On track to target tumours

Although Alchemia Ltd has made its name developing a generic version of blood-clotting drug fondaparinux, it is advances in the company’s cancer portfolio that investors should keep an eye on.

Chief executive Pete Smith said the portfolio was acquired after the company purchased Meditech about five years ago.

“We are taking generic cancer drugs and making them work more effectively in targeting a cancer tumour,” he said.

“We’re using a formulation technology called HyACT, which is the platform technology to formulate drugs that target the tumour. We have shown very clearly that we can give the same dose of chemotherapy to the patient, but we make it work better because more of the treatment is targeted at the tumour.

“The problem with chemotherapy is that it is poisonous to a lot of cells in the body, including the tumour. Every chemotherapy is given at the maximum dose the patient can tolerate, not the optimal dose, which is optimal for killing the tumour.

“What we are doing is soaking the body in the same amount of chemotherapy but targeting it at the tumour site. This technology has the promise of increasing the potency of the chemotherapy drugs towards the tumour but not change the way it behaves outside of the tumour.”

The company has just commenced phase 3 testing on the products, with phase 2 testing in colorectal cancer showing the technology more than doubled the effectiveness of the chemotherapy without changing the toxicity level.

“We were amazed we saw such a big result,” Smith said.

“For a lot of cancers, we haven’t seen big gear changes in the effectiveness of treatments. Even some of the newer therapies, that people can pay $30,000 for, are only pushing out patients’ lives by a matter of weeks or months. I think what we have is on a par with the incremental improvement of these other drugs, but obviously at a much lower price point.”

The company is expecting primary results from this phase 3 study in Q3 2013, with the option of creating a new listed company to handle the cancer portfolio also being slated.

“We have taken a generic drug and improved it to make a new branded product out of that,” Smith said.

“We could work with companies that are developing new drugs to make them work better, or companies that have drugs which are going off patent to assist with life-cycle management. There are a whole range of different deals we can do with this technology.

“The dream is that in the future a lot of different cancer drugs will be formulated using our technology. We see enormous upside if we get this trial working right.”

IN other areas of performance, Smith told The Elevator that Alchemia was founded on its ability to perform complicated chemistry processes.

“That complex chemistry has enabled us to come up with a synthesis of a molecule called fondaparinux,” he explained.

However, the molecule had one flaw – it was incredibly difficult to make on a commercial scale. Most synthetic chemical processes have five to six steps, but this process had more than 60.

“Every step has a yield – the more steps you have, the less material you produce at the end,” Smith said.

“Obviously if you are trying to make many kilograms of this it becomes an issue. If you are losing a third or half the material at every step, you will only produce a small amount.

“Using our chemistry we came up with a new way of making it. It is still quite complicated. The barrier to entry is just that it is a very difficult molecule to make. We think we will be the only competitor in the market for a considerable period of time.”

After launching in the US market last year after approval from the FDA, the Alchemia has paired with Indian manufacturer Dr Reddy’s for distribution, where the latest data shows sales around $1.4 million weekly. Alchemia receives a 50% share of the operating profits.