In late 2003, a group of industry veterans in Australia gathered to revise the biotech business model - then hamstrung by sluggish capital markets - and ended up forming a clinical development company aimed at re-purposing compounds for large markets and, potentially, pandemic opportunities.

That company, Implicit Bioscience, has come a long way since, raising about $18 million in private financing and acquiring a lead candidate, the immunomodulator oglufanide disodium, already backed by substantial safety data.

More recently, the firm landed a $16.3 million government contract to develop the product as a broad-spectrum therapeutic against potential biothreats. Implicit last week kicked off work on the 37-month Defense Threat Reduction Agency (DTRA) contract, starting "a range of preclinical and clinical activities" that involve testing oglufanide disodium, in animal models of infection and conducting gene-array profiling, as well as work in several bacterial disease areas, said CEO Garry Redlich.

The compound is designed to boost the host's immune response against specific diseases. It's a mechanism, Redlich said, that likely was poorly understood when the drug was being developed several years ago in cancer by Kirkland, Wash.-based Cytran Inc. The now-defunct Cytran had tried the drug unsuccessfully in several indications, including AIDS-related Kaposi's sarcoma in a 2001 Phase III trial.

"After Cytran's demise, the compound was parked in a shelf company," Redlich told BioWorld Today, and the shelf company was acquired by Implict in 2005.

Implicit began by looking at some early trial data that indicated the drug's potential use in respiratory diseases, which led scientists to wonder if it might work in pandemic flu, Redlich said. It did, but results were not robust enough for the drug to compete against existing neuraminidase inhibitors, such as Tamiflu (oseltamivir phosphate).

Then, Implicit discovered that the drug showed activity against Burkholderia pseudomallei, a bacterial agent that causes melioidosis, a potentially fatal infectious disease. Though it's primarily found in Southeast Asia, B. pseudomallei gained attention as a potential biothreat due to the ease with which it can be weaponized and its high mortality rate.

Oglufanide has the potential to treat infection from that specific bacterial agent, as well as a range of other, similar intracellular bacterial diseases. So, instead of a "one bug-one drug" approach, Implicit's compound could be protective against a range of bugs, Redlich said, putting it in "the sweet spot for biodefense," a market Implicit began to fully appreciate after attending the 2006 BIO conference in Chicago.

The company began to look really hard at the "billions of dollars sitting there" for pandemic and biodefense opportunities, Redlich said, and put together a proposal for DTRA, which awarded a contract earlier this year.

"Implicit's also is only the second contract, other than a [GlaxoSmithKline plc] contract, to be constructed in a much more friendly way," compared to most U.S. biodefense agreements, Redlich added. The company managed to negotiate a deal that exempted it from federal acquisition guidelines, resulting in less onerous restrictions.

At the end of the contract period, Implicit hopes to have moved oglufanide through the appropriate animal disease models under the two-animal rule for product registration.

Though its biodefense work holds near-term promise, it is an ancillary business, as Implicit continues to move oglufanide into several therapeutic indications. The company has two Australian clinical studies ongoing in hepatitis C virus, and anticipates investigating tuberculosis, as well as malaria. Beyond that, the company is negotiating for other low-risk compounds, aiming to remain a development-only model, Redlich said.

With 15 full-time employees, Implicit is headquartered in Brisbane, Australia, though it opened a Seattle office in May to handle the DTRA contract work.