Taking basic science and turning it into a medicine to improve the well-being of humans is the stuff scientists dream of. It is also what investors pin their hopes on. That’s why a small Kiwi pharma which has developed a world-first approach to treating Parkinson’s disease and Friedreich ataxia is starting to cause a stir in both scientific and investor circles.

Until recently Antipodean Pharmaceuticals has been flying largely under the radar. Founded in New Zealand in 2002, the company is developing a compound called MitoQ. If MitoQ (mitoquinone) does what its investors expect it to, by 2010 Antipodean Pharmaceuticals will enter the domain most biotech aspirants only dream of. In the same way Kiwis bask in the glory and international attention given to Peter Jackson’s The Lord of the Rings trilogy, Antipodean’s success will be regarded as a national victory, highlighting the fact that good science can be found in far-flung places and that New Zealand has the makings of a hotspot for drug development.

But all that is still a few years off. Antipodean is currently running phase II clinical trials on the compound to treat the progressive neurological disease Parkinson’s. Over 800 New Zealanders are diagnosed with the disease each year and there are some four million people affected worldwide. Famous sufferers include boxer Muhammad Ali, actor Michael J Fox and the late Pope John Paul II. The trial involves Parkinson’s New Zealand and ten consultant neurologists at the country’s main regional hospitals who will assess and advise the 120 participants.

“This is potentially groundbreaking technology deve-loped by a New Zealand team. It has already been internationally recognised as the first to effectively target a key mechanism underlying the disease,” says Dr Barry Snow, clinical director of Auckland Hospital’s neurology department.

The compound is also being developed to enter phase II trials in Australia for Friedreich ataxia — another disease scientists associate with degeneration of cells in the nervous system.

If successful, MitoQ will be the first disease--modifying therapy available for both Parkinson’s disease and Friedreich ataxia.

But before we get ahead of ourselves, in terms of a biotech company’s lifecycle this is just a step up from infancy. Many unpredictable and teething problems are still possi-ble. After phase II trials a third set is needed, and if that all goes according to plan it will be at least 2010 before Antipodean gets to know if it will truly succeed.

For every successful biotech story, there are about eight or nine failed ventures. And there are plenty of examples of biotech companies never moving beyond second-stage clinical trials.

Venture capital money is hard to come by due to the spectacular flops of many biotech companies during drug development. But the market for pharma-ceuticals is so huge that investors continue to fish for the next big success out of a pool of biotech companies. Figures on the Association of British Pharmaceutical Industry’s website show that in 2004, the world’s top 20 pharmaceutical companies had £42.58 billion (about NZ$127 billion) in sales.

So there are big rewards for those willing to shoulder the risk. The money raised by outside backers for Antipodean is understood to be the largest for any new drug develop-ment to date in New Zealand. Last year Antipodean Pharmaceuticals, a company formed by Auckland-based Antipodean Biotechnology, raised $23 million in New Zealand, Australia and the US to advance MitoQ’s technology. The venture capitalists involved in that round of fund raising include Australia’s GBS Venture Partners, US-based Delphi Ventures, 5AM Ventures and Versant Ventures.

Company founder and chief executive Dr Ken Taylor is fully aware of the financial opportunities, as well as the pitfalls associated with his project. After spending some 25 years with pharmaceutical giant Roche, he has insight into what works and what doesn’t in the business of developing and commercialising a drug. He has been involved in the clinical development of several commercialised drugs including the likes of Xenical, and Madopar and Tasmar for the treatment of Parkinson’s disease.


The opportunity
Taylor returned to New Zealand in 2001 after an illustrious career with Roche. While at the bigwig pharma he noticed that although New Zealand was doing interesting research, it was hard getting big drug companies interested in what New Zealand has to offer. Much of that was due to the culture of big pharma — they aren’t particularly easy to get enthused about exciting discoveries made outside their comfort zones. With Taylor’s keen nose for good science he soon learnt of the discovery made by Otago University chemistry professor Robin Smith (a widely acknowledged leader in the field of chemistry) and his former colleague Dr Michael Murphy of Cambridge University in the UK (a world leader in mitochondrial studies). These two were no strangers to Taylor. Smith was his varsity mate, while Taylor had met Murphy at Cambridge. The two inventors represent the kind of people Taylor has a lot of time for. “These are my kind of heroes in the scientific world — people who understand basic chemistry and have the ability to design drugs for the human body-based discoveries made in chemistry,” Taylor says.

Smith and Murphy were then working on unlocking the mysteries surrounding mitochondria.
Mitochondria are the power producers in our cells. They are the batteries within our cells that metabolise food and oxygen to supply the body with energy. Scientists think mitochondrial damage is responsible for various human diseases. Parkinson’s disease, for example, is caused when nerve cells in the part of the brain that produces dopamine begin to die, leading to lack of coordination and other problems such as tremors and stiff muscles and joints. Recent research has increasingly linked the death of these dopamine-producing nerve cells to oxidative damage caused by mitochondrial dysfunction.

Okay, that was the really technical bit but take a deep breath because here’s some more.
So the Otago University scientists were the first to target drugs to the mitochondria that are powerful blockers of oxidative damage. They then developed a drug, MitoQ, which involves two parts: a targeting component that directs the drugs to the mitochondria and an antioxidant component which prevents oxidative damage and nerve cell death.

In their quest to understand mitochondria, Smith and Murphy discovered that by stitching two chemicals — the ‘Q’ part of a coenzymeQ (an antioxidant) to another chemical called triphenylphosphonium — they were able to get a lot more antioxidants past the natural barriers inherent in the cell structure to the mitochondria. Scientists today have sufficient knowledge about antioxidants to know that they help keep our cells healthy. Smith and Murphy’s concoction of antioxidants in MitoQ would deliver 1,000 times what coenzymeQ could deliver to the mitochondria. It’s mind-blowing stuff with potential for widespread applications.

Smith says the MitoQ discovery was an event worth waking up to. “It is pretty exciting how very pure science has a chance to be applied this way. What we have done is to build an understanding of basic chemistry and to apply it to biology.” The work on the chemistry of MitoQ has given the research team lots of ideas for other applied chemistry, he says.

But as far as a businessman like Taylor was concerned, that was still in the realm of good science. Taylor is pretty clued up on the fact good science alone isn’t sufficient to build a drug company. “When you do have an invention, what you need is to go to the expert and ask if there is a need for this invention, if there is a need for this invention now, whether there will still be a need for this invention in five to ten years’ time,” Taylor says.

He got together a group of early seed funders, including some familiar Kiwi corporate names such as Gary Lane, Colin Reynolds and Trevor Farmer, along with Otago University’s research commercialisation arm Otago Innovation Ltd (OIL) and the Foundation for Research Science and Technology (FRST). Otago University engaged Antipodean as the commercial partner to take the research from the lab to the rest of the world.

Taylor initially structured the company as a biotech seed company to raise the capital necessary to identify a lead compound and do early development work for MitoQ. After achieving that he registered Antipodean Pharmaceuticals as a US company, a requirement for attracting investment from US and Australian venture capitalists.

Colin Dawson, chief executive of OIL, says his organisation has been fully aware of the risks associated with Antipodean all along. “We knew all the time there was going to be significant company risks. But for us, what we try to do is to be sure our commercial partners are competent.”

The intellectual property for MitoQ originally held by OIL was transferred to Antipodean Pharmaceuticals last year to enable Taylor to take the project global. OIL has, in turn, got 5.6% equity in Antipodean Pharma.


The journey
Making the quantum leap from basic chemistry to designing a drug to meet the body’s needs is the Holy Grail for a company such as Antipodean. For the scientists involved in designing a drug the journey is fraught with trials. It begins with identifying which compounds work, getting the right compound together in the right quantities, and getting clinical data to prove it has the desired effect. The data has to be consistent across a wide sample of trials. Something as simple as delivering antioxidants to a damaged cell seems like a straightforward affair, except our bodies are complex machines with a strong intelligence to boot. And there’s no telling whether what worked in the laboratories will do so when administered to humans.

“Everyone knows this is hard. But no one knows how hard. The hardest part is when you run into technical diffi-culties,” Taylor says. Those technical difficulties can be company killers, he adds.
Will the phase II clinical trials show clinical efficacy for the Parkinson’s patients it will be running tests on? Taylor is confident at this point. “We expect it [MitoQ] to work. We think we have got the right doses. What are the odds against our compound? To put a percentage on it [the success rate], from a drug-development perspective, that’s pretty difficult to say.”

Taylor has strived to keep development of MitoQ in New Zealand. Organisations involved in manufacturing and testing the drug in New Zealand include Industrial Research Limited (IRL), Douglas Pharmaceuticals, the Institute of Environmental Science and Research and the Christchurch Clinical Studies Trust.

Taylor dreams of New Zealand being a centre of excellence for the research of future drugs and thinks it has potential to do so because we are small and highly flexible.

If Antipodean succeeds, it will be the first company in New Zealand to have invented and manufactured a drug here. Two other New Zealand companies are in the same race. The first, Protemix, has developed an exciting pipeline of diabetes-related drugs, including one compound, -Laszarin, currently undergoing phase II clinical trials. The other is an anti-cancer drug designed by Kiwi scientists at IRL and licensed to US biotech company BioCryst.

Investing in Antipodean is akin to buying a piece of the dream.

FRST has made a number of mainly small research grants to the company but recently injected a further $1.7 million to give a total of $2.5 million so far because it believes the project has the makings of a success story. The buzzword within government funding circles is commercialisation.

“What was exciting for us was Ken’s [Taylor] ability to build bridges across various disciplines and parties. He knew how to take the process forward,” says Lins Kerr, FRST senior business manager.

But the critical question was would an investment in Antipodean create value for New Zealand? The foundation had a technical expert from Schering Plough help review the proposal before committing further funding. And it has committed the funding even though it took a few tries before the scientists zeroed in on the right formula for MitoQ. “I can certainly vouch for the fact that there were technical challenges and there were some tough times,” Kerr says, but the foundation is confident of the compound now under trial. It wasn’t just about FRST funding research, Kerr says, but “about building capability; opening the doors for future drug development in New Zealand”.

If you want to sell drugs to the US, being close to the potential users, buyers and licensers is a logical move. While Taylor has played an instrumental role in bringing together myriad parties from New Zealand to design, develop and make MitoQ into a drug, he needed to move into a bigger pond to access deeper technical expertise and more investors.

To be successful globally, Antipodean is at a stage where global input is critical. Taylor is also mindful that it is no longer about running this show in New Zealand but about using the best available out there — be it technical expertise, funding, marketing — to give MitoQ the chance it deserves. Shifting the corporate headquarters to San Francisco in April was a logical progression, although the operational base remains in Auckland.

For the moment, Taylor is happy about the buzz MitoQ has created in the scientific community after making the cover of the Journal of Biological Chemistry last year. Until recently, the company had kept a relatively low profile to avoid early hype about MitoQ’s potential.

Recent publicity and the coup in the journal will help when it is time to seek more funds. Taylor is keeping his own counsel on which track the company will take next to build up its financial coffers — whether from venture capitalists again or an initial public offering on the sharemarket.

The venture capitalists who have put money into the company so far did so because they liked the science, Taylor says.

“We are still a young company. From the point of view of investors, they are looking for drug and research expertise; they are looking at whether your money is well spent. They will also look for experience and track record. These will ensure our success in the future.”