ASX-listed biotech company BioDiem is focused on developing vaccine and therapies for infectious diseases and turned over $1.33 million last year thanks to licence fees from India and China.
Chief executive Julie Phillips talks to us about how finding a virus at BioDiem was like finding “a gold mine”, the problems with government grants for biotech firms and the pros and cons of being a listed company.
Position: Chief executive
Tell me about your background and how that's helped you in the role now?
I've been at BioDiem now for three years. Previous to that I'd worked in some smaller start-up companies that were looking at more of a biotechnology focus. And particularly the opportunity for Australian companies and science in vaccines and other highly sophisticated technologies; you could see the real opportunity for us in that space.
My background is working in multinationals and so mainly in regulatory trials and pricing. At the time you don't realise how good a background that is until you move into smaller companies and realise that the context of why you start developing any type of project and looking at the whole investment decision and what can you sell it for is second nature.
I could see just working, particularly through the post global financial crisis, working with a lot of small companies that were under a lot of pressure, even though they have good science it was hard to raise money for development programs.
The other thing which has been apparent over the last five or six years is that a lot of other therapeutic areas are just flat because drugs are coming off patent and there's a lot of competitors out there and a lot of generics in the market, whereas with vaccines and infectious diseases we're on the crest of a new wave.
When you think vaccines you probably think about whooping cough and diphtheria and tetanus and childhood immunisation but now people are creating vaccines for new and more serious infectious diseases like malaria, tuberculosis, that sort of stuff. It’s looking at both prevention and treatment.
In the last 20 years the big companies have pulled out of development for treatments for infectious diseases, and resistance has really sprung up. Everyone's on the back foot with new treatments.
What I found in this company three years ago was that the company was based on some Russian technology and one of the technologies is codenamed BDMI and it is a normal drug which has shown activity against a whole range of the sorts of bugs which are really causing a problem now. So we've tailored the development program for it towards these highly attractive markets. We've reformatted the company in the last 12 months to be vaccines and infectious disease focused.
How did you identify the niche you wanted the company to move into?
The existing projects within the company were antimicrobial, so that was a really clear one. The other was the company's main technology, which is a flu vaccine technology, and a flu virus.
The flu virus was excellent because it's already been used for more than 50 years for flu prevention. So looking at this company and seeing a live virus which has a big safety record was a gold mine.
In my previous life I'd been looking to find such a virus not ever realising that this one existed.
A colleague I'd worked with in a previous company is a vaccine designer and he's got a couple of patents behind him, so he tweaked onto it as soon as I joined this company. He read the material and rang up and said, “Have you thought about using the flu virus as a vector?” because that's what we've been looking for in our previous company.
But BioDiem had licensed that asset to another company – so I was trying to get out of that. It was getting very miserable because it looked like we couldn't access this without getting into a severe negotiation with our license partner and giving away the opportunity. Then the company we had it licensed to was acquired, and they gave the technology back to us.
We were thrilled. The opportunity was much bigger for us because hardly anyone else is doing this work, because they just can't find a virus. Our virus is proprietary. The sequence is a trade secret, so we don't have patent issues either. Our strategy for a lot of the work we do is co-development, so there's a lot of risk-sharing with that, it reduces our costs. We accelerate our programs; we can do more. With the BDMI program we have four partnerships with the National Institute of Health, and luckily they've welcomed people from outside the US to submit their drug candidates to work in certain disease areas of interest to the US NIH.
With any new product coming on the market, there's lots of unknowns, but you can charge a higher price if you go for the right sort of indications. For example, if you can save lives, then you're looking at a cure and can charge a higher price whereas if you're just making bald men's hair grow back a little faster or diminishing the rate of hair loss, no one's really interested in that except the bald men, and that's a bit harder to get. So there's a lot of strategy about exactly what you target with different initial targets for this sort of program.
A lot of biotech companies have to really struggle because they spend a lot of time in research and development and it takes a long time to commercialise a product. How did you deal with those issues at BioDiem?
The flu program that we have in the company is already commercial. We’ve licensed the program to be manufactured and, separately to that, we've got an agreement with the World Health Organisation for a different manufacturing method. It's in eggs; it's a traditional flu manufacturing method. That's already licensed through the WHO to India and China and we received $1.33 million for it last year.
Commercialisation, for us, is about issuing licences, not selling the product ourselves. That brings us closer, shortens the research and development phase for us. Knowing full well that investors in biotech are very conscious of long development times, and I am as well, it's much better to licence something out early. Unless you can be sure of your timing and your development path, it's better to licence it early to someone who's got the pockets and the resources to quickly develop it to market.