From where we stand, as
independent industry focused media, your tirade against big pharmaceutical
companies pursuing their own interests in Monday’s edition (item 10) sounded a little
naive.

To tune you in: while government figures say there are around
1000 biotech companies in Australia, there are around 200 stocks on the ASX that
fit the title. Intersuisse runs Australia’s longest running biotech
index, it has about 80 companies on its index and its biotech analyst, Darren
Grubb keeps a close eye on about 160 stocks. Matthijs Smith from Patterson’s and
Stuart Roberts from Southern Cross are the same, monitoring all and showing
particular interest in the pipeline progress of about 50 or 60
stocks.

With this many companies progressing products through
phase one, two and three trials, often involving two or more trials per phase,
I’m wondering how much of this you think should be simplistically “government
funded”?

To
give you an idea of what these things cost, Biodiem,
an Australian biopharmaceutical company, was doing a $4 million capital raising
to pay for the phase 1b clinical trial of its peptide BDM-E, that may be an
effective treatment for a condition that leads to blindness. (Remember though
that earlier phase trials are much cheaper than later stage trials and this one
alone will involve 192 people.)

Multiply
that very approximate figure of $4 million by the number of trials per product,
the number of products per company and the number of companies out there, and
the potential of the sector and the need for a more complex and mature solution
than government funded trials emerges.

Because
later stage trials are significantly more expensive, it is the aim of most
developing biotech companies to get their products some way along the pipeline
before partnering or selling off to a larger entity that can afford the later
stage trials required to get FDA and/or TGA
approval.
These larger companies are, in most
cases, publicly listed entities and I’m sure you’d not be backward about calling
foul if they were to neglect their duties to their shareholders or if the ASIC
failed to ping them for such behaviour.

Looked
at it realistically, the shareholders (as opposed to taxpayers) are the people who
are funding the research and it seems fair enough for them to expect the
companies they have invested in to be asking the research questions that are
going to help them most effectively to negotiate the many layers of approval and
registration red tape required before they can get their products to
market.

Your article was, however, a refreshing change from a rash
of shockers that have run lately in other media calling for governments to
intervene to make promising drugs available before they have passed through all
of the approval hoops.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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