In one of the most significant collaborations in Australian biotech history, G2 Therapies Ltd. signed last week a potential $102 million deal with European health care company Novo Nordisk to develop antibodies for treating inflammatory diseases.
Only a handful of other Australian firms have entered partnerships of that magnitude. Among those include Melbourne-based Biota Holdings Ltd., which late last year licensed rights to its small-molecule compounds for respiratory syncytial virus infection to MedImmune Inc., of Gaithersburg, Md., for a potential $112 million in up-front and milestone payments. And, in June 2003, Victoria-based Zenyth Therapeutics Ltd., formerly Amrad Corp. Ltd., signed a deal worth up to $112 million with Merck Sharp & Dohme, the Australian subsidiary of Whitehouse Station, N.J.-based Merck & Co. Inc., to develop drugs to treat respiratory disease and cancer. (See BioWorld Today, Dec. 16, 2005.)
"We’re very pleased to announce this deal," said Stephen Conlon, CEO of G2, which was founded in 2002 as a spinout of the Garvan Institute of Medical Research in Sydney, and operates under two subsidiaries: G2 Inflammation Pty. Ltd. and G2 Cancer Pty. Ltd.
The company’s work is based on technology licensed from Garvan, and "we have some specific skills in raising antibodies to targets that others have found too difficult," Conlon added. "That, coupled with a ready source of targets, gives us quite an interesting pipeline, and we think the deal with Novo is a validation of that strategy."
The collaboration calls for the companies to develop, manufacture and commercialize anti-inflammatory antibody therapies based on G2’s C5a receptor program. The receptor has been shown to bind the inflammatory mediator C5a, and G2 has had early success in developing murine antibodies that block C5a activity.
"Most of our work to date has been in animal models in rheumatoid arthritis," Conlon told BioWorld Today, adding that the partnership will look at "a broad range of inflammatory conditions," including lupus, multiple sclerosis and psoriasis.
He estimated that G2’s compounds are about 18 months to two years from the clinic, though that timeline could change depending on how quickly work progresses now that Novo has come on board.
Bagsvaerd, Denmark-based Novo agreed to pay G2 an up-front fee of $6 million, in addition to a series of success-based milestones that could bring the total to $102 million. Beyond that, G2 will be entitled to royalties.
"Novo also is reimbursing our expenses under this collaboration," Conlon said, and though the bulk of the work will be conducted by Novo, G2 will remain "significantly involved in the program."
The partnership also frees up resources at privately held G2 to start advancing some of its other antibody programs based on intellectual property from Garvan, focusing on therapeutics for inflammation, as well as cancer. The company also might consider licensing "suitable targets from other institutes" to help build its pipeline, Conlon said.
While the Novo deal clearly offers a boost to G2’s profile, it also brings additional global recognition to Australia’s biotech sector, which includes Australian Stock Exchange market cap leaders CSL Ltd., Novogen Ltd., and Metabolic Pharmaceuticals Ltd. There also are a growing number of early stage companies, many of which, like G2, were spun out of local research institutes.
"In terms of environment, it’s a great place to do research," Conlon said. "It’s substantially less expensive for evaluation work, compared to the U.S., and we have several large research institutes with quality IP, like Garvan."
According to figures compiled by Australia’s Department of Industry, Tourism and Resources, there were about 400 biotech firms in the country at the end of 2004, with nearly half of those - about 46 percent - focused on developing human therapeutics.
Like companies in the rest of the world, Australia’s biotech industry struggled early this century, before rebounding in 2004, partly through an increase in global partnerships.
For the fiscal year beginning July 2004 and ending June 2005, biotech companies in Australia signed a total of 94 collaborations, nearly twice as many as the 53 signed in FY2003-2004. The biggest increase was in biotech-pharma partnerships, which increased from four to 18.
Of those 94 collaborations, 40 percent were with U.S. firms, 23 percent were with other Australian companies, 13 percent were with Asian companies and just under 10 percent were signed with European firms.