PERTH, Australia – Australia’s biopharma sector fared better than the country at large at the end of the financial year that ended June 30, as the country saw GDP fall 7% in the final quarter, the largest drop since 1959.
Australia’s trading relationship with China helped the country sidestep the global financial recession of 2008, but the recent divide between the U.S. and China is also putting a wedge between Australia and China relations as China cut trade with Australia across numerous sectors.
Aussie biopharmas scrambled to raise capital to stay afloat during the latter half of the fiscal year, which saw trials stalled during the COVID-19 pandemic and put the pressure on companies like CSL Ltd., which relies on plasma donations. Some companies fared better than others, with many jumping into developing therapeutics to treat COVID-19 and taking advantage of government grants and fast-track pathways to develop the new treatments.
Melbourne-based Mesoblast Ltd. was one of the biggest gainers in the biotech space, with its shares soaring following an FDA advisory committee meeting that recommended approval of its mesenchymal stromal cell (MSC) therapy Ryoncil (remestemcel-L) in children with steroid-refractory acute graft-vs.-host disease (aGVHD)
The company embarked on a $90 million (US$65.7 million) capital raise to prepare for a U.S. launch of its lead candidate. It had $129.3 million in cash on hand as of June 30.
“We are very pleased to report the significant corporate progress made by the company over the last financial year. The most notable achievement was the successful FDA advisory committee meeting [Aug. 13], which resulted in an overwhelmingly positive vote in favor of the efficacy of our lead product,” said Mesoblast CEO Silviu Itescu.
“We are working closely with the FDA ahead of next month’s approval action date and are well prepared for a potential U.S. launch,” he said.
In parallel, remestemcel-L is being tested to address the most significant inflammatory complications in children and adults infected with COVID-19, and a phase III trial is enrolling adults in the U.S with acute respiratory distress syndrome (ARDS). The company also received clearance in Australia to treat patients with ARDS.
Mesoblast reported a 92% increase in revenue of $32.2 million for the full fiscal year compared to $16.7 million in fiscal year 2019.
The company enjoyed a 127% increase in milestone revenue from strategic partnerships that amounted to $25 million.
Even so, Mesoblast ended the year with a loss of $77.9 million compared to a loss of $89.8 million the previous year.
Mesoblast stock on the Australian Securities Exchange (ASX:MSB) was trading at AU$5.15 per share at close of trading Sept. 2.
CSL faces challenges in plasma collection
Melbourne-headquartered CSL announced a 10% increase in net profit to AU$2.10 billion.
The company’s immunoglobulin franchise performed well, with Privigen sales growing 20% and Hizentra sales up 34%, said CEO Paul Perreault during the company’s year-end earnings call.
Albumin sales remained strong except for China, where CSL transitioned to a new direct distribution model that saw albumin sales decrease 36%, Perreault said, adding that the China transition is now complete and “will improve CSL’s participation in the value chain as well as allowing us to now work directly with clinicians.”
The company’s flu vaccine franchise, Seqirus, saw sales grow 70%. CSL also bolstered its balance sheet with a AU$750 million capital raise during the last half.
Although CSL’s fiscal year 2020 results were solid and in line with expectations, CSL faced challenges in plasma collections due to the evolving COVID-19 pandemic.
“The COVID-19 pandemic has presented challenges for our employees, our supply chains and the collection of plasma, an essential raw material used in the production of many of our therapies,” Perreault said.
“Demand for our therapies remains strong, especially for immunoglobulins and influenza vaccines. Governments around the world recognize the capabilities CSL provides to the communities it serves are essential. As a result, our plasma centers and manufacturing facilities remain open and operational to maintain the supply of these medicines.”
“CSL is arguably the best operator across the ASX and should be in everyone’s portfolio … just not right now,” said Morgans analyst Derek Jellinek.
Even so, demand for plasma, recombinant products and vaccines is likely to remain solid, the analyst said, noting that July and August plasma collections are trending up, “albeit not as much as expected.”
Meanwhile, CSL and the University of Queensland (UQ) have accelerated development of a COVID-19 vaccine candidate developed by the UQ under which CSL will manage clinical trials and the large-scale manufacture of the recombinant vaccine.
Subsidiary CSL Behring began developing an anti-SARS-Cov-2 plasma product to treat people with serious complications of COVID-19 in Australia. A small batch of COVID-19 immunoglobulin will first be produced to develop tests that detect the presence of the antibodies that fight the SARS-CoV-2 virus. The second phase will involve a larger batch of COVID-19 Immunoglobulin that will be used in clinical trials in Australia.
Jellinek praised CSL for its numerous COVID-19 initiatives and the fact that it had no supply chain interruptions. The Morgans analyst said that although the biopharma sector performance was “a bit of a mixed bag, CSL shot the lights out.”
In the last six months, CSL was down 8% compared to the rest of the market, which was down about 15%. He said CSL underperformed by 11%.
“Reporting season is a messy time,” Jellinek said. “Numbers are all over the place, and it’s very hard to see what’s going to happen.”
CSL shares on the Australian Securities Exchange (ASX:CSL) were trading at AU$287.20 at the end of trading on Sept. 2.
Starpharma soars on COVID-19 breakthroughs
Starpharma Holdings Ltd. reported two major breakthroughs with COVID-19 treatments that saw its shares soar about 40%.
The company announced Sept. 1 that it has applied its DEP dendrimer drug delivery technology to create a long-acting, water-soluble version of Gilead Sciences Inc.’s antiviral, remdesivir, which has emergency use authorization from the U.S. FDA to treat patients with severe COVID-19.
The company said that because its formulation is water soluble, it could allow for less frequent dosing than remdesivir and could be used in non-hospital settings such as aged care facilities.
“Given the limited treatment options available for COVID-19 patients, Starpharma has been actively reviewing development programs globally and evaluating where Starpharma’s proprietary DEP technology has potential to improve delivery, expand use or reduce frequency of dosing,” said Starpharma CEO Jackie Fairley.
Starpharma’s underlying technology is built around dendrimers – a type of synthetic nanoscale polymer that is highly regular in size and structure and well suited to pharmaceutical and medical uses.
Starpharma has also developed an antiviral nasal spray for protection against COVID-19 based on the company’s antiviral dendrimer, SPL-7013, which inactivates viruses by blocking the interaction between viral surface proteins and the human cell receptor proteins.
SPL-7013 is an active component in Starpharma’s existing Vivagel portfolio and is approved for use in products such as a condom lubricant and in a gel used for the treatment and prevention of bacterial vaginosis. The compound has broad-spectrum antiviral and virucidal effects, with activity demonstrated against a range of viruses, including HIV, herpes simplex virus, human papillomavirus, adenovirus, H1N1 influenza virus, hepatitis B virus and Zika virus.
Based on discussions with regulators, Starpharma expects to be able to expedite approval of a SPL-7013 nasal spray by leveraging existing nonclinical and clinical data of Starpharma’s currently approved products.
For fiscal year 2020, Starpharma reported AU$6.5 million in revenue compared to AU$2.7 million for the previous year. The increase in revenue reflects a AU$4.3 million development milestone with partner Astrazeneca plc for the first dose of AZD-04066 administered in the phase I trial of its first DEP product.
Starpharma has a partnership with Astrazeneca for the use of its DEP drug delivery platform for developing and commercializing a number of Astrazeneca oncology compounds. Because the dendrimer is larger than the small-molecule drug, by attaching to the dendrimer, the drug accumulates in the tumor for a more targeted effect, Fairley said. "All of the drugs we've looked at, including Astrazeneca's drugs, are more efficacious with less toxicity when you put them on a dendrimer."
The company reported an overall loss of AU$14.67 million, compared to AU$14.25 the previous year. The loss was largely due to the expansion of its clinical programs.
“While COVID-19 has impacted companies around the world, Starpharma was able to achieve a number of important milestones during the year, including significant progress with our internal clinical-stage DEP assets with three products now in phase II; advancing multiple new development programs, including antivirals and radiotherapy, in addition to several product launches of Vivagel BV in the U.K., Europe and Asia,” said Fairley.
Starpharma’s stock on the Australian Securities exchange (ASX:SPL) was trading at AU$1.63 per share, slightly down from the previous close.