herald sun article

19 April 2008
Herald-Sun

LEUKEMIA drug developer Greg Collier recently finished building one of Australia's biggest boardrooms and he admits it is somewhat on the nose.

Instead of the wafting aroma of wood polish, leather upholstery and freshly photocopied documents, it smells of sea water.

Fortunately, he does not expect his fellow ChemGenex directors to occupy it. This boardroom is where the biotech's chief executive stores his family's surfboards.

``I'm addicted to surfing and, with both my sons surfing competitively, we have a lot of boards,'' Dr Collier said.

At last count there were 23 of them, some of which were provided by the sponsors that back Simon and Ben Collier, two of Australia's highest-ranked surfers.

Whenever Dr Collier is at his Barwon Heads home, his first activity every morning is catching a few waves, whatever the weather.

To surf is to learn to stand on your own two feet, without anyone standing by to offer support, to go with the flow without losing your footing on a slippery surface, no matter how choppy the seas are.

In another sense, Dr Collier has mastered these attributes on land as well by managing his listed company's product internally and not having to share licensing spoils with a big pharmaceutical company so far.

He says the Geelong-based company is aiming to file the compound, Omacetaxine, for approval with the US Federal Drug Administration (FDA) early next year.

He says US Federal Drug Administration approval of the Geelong company's compound, omacetaxine, is almost a done deal that will be signed off in months.

The drug will be used to treat a type of cancer, chronic myeloid leukemia, where resistance has built up to the standard medication, Gleevec.

``Gleevec has been like the poster boy for this illness, but it doesn't work in some patients,'' Dr Collier said.

The potential market for omacetaxine has been expanding as the population ages.

It is likely to cost $50,000 a year to treat each patient and Dr Collier believes this could deliver $336 million in earnings in 2012.

Unlike other small biotechs that have to partner for finance and regulatory experience, ChemGenex has remained independent and can maximise shareholder returns when the product hits the shelves.

According to ABN Amro's assessment, the revenue potential for the drug is high because there is no other product to treat this particular kind of leukemia.

``The company is in a very fortunate position that few other health stocks would find themselves in,'' the analyst said.

``It is unusual for a biotech to not seek out a partner, to out-license their compound in order to develop it for the market.''

T HE stock is described by some analysts as exciting with a full pipeline of products.

Dr Collier, too, is admired by analysts as a ``top quality CEO with a good team around him''. One analyst report stated: ``He is driven and focused on progressing his lead compound and the milestones he has achieved so far are a testament to him and his management team.''

Few Australian biotechs have managed to commercialise discoveries, with or without partners, which would make ChemGenex's achievement even more extraordinary when it materialises.

Dr Collier said he wanted to prove that Australians ``do have the skills to develop a commercial drug, even though they don't have much experience at it''.

``That's part of the reason why we don't have a ripe pharmaceutical industry here. We have a great culture of bio discoveries, but product development is immature,'' he said.

He said he wants ChemGenex to ``lead the way'' for other biotechs to also go the next mile.

The company, which is also listed on the NASDAQ, was created with the specific purpose of commercialising a compound that had already overcome some regulatory hurdles. Dr Collier's laboratory research included the areas of metabolism and diabetes before he joined the fledgling ChemGenex a decade ago.

``More than 90 per cent of compounds that go into Phase One clinical trials never make it on to the pharmacy shelves,'' he said.

``What I wanted to do was increase the chances of success by developing a therapy that already had proof of principle.''

He went to the US and over three years he ``trawled'' he reviewed tens of companies that already had drugs in development with Phase One activity.

``Rather than do it organically, by developing our own discovery, which would take a long time, we decided to enter the market at a more advanced level,'' he said.

To further minimise the risk of commercial failure he looked for a compound in a niche area, a drug without too many competitors racing to the development finishing line.

He narrowed the parameters even further by selecting a medical condition for which there was no cure up until then.

O MACETAXINE is derived from a Chinese plant. After the US National Cancer Institute discovered its potential to cure cancer in the 70s, it sat on the shelf ``until someone came along to put it through its clinical paces'' said Dr Collier.

There are a handful of other laboratories also researching a cure for the condition omacetaxine will treat, but ChemGenex is about 18 months closer to commercialisation than any of them.

``It will give us a very strong advantage to be the incumbent, because it is the first therapy to make it to market for a specific illness which is likely to be subsidised by governments,'' Dr Collier said.

His search for a cure is more than just about saving lives. ``What we are trying to prove is that we have a good sense of how to build a successful pharmaceutical company, even if it is not from scratch,'' he said.

He estimates that if the compound ChemGenex bought for $14 million in 1996 had been sold on after successful phase two trials he would have doubled his money.

He has chosen instead to take the product through all its late stages to FDA approval and expects it will fetch well above 10 times what he paid for it.

The company is talking to several large potential suitors.

``We are looking at different types of partnerships.''

``At the moment, we are in a pivotal stage, enrolling candidates for the last trial. "The regulators have granted the compound fast track status so that allows us to start the filing process before the last patient is enrolled and this should begin this year.''

The drug could, potentially, be used to treat patients by mid next year or early 2010.

Dr Collier is the author of 30 patents and previously worked as a scientist at the Baker Institute, Alfred Hospital and Monash University.