Aus­tralia: A grow­ing hub for early-phase CRO ac­tiv­i­ties

BioSpectrum (Asia) - - BIO CONTENT - Priyanka Ba­j­pai­j­pai@mmac­

Aus­tralia is one of the most ma­ture mar­kets in Asia-Pa­cific for con­duct­ing clin­i­cal tri­als. The coun­try has a rich re­search en­vi­ron­ment, cou­pled with highly ex­pe­ri­enced in­ves­ti­ga­tors and re­search pro­fes­sion­als, and an ex­cel­lent health care in­fras­truc­ture. Ac­cord­ing to a re­port by Frost & Sul­li­van (2016), Aus­tralia is the coun­try of choice for early-stage pharma, biotech and CRO re­search given its low tax sta­tus com­pared to the U.S.

Aus­tralia is recog­nised as the hub for early phase clin­i­cal tri­als world­wide. Ev­ery year more than 1,000 re­search projects are car­ried out in Aus­tralia by phar­ma­ceu­ti­cal, med­i­cal de­vices and biotech­nol­ogy com­pa­nies, with a spend of more than $ 1 bil­lion on clin­i­cal tri­als ac­cord­ing to a re­port from Frost & Sul­li­van (F&S). Aus­tralia is fast-be­com­ing the pre­ferred choice for many biotech and phar­ma­ceu­ti­cal com­pa­nies that see the ben­e­fit of con­duct­ing early stage clin­i­cal tri­als in the coun­try. How­ever, ev­ery coun­try may have vary­ing rea­sons to choose Aus­tralia as their out­sourc­ing spot. One uni­ver­sal ap­peal is the fast ap­proval times with lower costs and com­pa­ra­ble qual­ity. There are many ad­van­ta­geous rea­sons as to why com­pa­nies con­tinue to choose Aus­tralia as a des­ti­na­tion, par­tic­u­larly for early phase de­vel­op­ment.

Cost-ef­fi­ciency: The Aus­tralian gov­ern­ment of­fers at­trac­tive R&D tax in­cen­tives in­clud­ing cash re­bates. Ac­cord­ing to a cost com­par­i­son study, Aus­tralia is 28 per cent cheaper than the US be­fore tax in­cen­tives; and 60 per cent cheaper af­ter tax in­cen­tives.

Elab­o­rat­ing on the global leg­isla­tive pri­or­i­ties on tax re­forms and how is it im­pact­ing the CRO in­dus­try in Aus­tralia, Dr John Moller, Chief Ex­ec­u­tive Of­fi­cer, Novotech, Syd­ney,says, “In the U.S., the re­duc­tion of the statu­tory cor­po­rate tax rate is likely to sup­port fur­ther R&D in­vest­ments from US-domi­ciled biotech com­pa­nies in 2018 and on­wards. How­ever, amend­ments to the US Or­phan Drug act will be re­duc­ing the tax credit al­lowed for clin­i­cal test­ing ex­penses from 50 to 25 per cent of qual­i­fied clin­i­cal test­ing ex­penses. The halv­ing of this fi­nan­cial sup­port is ex­pected to in­crease the num­ber of or­phan drug re­search ac­tiv­ity un­der­taken out­side of the U.S. Fi­nally, repa­tri­a­tion of cash held over­seas may fuel merg­ers and ac­qui­si­tions in the bio­pharma sec­tor and a greater ac­cel­er­a­tion of R&D in­vest­ments. On bal­ance we see these fac­tors lead­ing to a higher level of biotech fund­ing in the U.S., and this fund­ing will take biotechs a lot fur­ther in Aus­tralia, re­duc­ing the need for di­lu­tive cap­i­tal rais­ings.”

He fur­ther says “With biotech com­pa­nies in­vest­ing in more com­plex and global pro­grammes, we ex­pect the num­ber of out­sourced projects to con­tinue grow­ing and spon­sors to in­creas­ingly con­sider Asia-Pa­cific as a key lo­ca­tion for their tri­als. In Aus­tralia, the re­cent tax re­form has fur­ther re­in­forced the R&D ex­pense re­fund scheme, which is con­sid­ered as one of the most sup­port­ive in the world for clin­i­cal tri­als and which drives many small and medium sized biotech com­pa­nies to run their early phase tri­als in Aus­tralia.”

Reg­u­la­tory speed and flex­i­bil­ity: The Aus­tralian clin­i­cal trial process al­lows flex­i­bil­ity with­out com­pro­mis­ing qual­ity. It avoids du­pli­ca­tion of pro­cesses, sav­ing the spon­sors both time and money. Aus­tralia also has a unique and col­lab­o­ra­tive ap­proach to tri­als. There are cur­rently over 86 spe­cial­ist clin­i­cal trial net­works that of­fer ef­fi­cient ac­cess to the ca­pa­bil­i­ties of many ther­a­peu­tic ar­eas and quick turn around on fea­si­bil­ity in­for­ma­tion, mak­ing the selec­tion of Aus­tralian sites rel­a­tively has­sle-free. In ad­di­tion, many of these net­works also of­fer value added op­tions such as be­ing able to ne­go­ti­ate the trial costs on be­half of all mem­ber sites.

Clin­i­cal trial qual­ity: Clin­i­cal tri­als con­tinue to be

a strength of the Aus­tralian re­search and de­vel­op­ment land­scape. The clin­i­cal trial ecosys­tem in Aus­tralia is an in­tri­cate web in­volv­ing pharma com­pa­nies, CROs, clin­i­cal trial sites, pa­tients, ethics com­mit­tees, and many branches of the gov­ern­ment. Aus­tralia has a net­work of uni­ver­si­ties, in­de­pen­dent med­i­cal re­search in­sti­tutes, clin­i­cal trial net­works, biobanks, and CROs. Sci­en­tific re­search con­ducted in Aus­tralia ranks the high­est in Asia-Pa­cific in terms of pro­duc­tiv­ity, im­pact, and one of the most rig­or­ous patent pro­tec­tion sys­tems in the world.

Mul­ti­ple draw­cards as a CRO lo­ca­tion

In­creased R&D ac­tiv­ity and a shift to­wards out­sourc­ing are key driv­ers of the ex­po­nen­tial growth of Asia Pa­cific CRO mar­ket. Ac­cord­ing to F&S re­port, this growth has the po­ten­tial to out­source more than three-quar­ters of R&D spend­ing by biotech and pharma com­pa­nies. It is un­der­stood that there is a con­nect be­tween CRO and pharma and biotech com­pa­nies in achiev­ing their R&D tar­gets. Talk­ing about the fu­ture re­la­tion­ship of a CRO with pharma and bio­pharma com­pa­nies to achieve their mu­tual tar­gets, Dr Moller notes, “The out­come of clin­i­cal tri­als strongly re­lies on how the study is man­aged op­er­a­tionally by the CRO and which in­ves­ti­ga­tors are in­volved in the trial. Novotech heav­ily in­vests in build­ing for­mal part­ner­ships with ma­jor hospi­tal and med­i­cal spe­cial­ist sites through for­mal site part­ner­ship agree­ments, as well as in site man­age­ment ser­vices which fa­cil­i­tate rapid start-up ac­tiv­i­ties and pa­tient re­cruit­ment to meet the spon­sor’s ob­jec­tives.”

Com­pa­nies in­tend­ing to con­duct clin­i­cal tri­als in Aus­tralia look for ex­pe­ri­ence in the spe­cific phase and ther­apy area. Ex­pe­ri­ence of work­ing with smaller biotech firms and multi­na­tional com­pa­nies is a must for a CRO. This pro­vides spon­sors the as­sur­ance that the CRO thor­oughly un­der­stands the chal­lenges work­ing with smaller for­eign biotech firms and busi­nesses in a dif­fer­ent time zone. How­ever, there is a catch. “Biotech com­pa­nies are some­times at­tracted to global CROs for large-scale late phase tri­als for their per­ceived abil­ity, sys­tems, global reach, and reg­u­la­tory ex­per­tise. A chal­lenge they of­ten face, how­ever, is a mis­match in strate­gic align­ment be­cause global CRO busi­nesses are struc­tured to serve com­plex multi­na­tional phar­ma­ceu­ti­cal com­pa­nies. Small to medium sized bio­pharma re­search com­pa­nies typ­i­cally have a leaner clin­i­cal trial in­fras­truc­ture and the fo­cus is on speed, cost, the abil­ity to adapt to new op­er­a­tional re­quire­ments quickly, and re­duc­ing op­er­a­tional risk. Be­cause of these fun­da­men­tal dif­fer­ences, bio­pharma com­pa­nies can be side-lined and not re­ceive the at­ten­tion they may from a re­gional spe­cial­ist such as Novotech”, adds Dr Moller.

Model to sup­port in­no­va­tion

Given that the in­vest­ment in terms of time and money to de­velop a new ther­a­peu­tic or de­vice are sig­nif­i­cant and that the mile­stones dur­ing de­vel­op­ment can be dif­fi­cult to reach, a col­lab­o­ra­tive ap­proach, which im­ple­ments all avail­able re­sources to help en­sure the suc­cess of clin­i­cal re­search for Aus­tralian in­no­va­tions is a sound idea. With the next gen­er­a­tion of ther­a­pies comes higher level of pro­to­col com­plex­ity and pa­tient re­cruit­ment hur­dles. Dr Moller adds, “Novotech fo­cuses on struc­tur­ing re­la­tion­ship with key in­ves­ti­ga­tors, other re­gional CRO spe­cial­ists, and on pro­vid­ing best in class sys­tems to its clients. This en­sures smooth man­age­ment of large and com­plex tri­als.”

The Next Decade

With a strong re­search en­vi­ron­ment, Aus­tralia is a vi­brant, world-rec­og­nized des­ti­na­tion for early phase clin­i­cal tri­als. A leader across the key di­men­sions of speed, qual­ity and cost, Aus­tralia has fast, flex­i­ble clin­i­cal trial ap­proval pro­cesses at a com­pet­i­tive global cost. Dr Moller be­lieves, “One of the most im­por­tant trends that we see is an in­creas­ing in­vest­ment in up­front clin­i­cal de­vel­op­ment strat­egy, in­clud­ing the use of care­fully de­signed adap­tive pro­to­cols. In our view, an ef­fi­cient ap­proach to clin­i­cal trial de­sign will have the great­est im­pact in con­tain­ing the es­ca­lat­ing cost of drug de­vel­op­ment.”

Many biotech com­pa­nies are also turn­ing to­wards a re­gional CRO al­liance model to ex­e­cute their global stud­ies. The gov­ern­ment also pro­vides at­trac­tive in­cen­tive schemes to boost R&D. Dr Moller is very pos­i­tive. “Af­ter the ma­jor slow­down for cap­i­tal raised by biotech com­pa­nies in 2016, looks like 2018 will be a record year with eq­uity fi­nanc­ing that to­talled $35 bil­lion dur­ing the first two quar­ters com­pared with $ 22 bil­lion over the same pe­riod in 2017.”

Aus­tralia’s su­pe­rior sci­en­tific tal­ent and ex­cel­lent med­i­cal in­fras­truc­ture makes it a pre­ferred des­ti­na­tion for early phase clin­i­cal tri­als, and the preva­lence of CRO com­pa­nies.

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