Merck’s head of global clinical development, Roy Baynes, says Australia’s top scientists and clinical researchers make the country one worth paying attention to, as the global pharmaceutical giant chases discoveries for its expanding portfolio.
Dr Baynes, who recently oversaw a list of deals in Australia, said while the company was interested in exciting opportunities wherever they occurred, Australia had many examples of original discoveries.
“Merck has long been committed to discovery research and while many in the industry have moved away from discovery and have gone to the notion of acquiring, we have not done that,” he said.
“We continue to have a strong discovery and research and development portfolio.”
Dr Baynes, who is also chief medical officer of Merck research laboratories, added that the pharma giant did not have a lock on good ideas and was always open to supplement its portfolio with attractive external opportunities.
“As a large multinational biopharmaceutical company we are always eager to strengthen our pipeline, so we really pay attention to discovery efforts going on globally,” he said.
“In a company, we are few and externally they are many, and there are smart people out there.”
Australian-listed Viralytics was one Merck had paid close attention to. It last month swooped on the Australian junior in a $502 million deal to secure its immunotherapy cancer drug, which is based on a common cold virus.
MSD, which is the tradename for Merck outside the US, bid $1.75 cash per share, which was a 160 per cent premium to the one-month volume-weighted average price of Viralytics’s shares.
Viralytics’s flagship treatment is its Cavatak drug, which uses a formulation of a common cold virus that has been shown to preferentially infect and kill cancer cells.
The drug is being tested in combination with Merck’s well-known cancer drug Keytruda, for use in melanoma, prostate, lung and bladder cancers.
Dr Baynes said Merck had been interested in Viralytics’s virus technology for some time.
“We have been closely following the company and have collaborated with them and know a lot about the virus in question and it has properties that are of interest to us.
“I really see it as potentially an important component of immuno-therapeutic treatments,” he said.
There is often debate in Australia about the valuations of deals, given local companies have to list on the market early because of a lack of funding support to progress research.
Dr Baynes said valuation varied depending on how far along the research was, how much data there was to support it and how evolved the manufacturing process was.
“I like to think we value assets fairly depending on the parameters that go into that valuation,” he said.
“It’s different buying an asset that is already approved that has life-cycle opportunities versus something that is very early pre clinical.”
The global clinical development expert said Merck was trying to find great drugs and was relatively agnostic as to whether those drugs were in a specific area.
“Great drugs will build great businesses. The goal is to find important drugs that address serious medical conditions and if developed well can change the human experience. That is the goal, it’s less about focusing on an area, we really want to focus on great drugs and great biology.”
Dr Baynes said the company looked at hundreds of companies each year, adding that he liked to think that Merck had a good idea of what was going on in most companies around the world.
“We have a group whose job it is to understand what others are working on and what the discovery output looks like. If we find a company that presents to us as attractive, we will often put them on a watch list,” he said.
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