The $500 million Biomedical Translation Fund has made its biggest investment yet, tipping $22 million into Certa Therapeutics to enable the Melbourne-based start-up to carry out clinical trials of potential lifesaving kidney disease treatments in Australia.
Certa, based at founder Darren Kelly’s University of Melbourne laboratories, aims to advance the use of DNA testing to identify and preemptively treat those kidney disease sufferers who will develop fibrosis or scar tissue – typically a precursor to end-stage kidney failure.
Preventing the development of fibrosis in more kidney patients through the use of “precision medicine’ averts the need for more costly treatments. Chronic kidney disease is becoming more prevalent as the population ages, and costs about $1 billion to treat each year in Australia alone.
Certa says the market for its treatments – which include compounds that can prevent the development of fibrosis as well as DNA testing breakthroughs – could be worth $5 billion.
“If all goes to plan we could have a drug on the market within five years,” Professor Kelly told The Australian Financial Review.
The deal’s real significance is that Certa is buying back some of the farm in kidney treatments. Professor Kelly had to sell his previous start-up, Fibrotech, to Dublin-based pharmaceuticals group Shire in 2014 for up to $500 million up front and milestone payments.
In those days the Biomedical Translation Fund (BTF) didn’t exist and local funding for Phase II trials was hard to come by. Local biotech start-ups were frequently sold off to global pharmaceutical groups around this stage of their development.
Now the Biomedical Translation Fund (BTF) is helping to fill that gap. Phase II trials typically test a new treatment on a few hundred people for efficacy and safety. Phase I trials test a smaller group and Phase III tests a larger group against existing drugs to ensure the new one is an improvement before it is licensed.
Certa’s Phase II trials will be directed and mostly carried out in Australia – and Certa is buying back from Shire some of the kidney drugs sold in 2014 in exchange for an 18 per cent stake.
“The BTF is a really important government initiative that obviously helps us to keep later stage trials in Australia,” Professor Kelly told the Financial Review, adding that this will obviously benefit the Australian economy and create jobs.
Uniseed, a highly successful funder of pharmaceutical start-ups backed by the universities of Melbourne, Queensland, NSW and Sydney, and CSIRO, is tipping in $3 million and some related assets to lift the cash raising to $25 million.
The money will cover two clinical trials in kidney disease and a trial on another of the organs susceptible to fibrosis – which include the lungs, liver and eyes, Professor Kelly said.
When you damage an organ – say by smoking or drinking to excess – the body tries to protect itself from further abuse by causing fibrosis or scar tissue.
“If you keep doing that injury you are basically hammering it on the head,” Professor Kelly said. Eventually the damage will be irreversible and the organ will fail unless the deterioration can be arrested.
About 1.7 million Australians suffer from kidney disease but only some of them will go on to develop fibrosis. Being able to identify these patients more accurately speeds up the clinical trials and makes them more efficient.
BTF’s raison d’etre
The $22 million BTF contribution is coming from Brandon Capital’s Medical Research Commercialisation Fund, which manages the largest chunk of BTF money.
“In many ways this investment represents the raison d’etre of the BTF, taking great Australian medical science and providing it with access to sufficient capital to enable its continued, late stage, clinical development in Australia,” Brandon Capital’s managing director Christopher Nave said.
“The BTF was designed to be transformative for our local industry, providing the ability for research discoveries to be developed from concept to commercialisation right here in Australia, creating jobs and growing a sustainable industry along the way.”
Fibrotech was one of several promising Aussie biotech start-ups sold off just as they were getting going before the BTF was launched. In 2015 drug giant Novartis swooped on Spinifex, a Brisbane-based pain relief company, in a $US700 million deal and Melbourne-based Hatchtech struck a deal worth up to $279 million with an Indian firm to commercialise a head-lice treatment.