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The variety of approaches and focuses among Australia’s range of life science companies is amazing. The research and intellectual property that comes out of Australian universities and companies is very highly regarded around the world, and for good reason.
Here are four very different examples of Australian biotechs pushing the knowledge envelope, with potentially very lucrative outcomes. Biotech is not a sector for faint-hearted investors there are many possible pitfalls, and some of the companies below have experienced them – but the rewards for the patient investor can outweigh the fluctuations along the way.
Noting the high risk-high reward proposition, here are the companies:
Neuren Pharmaceuticals has two main drug candidates in development: Trofinetide and NNZ-2591. Trofinetide is targeting the rare neurological conditions known as Rett Syndrome and Fragile X Syndrome and is also being investigated as a treatment for traumatic brain injury.
Rett Syndrome is a form of autism that affects about one in 10,000 females, and is characterised by intellectual disability, loss of motor control and muscle rigidity. Fragile X is an inherited chromosome mutation known as a cause of autism, which according to Neuren’s 2018 Annual Report and research cited by the Royal Australian College of General Practitioners affects about one in 4,000 males and one in 6,000 females globally.
The second drug candidate, NNZ-2591, has demonstrated potential use across a broad range of neurological conditions – including cognitive impairment, Fragile X syndrome, stroke, Parkinson’s disease and multiple sclerosis – and earlier this month, Neuren announced that NNZ-2591 had demonstrated positive effects in a pre-clinical model of Phelan-McDermid syndrome (PMS), a rare genetic condition in which the most common characteristics are intellectual disability, delayed or absent speech, symptoms of autism, low muscle tone, motor delays, and epilepsy. In the first instance, Neuren is targeting the drug at autism spectrum disorder: there are no drugs for this at present.
Trofinetide is further down the path to commercialisation. Last year, Neuren struck a deal with US company Acadia Pharmaceuticals, under which Acadia takes the North American rights to Trofinetide , in return for funding the estimated $US55 million ($77.5 million) cost of a planned 180-patient Phase 3 trial for Rett Syndrome, to start in the second half of 2019.
Neuren received US $10 million upfront; it will receive a royalty flow plus potential milestone payments of up to US$455 million in total; and it retains all rights to Trofinetide outside of North America. It was (and remains) an excellent deal, but for some reason the Australian market was disappointed, taking more than 40% off Neuren’s market capitalisation last August.
That seemed strange, given the potential of the deal to get Neuren’s drugs to market. Because there are currently no medicines approved for the treatment of Rett Syndrome or Fragile X Syndrome, the US Food & Drug Administration (FDA) has granted Trofinetide Fast Track Status and Orphan Drug Designation, while the European Medicines Agency (EMA) has granted Orphan Drug designation (the objective of the Orphan Drug program is to provide incentive to companies to bring medicines for a small population to the market) to Neuren for Trofinetide in Rett Syndrome.
Neuren has taken a long time since its 2005 float to bring home the bacon, but with Acadia funding the Phase 3 trial for Rett Syndrome later this year, it appears to be in its strongest commercial position yet.
Floated in August 2016, AdAlta has developed a proprietary technology platform that generates a new class of protein therapeutics called i-bodies, which are modelled on shark antibodies.
The technology was developed at the La Trobe Institute for Molecular Science (LIMS) at Melbourne’s La Trobe University, where work on shark antibodies discovered that they had unique features, in particular, a long binding loop that is not present in human antibodies.
LIMS researchers realised that the long loop of the shark antibodies made them much more efficient than normal monoclonal antibodies in binding to a drug target: AdAlta was formed to commercialise the research, which developed a blueprint to engineer two loops into a human protein, mimicking the shark antibody. These super-long loops enable much tighter binding to the drug target, to enable much more targeted therapeutic intervention in disease.
The lead candidate of AdAlta’s proprietary i-body protein therapeutics platform is the AD-214 molecules, which is being developed to treat Idiopathic Pulmonary Fibrosis (IPF), and other human fibrotic diseases. IPF is a disease in which scar tissue forms in the lungs, with no precisely determined cause: it is a highly progressive disease that kills 50% of sufferers within three to five years of diagnosis. The two currently approved drug therapies for IPF are considered to, at best, slow the progression of the disease, and there is a large unmet medical need that AD-214 could potentially solve.
The company’s initial version of the i-body, AD-114, received Orphan Drug Designation from the FDA for the treatment of IPF in 2017, on the back of pre-clinical studies that showed that it had the potential to reduce both lung and liver fibrosis in mice: the upgraded version, AD-214, retains this designation.
AdAlta is currently developing cell lines for the manufacturing process for AD-214: as AD-214 is made using different technology to the original drug, AD-114, it requires an alternate manufacturing process. The company says it is on target to deliver Good Laboratory Practice (GLP) material for its four-week non-human primate toxicology study, which is expected to commence in July 2019; and be completed in second half of 2019.
AdAlta says it is also on track to deliver Good Manufacturing Practice (GMP) material for its Phase 1 human study, which is expected to commence in January 2020. AdAlta plans to continue work to extend the potential application of the i-body technology platform to other diseases and drug targets.
Floated in May 2012, medical device company Osprey Medical was formed to commercialise technology that was developed at the Baker IDI Heart and Diabetes Institute in Melbourne. The technology came from the realisation that the X-ray-visible dye that cardiologists inject during common heart procedures such as stenting and angioplasty – dye that is used as a contrast medium to help the doctors certain body parts and interpret the X-rays better – was actually causing problems in some patients.
Patients with normal kidney function don’t usually have a problem with the dye, but about 25% of all patients undergoing heart operations and stenting procedures have pre-existing kidney disease and the dye can cause damage – known as contrast-induced acute kidney injury (CI-AKI) – when it filters through the kidneys. This can lead to permanent kidney injury, which can result in patients requiring short-term dialysis, but in some cases, it can result in permanent kidney failure and even death. Patients who experience CI-AKI have a five-fold greater chance of dying in the 12-months following their coronary procedure.
Professor David Kaye and his team at the Baker IDI Heart and Diabetes Institute invented a system to reduce the amount of dye reaching the patients’ kidneys. Osprey Medical has developed the technology into the DyeVert and DyeVert Plus systems, which reduce the amount of dye reaching the kidneys by up to 40%, with no impact on image quality. Patients get the angiography quality they need, while the reduction in dye effect on the kidneys results in shorter hospital stays, improved patient outcomes, and may ultimately save patients' lives.
DyeVert was cleared for sale in the US by the FDA in November 2015, and results from the first hospital buyers showed superior results to the existing market product, known as AVERT – on the back of these results, the FDA cleared Osprey to use its main marketing claims, relating to dye savings, image quality and reflux reduction. DyeVert Plus is the only technology cleared by the FDA for contrast reduction and real-time monitoring of dye dose delivered to patients during a coronary or peripheral angiogram. Osprey’s products have also been cleared for sale by the Therapeutic Goods Administration (TGA) in Australia, and the CE Mark in Europe.
In 2018, Osprey announced four contracts with leading GPOs (group purchasing organisations) in the US: going through the US GPOs is now the main thrust of its marketing strategy. The total addressable market is in the order of US$1.65 billion ($2.3 billion). The company has market-leading technology in a clear area of unmet medical need, and Osprey seems poised to live up to its promise – for which loyal shareholders have required patience. Investment management firm Allan Gray invested $10 million in November 2018, which should also encourage Osprey shareholders.
The link between gut health and mental health has been an increasingly prominent scientific story in recent years. The gut ‘microbiome’ – the trillions of microorganisms that live in the intestinal tract – is now generally well understood to be involved in functions critical to health and wellbeing, but more recently, the role of gut microbes (bacteria) in mental and neurological health is starting to be identified.
Australian biotech Medlab Clinical (MDC) will shortly commence a Phase 2 clinical trial, being led by Queensland University of Technology (QUT), to investigate the potential use of MDC’s probiotic (“good” bacteria) NRGBiotic, which is used to improve gut health (that is, the microbial profile) in treating depression.
The NRGBiotic will be administered to patients in conjunction with a standard anti-depressant, with the results picking up on the connection between the gut and brain, and the expected consequent effects on mood. The trial is testing the proposition that, since 30% of people suffering depression do not respond to medication, improved gut health will increase the body’s ability to absorb the standard anti-depressant.
Recruiting for the trial coincides with new European research (published in Nature Microbiology) which showed depletion of certain bacteria in the gut correlates highly with depression.
Apart from its work in depression, Medlab Clinical is also developing therapies for pain management – using cannabis-based medicines – and obesity. The company also sells nutritional products in Australia and the US.