Kiwi biotech crosses the Tasman

Held in Melbourne in late October the convention attracted around 1400 delegates from 30 countries.

One of the New Zealand companies attending had an important mission: to find further investment by mid 2010, when it completes its initial phase 2 clinical trial, or progress no further.

Biotechnology companies typically need large investment upfront, which they then burn off as clinical trials progress. They have to meet stringent standards and the tension is whether they can produce a marketable drug or device before investors’ funds and confidence dries up. Drug companies can take up to 10 years or more to get to market; device companies five.

The company, CoDa Therapeutics, has already attracted US$23 million of investment. It is registered in both New Zealand and the US. It has an office in San Diego, where its President and CEO Brad Duft is based. This allows close contact with US investors, which they like.

CoDa Therapeutics is developing a wound healing therapy that helps the body dampen down inflammatory responses and decreases the spread of a wound. Duft says there are about 50 companies involved in wound-healing world-wide but none have a therapy that engages the body’s own healing mechanisms in the way CoDa’s does.

“There have been many failures in therapeutic wound healing but our therapy is based on new medicine. Based on our initial data as well as safety data from phase 1 trials on skin and the eye, we know we have something extremely important. If phase 2 trials are successful and verified in phase 3, it will be revolutionary.

“That’s very exciting. We have a good story. It’s easy to explain at the molecular level and people get it.”

Duft and Chief Operating Officer Tracey Sunderland, based in Auckland, were pleasantly surprised by the meetings they were able to arrange at AusBiotech2009. They hadn’t originally intended to go to the conference but were convinced by NZBIO and met with eight companies.

“It was the most valuable bio event we’ve attended,” says Sunderland.

“Interest was good and some contacts are being followed up on.”

“Things are opening up a little in the funding market,” says Duft. “There’s lots of money on the sidelines that’s not being invested, for all sorts of reasons.”

A similar observation was made by Dieter Adam, New Zealand Trade and Enterprise’s Operations Director for food and beverage and biotechnology, who also attended AusBiotech2009.

“The dollars are flowing again but they’re difficult to attract and venture capitalists are cautious. Funders prefer to have you on their doorstep, which doesn’t work in New Zealand’s favour, but what does is that US investors are fundamentally fond of New Zealand.”

Adam observed that the main game where the money lies is human therapeutics, not animals.

“People will pay significant dollars for their grandmother but not for their dog.”

Even with final FDA approval for their drug or device, some companies are finding it hard to negotiate the complexities of the US health agencies and secure sales.

Adam says some drug companies are now willing to take more of a risk and be involved with companies at an earlier stage. “This could be an advantage for New Zealand companies with a new drug or medical device as most won’t have the resources to go the whole way.

“In New Zealand, we do see companies running out of cash in the middle of their drug development programme.

“If we want a vibrant industry, we have to ask ourselves what other things can we do, as I can’t see that business-as-usual will get us there.”