Human trials are a critical step in proving that a new medicine works as promised.
Human trials are a critical step in proving that a new medicine works as promised. But, if it was really that simple then Rod Unsworth, the Perth pharmacist who chairs BioDiem Ltd, would be on top of the world and the share price of the company would not be in the cellar.
But, getting the world to take notice of BioDiem has been a tough job for Mr Unsworth, arguably WA’s most successful biotech company developer.
Between 1970 and 1998 he was the driving force behind Delta West, a manufacturer of oncology (anti-cancer) drugs – first as an independent company, and later as a subsidiary of Pharmacia & Upjohn.
More recently he has worked as group vice-president for the Asia Pacific region with another big US-based pharmaceutical company, Schering Plough. He took on the chairman’s job at Melbourne-based BioDiem because he believed it had a unique range of products, including rights to a Russian-developed flu vaccine.
“It really is one of the most promising flu drugs in the world today,” Mr Unsworth told WA Business News earlier this year.
“Its successful use in Russia is an excellent demonstration of how it works.”
Mr Unsworth is right. BioDiem can point to the remarkable Russian flu vaccine which may one day play a leading role in the fight against avian (bird) flu and say with complete confidence “it works”.
But, even if 70 million doses of the Russian vaccine have been dispensed and Russians can claim a lower flu infection rate than many Western countries there is a problem – the vaccine has not passed through the rigorous testing procedures which apply in Europe, the US and Australia.
One of the few true believers in BioDiem’s live attenuated influenza vaccine (LAIV) is Hugh Morgan, a man better known as the former chief executive of WMC Resources, a big mining company.
Since retiring from WMC, Mr Morgan has ploughed around $5 million of his personal fortune to snatch a 14 per cent stake in BioDiem, a position which begs the question: does an old mining man know something that conventional biotech investors do not?
“He may do. But, he may just be foolish,” is Mr Morgan’s humorous put down of his investment in BioDiem.
“Some of BioDiem’s potential products are not in the research category. These are things that are well on the way … with the influenza vaccine, the risk is zilch.
“I mean, it’s already been used by 70 million Russians. I know you have to go through certain procedures to get Western approval, but 70 million Russians is a pretty good start for a trial.”
Unsworth and the chief executive of BioDiem, Tom Williams, could not agree more – though the wider stock market is struggling to understand the company, and its products, not to mention overcome an aversion in the current investment climate to any small biotech stock.
“It’s been a pretty tough market over the past year,” said Mr Williams, a former senior executive with the big pharmaceutical company, Glaxo SmithKline.
“But, I think as investors take a closer look at what we’re doing they will see that we really are at the cutting edge of developing flu vaccines and other drugs.”
A measure of how little the wider market knows about BioDiem (or how little is its current interest in all biotech stocks) can be seen its plunge from a float price of $1.25 early last year to just 34c in late March. This price fall gives the stock the dubious distinction of being one of the worst new floats of the past two years.
It is a foolish person who says the market has got it wrong, though obviously Mr Morgan believes this to be the case because he has been a steady buyer as BioDiem has fallen.
A more reasonable explanation is that few potential investors have taken a look at the management team behind BioDiem, or the nature of its products and product develop-ment relationships.
“Our business model is to develop a portfolio of products so we can look forward to multiple future income streams,” Mr Unsworth said.
“The best two products we have today are the flu vaccine and the blindness prevention drug, BDM-E.”
What Mr Unsworth did not say is that both of these drugs suffer from what can only be called an uncertainty factor directly related to their Russian pedigrees. In other words, because they have been developed in Russia they are unknown, and are yet to win a Western world stamp of approval.
Mr Morgan is one of the few people to cut through this prejudice. Others will as they look a bit deeper, and put the Russian research alongside the track record of Mr Unsworth and Mr Williams.
The key to BioDiem lies in its Russian connections, and with a product development agreement with the big Dutch/Swedish pharmaceutical company, Akzo Nobel.
For Australians these links have an “over the horizon” quality, adding to the stock market discount factor because few people get to see what’s happening.
With the flu vaccine, it is a case of original development at the St Petersburg Institute of Experimental Medicine, an ominous sounding establishment which has been in business for more than 100 years and was home to the groundbreaking physiological work of Ivan Petrovich Pavlov, and his dogs.
It was in Pavlov’s academy that Russian researchers developed a ‘cold’ flu vaccine, one that grows at 25° Celsius compared with 37° Celsius for a normal vaccine, and one which is injected nasally while still alive – hence the name, live attenuated influenza vaccine.
Some Western drug licensing authorities emit a collective shudder at the thought of putting a live vaccine into people, even if the vaccine dies on exposure to a hot human.
What they are overlooking is that the cold vaccine covers a much wider spectrum of the flu virus, an enormously tricky customer which mutates annually (or more often) to create serious problems in developing a consistent vaccine.
BioDiem, through its Russian connections, has obtained the licensing rights to this unique cold vaccine – and gone a step further.
It has also negotiated a product development agreement with the Nobilon division of Akzo Nobel, a business with world-class vaccine production facilities, including a bulk production system which dramatically supersedes the painfully slow egg cultivation method.
Adding weight to BioDiem’s claims to being on the right track in terms of developing a vaccine which will find a role in the fight against flu, especially the deadly avian flu, is that Akzo Nobel will make ‘milestone’ payments of up to $US8 million for the right to further develop the Russian vaccine.
“It really is a product which has significant advantages over other vaccines,” Mr Unsworth said. “It provides a breadth of cover and can be produced by cell culture techniques (mass production).
“On top of what we are continuing to learn, there is the evidence of 70 million Russian doses of the vaccine being successfully dispensed.”
Selling this story to the Australian market has been frustrating for Messrs Unsworth and Williams.
Few people have seen the research work, with Mr Morgan among the handful to have made the trip to St Petersburg to visit the experimental medicine centre, or a second Russian research organisation to provide BioDiem with a product for further development.
The second centre is the Institute of Bioregulation and Gerontology which has developed a number of drugs aimed at stemming the worst effects of old age. BioDiem’s major interest is in retilin which has the potential to correct age-related degeneration of the retina (a key part of the eye).
In pre-clinical trials in Russia the drug (dubbed BDM-E) has proved safe and effective in stimulating growth in damaged cells. Sydney University’s Save Sight Institute is working with BioDiem on further research into the drug.
Another product on the corporate agenda include an animal feed enhancer to replace antibiotics.
The trick, as Rod Unsworth has discovered, is to get the wider world to take notice of the research and the company, something he succeeded in doing with Delta West, but which is proving more difficult with BioDiem.
Triggers which might cause an awakening are an increasing number of forecasts of an avian flu pandemic, a rush to develop better vaccines, or a realisation by the market that people like Hugh Morgan rarely throw their money away on lost causes.
