is interesting isn't it?', whatever the results. The data is the data."

Meanwhile the data is good and Callaghan is pushing on with what he does best - research - plus banging the drum for more science and technology companies as the way to transform New Zealand's economy.

"I've never had any angst or asking 'why?' when I got cancer. I just feel I'm very fortunate. There are always people out there who have got bigger struggles to deal with and you look at them and take inspiration from them."

The Prime Minister's Science Prize is shared with Robin Dykstra, Mark Hunter, Andrew Coy and Craig Eccles - all former PhD students of Callaghan's and the same group who, in 2004, formed Magritek, a technology company which makes spectrometer and other products based on magnetic resonance science.

Most of the prize money - $400,000 - will be used to endow in perpetuity a PhD scholarship at Victoria University in the field of magnetic resonance physics or engineering.

Nuclear magnetic resonance or NMR is the broad field of physics that underpins magnetic resonance imaging, or MRI, as seen in medical imaging systems used in hospitals which take high resolution images of the internal structures of the body.

Callaghan's specialty, where he's a world leader, is at the boundary of physics and chemistry - using magnetic fields and radio waves in the field of rheology, the study of the flow of soft matter.

"We developed a method to measure molecular motions - molecular dynamics - the wriggling and moving around of large molecules which turns out to be immensely important."

The work sometimes called "squishy physics" has wide application including: analysing rock samples for the petrochemical industry, measuring the brine content of Antarctic sea ice, studying the "soft-elasticity" of polymers and tracking molecules in "gooey" foods and additives, and bodily fluids such as blood.

Callaghan is acutely aware of how much his research has cost over the 30 years he's been doing it - around $12 million. That's 600 hip replacements or 120 Herceptin breast cancer treatments.

"Ultimately that sort of money is paid for by people on all sorts of incomes, including people on quite low incomes. If I'm in conversation with a cleaner who has to get up at 1am and clean buildings, how do I justify to them the science that I do?"

Callaghan says it's not enough to say science is good per se and that it benefits humanity. Which is why he advocates for scientists developing manufacturing companies based around their research - in much the same way he and his colleagues have with Magritek.

The company now has 17 staff and is growing revenues at 50 per cent a year. "We've generated a company that is employing New Zealanders, not only in the company, but in the printed circuit board manufacturers and machine shops we subcontract," he says.

"Within a year or so I would say we will have exceeded that $12 million figure and we have the potential to exceed it 10 times over, who knows 100 times over - that's when you start to get the real payoff."

Callaghan aims for Magritek to become a $50 million company within 6-8 years and argues that a few hundred similar science-based companies could provide enormous benefits for New Zealand.

Sir Paul Callaghan

New Zealand physicist, born 1947 in Wanganui. Married, two children.

Took his first degree in physics at Victoria University, Wellington followed by a Doctor of Philosophy at the University of Oxford, working in low temperature physics. Joined Massey University as a lecturer in 1974 where he began researching the applications of magnetic resonance to the study of soft matter. Appointed Professor of Physics in 1984 then Alan MacDiarmid Professor of Physical Sciences at Victoria University in 2001.

Helped establish the multi-university MacDiarmid Institute for Advanced Materials and Nanotechnology which he headed until last year. In 2004, with fellow researchers, formed technology company Magritek to manufacture small-scale nuclear magnetic resonance, and MRI Imaging products. President of the International Society of Magnetic Resonance.

1998: awarded the Royal Society of New Zealand Hector Medal.
2001: made a fellow of the Royal Society of London.
2004: receives the Ampere Prize for research in magnetic resonance.
2005: receives the Rutherford Medal, New Zealand's highest scientific honour.
2006: named Principal Companion of the New Zealand Order of Merit in 2006, knighted in August 2009.
2007: receives the Sir Peter Blake Medal and the Kea/New Zealand Trade and Enterprise World Class New Zealand award for Research, Science, Technology and Academia.
2008: awarded a two year James Cook Research Fellowship
2010: awarded the Gunther Laukien Prize for his groundbreaking work on magnetic resonance. Prime Minister's Science Prize.

Other PM's Science prize winners:
MacDiarmid Emerging Scientist Prize: Dr Donna Rose Addis of the University of Auckland for her research using MRI scanning techniques to examine brain function and investigate how imagination is lost or impaired when the brain is unable to tap into its memory bank - $200,000, with $150,000 to be used for further research.

Science Teacher Prize: Steve Martin from Howick College, Auckland, for his development of a virtual classroom, using technology to deliver online science lessons through the school intranet - $50,000 and $100,000 for Howick College.

Future Scientist Prize: Bailey Lovett, 17-year-old Bluff student who attends James Hargest College in Invercargill for research into water quality and shellfish contamination - $50,000 scholarship to help pay for tertiary studies.

Science Media Communication Prize: Dr Cornel de Ronde, a principal scientist with Crown Research Institute GNS Science currently working on a documentary about his search for the geothermal system associated with the Pink and White Terraces, destroyed in the Tarawera eruption in 1886 - $50,000 with another $50,000 for developing science media communication skills.