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Andrew Patterson meets a kiwi bio-tech company which has raised $74 million developing a therapeutic drug here for international markets

Posted in Business
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By Andrew Patterson

The bio-tech sector has had its ups and downs in this country over the years but one innovative start up is pinning its hopes on a revolutionary wound healing drug that has the potential to be a significant game changer in the future.

Auckland based CoDa Therapeutics [the name derives from the first two letters of its two founder’s first names] is a clinical stage biotech focused on developing innovative therapies that address major unmet medical needs in inflammation, wound-healing and tissue repair.

The company has focused its efforts on bringing relief to sufferers of a condition known as venous leg ulcers.

These are wounds that are thought to occur due to the improper functioning of venous valves, usually in the legs. They are the major cause of chronic wounds and the associated ulcers develop mostly along the medial distal leg which can be very painful for sufferers afflicted with the condition

The origin of venous ulcers is not certain, but they are thought to arise when venous valves that exist to prevent backflow of blood do not function properly, causing the pressure in veins to increase, resulting in severe pain for the patient.

Early success

Earlier this month CoDa Therapeutics announced it had achieved positive results from a Phase 2b clinical trial of its developmental drug NEXAGON® in patients with chronic venous leg ulcers.

The treatment is designed to increase the incidence of wound healing compared to existing therapeutic techniques, and to heal them much faster.

Tracey Sunderland, CoDa’s Chief Operating Officer says the company has evolved as a collaboration involving a range of different people.

“The technology originated from research that the founder’s Colin Green had been undertaking at the University of Auckland along with Dave Becker, who is based at University College, London. Both scientists had been working on a treatment for the condition for several years. They met up with our CEO, Brad Duft, who is based in San Diego, and the decision was made to attempt to commercialise the technology.”

The medical condition

Surprisingly, there are references to venous leg ulcers that date back to 1500BC so this is a condition that has been causing sufferer’s intense pain for literally thousands of years.

“Over the years there have been numerous attempts to find a suitable treatment for this condition but we believe we’ve found something that’s unlike previous approaches and so far we’ve had very successful pre-clinical and clinical results.

“We think we’ve got something that has the potential to be a real game changer in this space particularly due to the fact that there are no therapeutic compounds on the market currently.”

“The number of people who suffer from this condition in the U.S. alone is around 1-2% of the population, so if you think about that, it equates to more than the entire population of New Zealand."

“While we’re not actually treating the underlying cause of venous leg ulcers we are able to bring substantial relief to sufferers and speed up the healing process.”

Research process

Getting any new drug or treatment to market is a long, slow and inevitably very costly process.

“Firstly, you’ve got to raise significant amounts of funding which is the really difficult part.

“We were lucky to successfully conclude a Series A funding round by gaining [a cohort of] investors both here and in the U.S. and that raised around US$23 million which provided funding for around six years to undertake some pre-clinical development along with our phase 1 and phase 2 trials."

“Then subsequent to that we’ve been able to complete another phase 2 trial with series B funding of around US$38 million and we’ve still got phase 3 to go. That’s likely to involve around US$60 million to complete.”

Add those three funding rounds together and you’re talking about US$125 million all up to get this drug to market which only reinforces the costs involved in developing new drug treatments.

“We hope to get this drug on to the market by 2016 so it will end up being a 10 year process which is actually quite quick by industry standards.”

However, only a certain type of investor will be attracted to the high degree of risk associated with these types of ventures.

“Our investors are used to this type of risk and many of them only invest in the bio pharmaceutical sector so they’re seasoned investors in this space. Several of them are on our board as well which brings a range of experience and expertise to the table.”

With no therapeutic treatments currently available on the market for venous leg ulcers, the prospect of a significant pay-out down the track is, of course, the reason why these investors are prepared to take on the risk they do.

Decision to remain in NZ

The decision to remain in New Zealand is primarily due to CEO Brad Duft, who has become a strong advocate for growing the bio tech sector in this country.

“We currently have 16 employees on our payroll with 11 of those based in NZ. We do all the pre-clinical, clinical and non-clinical research in NZ as well as managing a range of external research projects offshore in places as diverse as South Africa, Russia and the Ukraine as well as the U.S. and Canada."

“A lot of bio-techs are forced offshore because they can’t get funding. We’ve proven that our model can work and the best thing about it is that we’re bringing foreign investment into the country and in turn spending millions of dollars here on research as well as building the bio-tech sector itself.”

“The other advantage is that we’re keeping high value jobs here and developing some fantastic capability within our staff.”

There is often a perception that our best and brightest science graduates have all left or are in the process of doing so, which is not CoDa Therapeutics experience.

“We’ve had no difficulty at all attracting staff. There are some exceptionally dedicated, innovative and skilled scientists in NZ and we were fortunate to find four really good ones from the large number who applied. We’re up skilling them as well including sending them to London to our research lab there and that’s part of the investment we make to try and keep them here."

“I believe we should be really proud of our science community in NZ and I’m particularly proud of what our whole team have achieved to this point."

However, the decision to remain in NZ though can have its downsides.

“Communication is a big issue for us simply because we’re working in multiple time zones so we’re on the phone a lot, often at 2 or 3am in the morning!"

“On the whole though, I don’t really see a lot of disadvantages. In fact, I think they are greatly outweighed by the advantages. I think it’s much more economical to be based here and I’ve actually concluded that you don’t need to go to the U.S. to take a product like ours to market.”

Future potential

Growing the bio-tech sector continues to one of the great hopes for NZ’s future success as a science and technology hub.

“We’ve got such a great opportunity to really build the bio-tech sector here and I know people have been working on that goal for some years. Apart from all the capabilities I’ve already mentioned, we also have a very diverse population so that’s a real attraction for people wanting to do clinical trials."

“Following on from the success of our phase two clinical trials earlier this month, our next step will be to undertake a Series C funding round so we can begin work on our final developmental phase. We’re targeting 2016 to have the product on the market.”

So what’s the attraction to work for a bio tech such as CoDa Therapeutics?

“Personally, I just love the challenge. I say it’s not a 9-5 job, it’s really a lifestyle."

“There’s always so much going on in a small company such as ours you end up being a part of everything so it’s both interesting and challenging work at the same time."

“Ultimately you know that you are trying to get a product to market that is going to save millions of people from the pain and suffering associated with this horrible condition and that’s obviously very satisfying.”

 

KEY FACTS

Sector: Bio-tech
Founded: 2006
Staff: 16 (5 in the USA)
Turnover: Nil (product still in development)
Capital investment to date: NZ$ 74 million
Biggest potential market: USA
Profitable: Not yet
Recent highlights: Successful phase 2 clinical trial and completion of two funding rounds.
Ownership: Private

 

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