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The Australian Financial Review | 16 Mar 2007
Australia could be on the verge of commercialising a multibillion-dollar HIV/AIDS drug after biotechnology company Avexa called a trading halt yesterday in preparation for the release of key trial results. Biotech analysts and industry insiders said Avexa's Phase IIb trial of its apricitabine (ATC) drug has produced a better than hoped for result, with ill patients showing a significant drop in their viral loads. To date, all HIV/AIDS drugs that passed Phase IIb have gone on to commercialisation. Avexa will also trigger a capital raising of about $25 million to help fund the next stage of ATC as it looks to forge a distribution and partnership deal with a major US pharmaceutical company. Avexa is expected to announce on Monday that the 50 patients enrolled in its drugs trial reported a 0.8 logarithmic decline in viral loads against a targeted 0.6 logarithmic improvement. It is particularly excited by the patient reaction because the powerful United States Food and Drug Administration (FDA) has set the benchmark at 0.5 logarithmic for a new HIV/AIDS drug to be approved. The drug also showed little toxicity, which is a major concern when doctors require stronger drugs to treat patients who have developed resistance to standard HIV/AIDS drugs. The FDA is the "gold standard" for new drugs and once accepted by that health department it is easy to gain access to other markets including Australia and Europe. The breakthrough is the success the Australian biotech industry has been waiting for after the failure of a number of high-profile and promising drug trials including Metabolic Pharmaceutical's obesity drug last month. Avexa, which is valued at $160 million, could be sitting on a pharmaceutical goldmine. In the US alone, HIV drugs sales hit $US5.6 billion in 2003 with Avexa's technology targeting the increasing number of people resistant to the first line of treatments. Shares in Avexa have rallied since December as early reports from the drug's trial were that patients were reacting well to ATC. The stock has risen by nearly 150 per cent since January and was at 68¢ before the trading halt was called yesterday. Avexa gained worldwide rights to ATC following a cash and equity deal with its partner Shire Pharmaceutical. Wilson HTM biotech analyst Graeme Wald said if the Phase IIb trials were successful it would significantly boost Avexa's value and could spark a bidding war by overseas pharmaceutical companies. "This would be quite an important addition to the choice of drugs for physicians treating HIV," Dr Wald said. He said Avexa's drug would be viewed as especially valuable because it was able to combat mutations in HIV/AIDS. Avexa was spun out of biotech company Amrad in 2004 and started life with a market cap of only $24 million. Its major shareholders include biotech investment and venture capital company Circadian Technologies, Mirrabooka Investments and the Liberman family's Jagen Pty Ltd fund.