Biden’s Cancer Moonshot Draws on Aussie Nobel-Winning Expertise
Turnbull’s ‘ideas boom’ seeks science-led boost to the economy
(Bloomberg) -- U.S. Vice President Joe Biden arrived in Melbourne last July with his granddaughters in tow. Bypassing sporting stadiums and race-car tracks, Biden’s first official stop in the world’s sporting capital was to open a A$1 billion ($737 million) cancer center.
As head of America’s cancer “moonshot” initiative, and having lost his son Beau to brain cancer, Biden has spent the last year of his term exploring ways to “end cancer as we know it.” That his quest took him 10,000 miles to the Victorian Comprehensive Cancer Centre is an endorsement of Australia’s medical-science prowess and a new plan to expand its reach.
Joe Biden in Melbourne.
Mining has been the growth engine for Australia’s economy for years. As demand for the nation’s mineral resources declines, Prime Minister Malcolm Turnbull is boosting life-science research funds, offering tax breaks and wooing international talent to exploit the scientific capital that’s enabled the country to claim more than a dozen Nobel laureates.
“We were collecting pieces of intellectual property and just handing it over – ‘here you are’ – to investors,” recalls Amanda Caples of her time working in drug development in Melbourne in the early 2000s. At the time, the life sciences industry was following mining’s path of “digging it up and selling it,” she said.
Shifting Aspirations
Now, as lead scientist in Victoria, the state of which Melbourne is the capital, Caples has seen “a shift in aspirations,” she said. “We’re adding the ‘on-shore processing’” by advancing research beyond the discovery stage.
Doing so requires funds that often eluded inventors. Cervical cancer vaccines, for example, rely on groundbreaking research on the human papilloma virus from doctors in Brisbane, who collaborated with Melbourne-based CSL Ltd. on early studies. The shots were taken through late-stage clinical tests and commercialized abroad by pharmaceutical giants Merck & Co. and GlaxoSmithKline Plc.
Turnbull, a former Goldman Sachs Group Inc. executive, aims to avoid missing such money-making opportunities with the launch this month of A$250 million for a Biomedical Translational Fund. The funds were allocated in December to three venture capital firms: Brandon Capital Partners, OneVentures Management and BioScience Managers.
The investments will help companies take their promising treatment candidates further along the three-stage clinical trial process instead of being forced to license them at early development stages to companies with more money, said Chris Nave, managing director of Melbourne-based Brandon Capital. Nave’s fund received close to half of the government’s allocation -- A$115 million -- which is being matched by its pension fund investors.
‘It’s transformative’
“For the first time, the Australian biotech industry has access to sufficient amounts of capital to support late stage development,” said Nave, a former scientist who switched to helping universities garner funding from external investors. “It’s transformative.”
“There’s a real opportunity that the next Genentech or Amgen will be built in Australia,” Nave said, referring to the U.S. biotechnology giants.
The Peter MacCallum Cancer Centre in Melbourne.
The nation is good at generating science-based intellectual property, for which there are few local competitors at least for now, he said. “We’re not all walking down the same corridors, fighting for deals here," he added.
The same advantage is felt at the headquarters of CSL, Asia-Pacific’s biggest drugmaker by market value, which is located across a park from the cancer center Biden opened in Melbourne’s medical precinct.
“In some respects I’m the big fish here - if somebody has something they come to me," said Paul Perreault, CSL’s chief executive officer, referring to researchers presenting the company with their discoveries. “If I was in the U.S., there are so many competitors, it might be like CS-who?”
Penicillin to Pacemakers
New inventions are becoming more important in a country whose scientific feats include pioneering the medical use of penicillin, spray-on skin, electronic pacemakers, the bionic ear, and the ultrasound scanner. A 25-year economic expansion has faltered in recent years amid the collapse of a once-in-a-century mining boom, prompting Turnbull to turn instead to an “ideas boom” for growth.
An example Deborah Rathjen, managing director of Bionomics Ltd., gives suggests that protecting intellectual property rights attached to those ideas may be a bigger challenge for Australian researchers.
In 1989, she and a colleague applied for a patent for the world-beating discovery of how an inflammation-signalling protein called tumor necrosis factor worked and how it could be countered with an antibody – a finding that later led to the development of arthritis and autoimmune treatments Humira and Remicade, whose combined sales top $20 billion a year.
When drug developers sought to challenge that patent, Rathjen asked Peptech to defend it.
‘Business Savvy’
Senior management initially balked at wrangling with the pharmaceutical gorillas behind the medicines, prompting a boardroom showdown in which Rathjen pledged to fund the lawsuit herself. Peptech finally agreed to pursue the matter and won, eventually earning hundreds of millions of dollars in royalties, she said.
It was an example of almost being defeated by “groups with much more business savvy,” Rathjen said in a phone interview from Adelaide. “We needed someone to champion it, and realized we could make a lot of money out of this – investing in research, patent filings.”
Tenacity has served Rathjen well. Excited by her experience at Peptech, she accepted an offer to run Bionomics in June 2000, about six months after the biotech company debuted on the Australian Stock Exchange following a A$7 million initial public offering. Bionomics now has a market capitalization of A$180 million, a potential bowel-cancer therapy in early stage patient studies, and strategic partnerships with Merck for promising therapies for pain and cognition.
While local health care indexes have outperformed the bourse’s benchmark in the past decade -- buoyed in part by the rise in CSL’s share price -- valuations are still lower than global counterparts.
Arbitraging Assets
George Syrmalis is the founder and chief executive officer of The iQ Group, which invests in early research stage startups in Australia, with the intention to help them trade their shares domestically. Post ASX listing and once the company attains significant research milestones, they cross-list the company on NASDAQ in the U.S. This usually results in a higher valuation of the asset, Syrmalis said. By his estimates, early-stage Australian assets are discounted by about 30 to 50 percent compared to similar investments in the U.S., he said.
That differential may narrow, thanks to advocates of Australian medical research, like Biden.
The cancer center in Melbourne is setting a standard “that is going to be impossible for the great research institutions and cancer institutions of the world to ignore,” Biden said after touring the 13-story facility, whose staff led research providing the world’s largest DNA analysis of ovarian cancer, grew and maintained leukemia stem cells in a laboratory dish for the first time, and led key studies on Pfizer Inc.’s precision lung-cancer medicine Xalkori.
“It’s not just a magnificent structure,” he said at the opening of the center, a futuristic glass-and-steel building that’s located within a five-minute walk of Melbourne’s internationally renowned brain, immunology and infectious disease hubs. “This is symbolic of the hope, in my view – the aspiration, the possibilities – that you’re offering to so many of your countrymen, and so many people around the world.”
To contact the reporter on this story:
Natasha Khan in Hong Kong at nkhan51@bloomberg.net
To contact the editors responsible for this story:
Anjali Cordeiro at acordeiro2@bloomberg.net