Posted 17 Apr 2009 5:57 PMWhere did the golden age go?I was...

Posted 17 Apr 2009 5:57 PM
Where did the golden age go?

I was flicking through some back stories last week, looking at the sector as it was in late 2007, as an antidote to the almost unmitigated gloom in the current market, and it was an interesting exercise.

While the first signs of the coming capital market apocalypse were there, analysts were still moderately bullish about the life science sector as a whole, and our late stage companies in particular.

Central to this was the claim, often repeated in the sector, that there were (are) a growing number of drug development companies hitting the later stages of clinical development, signalling the growing maturity of the sector and perhaps heralding the new golden age for life science companies.

So, how many of those are left, and where are they?

The Intersuisse 2007 sector review listed 11 companies in Phase 3 development (Progen, Chemgenex, Giaconda, Clinuvel, Pharmaxis, Psivida, Neuren, Novogen, Avexa, QrxPharma and Halcygen), with another five either awaiting product approval, or with drugs actually on the market (CSL, Biota, Alchemia, Acrux and Agenix).

Even factoring in the market downturn, it’s somewhat sobering to look at those lists 18 months later.

On the latter list, CSL is still the only unqualified success story. While its proposed acquisition of US plasma company Talecris is moving only slowly, and Gardasil sales have slowed across the world, CSL has had no major disasters and is still delivering very strong earnings results.

Biota, Alchemia, and Acrux have all had their issues, but are coping well. Biota’s legal action against GlaxoSmithKline was a costly waste of time; Alchemia has slowed work on its other pipeline projects but its generic fondaparinux is heading steadily for market, and Acrux appears to be afflicted with serial bad luck in its choice of marketing partners.

But Agenix’s attempts to get hepatitis B drug YouHeDing onto the Chinese market have been an unmitigated disaster. Its attempts to buy two Chinese companies to manufacture and market the drug failed due to legal complications – while a settlement was announced today, Agenix has lost the Chinese rights to YouHeDing, and takes away only $9 million as a settlement for the entire debacle.

Four of the 11 companies from the late-stage list have had serious problems since the end of 2007.

Progen’s troubles have been well documented, and liver cancer drug PI-88 is now heading for regional, rather than global registration trials.

Giaconda has been out of cash for the better part of a year and, sustained only by the depth of its directors’ own pockets, its clinical program appears to have completely stalled.

Neuren’s Phase 3 neuroprotective drug Glypromate crashed out of clinical trials in January, and Novogen pulled its Phase 3 trial of ovarian cancer drug phenoxodiol this week, citing costs and slow recruitment.

While four from seven programs collapsing isn’t a bad percentage by world standards, it’s not quite the mooted golden age of Australian drug development.

On the positive side – and there is one – seven of the 11 companies in late stage clinical development are still broadly on track (with the occasional caveat – Avexa’s current cash woes, for example). They are ChemGenex, Pharmaxis, Clinuvel, pSivida, Avexa, QrxPharma and Halcygen.

So there’s plenty of upside left in the Australian biotech sector, but it’s also worth remembering that it will still carry risks, even after the capital markets free up some cash for development.

http://www.businessspectator.com.au/bs.nsf/Article/Where-did-the-golden-age-go-pd20090417-R7B8F?OpenDocument