With the flu vaccine, we’re looking to issue more licences within this financial year. With the vector program, which is like the offshoot of the flu program, I think that one is a really good technology that we want to keep in house for as long as it makes sense.
We’re talking to three different groups at the moment about co-development, and one of them is Vivalis, and they’ve got a companion technology, so we’re talking to people who have either expertise in vector development that can do it faster than us, or people who’ve got companion technology, because it’s both in our interest to get it cranked up and out there, and the idea is to issue licences to the use of the platform.
That’s really the sweet spot because when you sell licences you can sell research licences, so they’re a bit cheaper. So whether people get a product out of it or not doesn’t matter, because we still get the licence fees while the research is ongoing, and if they get a commercial product you can get a commercial licence with milestone fees and things like that.
The idea is to get as many licences out as possible. The reason I want to keep that in house a little longer is that the opportunity is really huge, because you’re looking at exponential revenue and growth, particularly as more people get familiar with it. That helps provide its own validation of the technology, so people will be more comfortable about taking licences because it’ll reduce their risk.
Beyond those projects – and this is part of the consolidation approach – we’ve in-licenced some other technologies and the idea is then to spread the risk. As a small company, you live or die based on delays or things that happen with other people outside of your control.
So what we’ve done is we’ve beefed up, very opportunistically and very deliberately, some vaccine assets which are complementary, and we’ve also picked up in particular the Hepatitis D project which we announced in June; a very nice hepatitis vaccine technology which itself can be a platform.
So even though the vector program that we’ve got has a lot of potential, it has some limitations. So to have a range of options just expands your ability to attract licensees. But it also means that you’re using common resources within your company, because the expertise you need for these things is very sophisticated. If you’ve got a couple of people who know what they’re doing with vaccines they might as well be working across a few projects. That helps reduce the risk and makes your overhead work a bit harder.
We’ve just put in, in July, an NIH grant application for just over $3 million. We’ll find out about that probably next year, but we’re hoping to get some feedback towards the end of this year about scientific questions on that. That’s a collaboration with the University of Canberra, using researchers that we know and are familiar with through previous lives, so it’s always good to have researchers that are known to you and internationally recognised, high profile people specialising in our areas.
For a company like us, which doesn’t generate enough revenue at the moment to cover its expenses, it’s absolutely critical because our spend is entirely related to the amount of capital we have available.
We’ve reduced our spend over the last two years and been able to produce more because of access to government programs. The Australian Government, unfortunately, reduced its support for biotechnology companies in 2009 when the commercial ready grant system was pulled. That, on top of the global financial crisis, brought a lot of companies to their knees. That was when I was working with small companies and there were two that we pretty much wound up, and they have great technology, because of the inability to attract capital.
It turns out we’ve been able to bring one into this company. The benefit of that is that it’s complementary to what we’ve got, and it’s actually through the work with them that we’ve got viral vector, so we were going to look at the adenovirus and it was so expensive. So it was like, “We’ll have to do it because it’s the best one, and it’ll have the shortest development time”. So then, as life takes you on different paths, I ended up here and I thought, “Oh, we can use this one – and own it and develop it ourselves” and also licence it out.
It’s a really very interesting position to be in, because we can develop our own vaccines if we want to. When you’re licensing things out people like to see you’ve got your own plans in place as well, because they pick up more confidence if you’re looking into proceeding into development yourself.
There’s a lot we can’t do in Australia. That said; the Victorian Government has been fabulous. They are as generous as I think they can be, actively engaging with biotechnology companies to see how they can help.
To be honest, the fact that they show interest means a lot to a small company like us because they are looking for ways to put you in contact with other people. Even if it’s not giving you cash, they’ll set up meetings with multinationals. But they actually care what the Victorian companies are going through.
I live in Sydney, and worked in Sydney, and was horrified that the NSW Government is just not taking any interest at all in biotech companies. It’s a huge potential for sophisticated technologies including biotech in Australia, and so Australian biotech is engaging with the Department of Innovation to assist with policy direction and showing how investment could be targeted to accelerate growth.
A lot of this work is not expensive to do. Some is, and some of it, you just don’t have the capacity for in Australia. There are certain toxicology experiments where there are about two or three places in the world that specialise in them. Australia’s just not in the race. It doesn’t have the volume of testing needed to go through to support a contract research group. There’s a lot of development work that could be done in Australia, and employ the brains and scientists here.
It’s quite wicked that we really can’t do that, and that’s more capital intensive investment, but that’s probably a bit hard to buy off into at the moment, so we’re just outsourcing most of the things that we’re doing to overseas. So we’re not even able to access the tax credit when it comes time.
I would always try to spend the money in Australia if we could. We’ve got a couple of research programs going here, but it’s a combination of the lack of capabilities locally. Some of the research groups are excellent. We’ve got the Queensland Institute of Medical Research doing some work for us with Professor Don McManus, so we want to do some work up there with him. We’ve got RMIT down here we’re doing some work with; Professor Peter Smooker, he’s familiar with the flu virus. And we’d like to do more work in Australia but it’s just a bit hard to crack through the infrastructure, it’s just easier to talk to other commercial groups.
Cara Waters is a former SmartCompany editor. Previously, Cara was a senior reporter for the Financial Times’ website and worked for The Sunday Times in London.
