Pharmaxis breaks down Russia’s drug barrier

29th Sep 16

Release Date: 29/09/2016 10:15am

Australian 28 Sept
Gary Phillips, head of Australian drug developer Pharmaxis. Picture: John Feder

Sarah-Jane Tasker

The Australian

September 28, 2016

Small Australian drug developer Pharmaxis has become the first company in the world to get an ­orphan drug approved in Russia under new laws it campaigned for to allow the sale of its cystic ­fibrosis treatment.

Chief executive Gary Phillips says he identified early that a major obstacle in Russia to progressing the sale of Pharmaxis’s drug Bronchitol was a law that required all drugs to have a local clinical study before it could be approved.

That law, he says, has meant there have been no orphan drugs — drugs that very few patients take — approved in Russia for eight years.

“We became a case study in the Russian parliament as to the problem with their law ... the law for orphan drugs needing a local clinical trial was repealed and Bronchitol is the first drug to benefit. It has pioneered a path,” Phillips says.

“This little Australian company has instigated a change in a regulation in Russia and become the focal point in a case study that has pushed the change in law over the line.”

The drug, which will be sold in Russia by the end of the year, was developed out of Royal Prince ­Alfred Hospital in Sydney and is manufactured in Sydney.

The scientists working at Royal Prince Alfred Hospital first noted that the drug produced an effect that increased the clearance of mucus from patients’ lungs.

“They struggled for a few years to work out what to do with the idea, then we licenced it from them in 2002,” Phillips says.

“We have done three very large clinical trials across the world to get where we are now ... we are really looking to the future with this product.

“The launch in Russia, along with the other markets we are already in, will see the product make a profit in a couple of years time. We are hoping a trial for the US market will lead us to a launch there in 2018.”

Phillips says the drug, which is a dry powder in a capsule and is ­licenced in Australia, Britain, Germany and Scandinavia, is different to other drugs that cystic ­fibrosis clinics use.

Russia has approved the drug for the treatment of paediatric and adult cystic fibrosis. The ­approval makes Russia the largest market accessed to date for Bronchitol.

There are about 10,000 cystic fibrosis patients in Russia. Last year the market for CF drugs to deal with mucus clearance was worth about $US29 million.

Until 10 years ago, when Russia decided to dedicate resources to cystic fibrosis, the average life expectancy of a patient with the disease was 18 years. It is now up to 30 but that is still about 10 years lower than the average in Australia. “They still desperately need new drugs and treatments. That was part of the case we made to get government support,” Phillips says.

He says he has not heard of any other Australian drug discovery companies venturing into Russia, adding that the country was sometimes a political “no-go” area.

But having previously worked in Eastern Europe for a big pharma company for six years, he knew Russia was a big market for orphan diseases given the size of its population.

“To be successful in Russia you have to have access to people who understand the local bureaucracy and the hoops you have to jump through and they have to know the people there,” he says.

Phillips says the success in Russia comes after 14 years of the company developing and pushing its product.

He says Australian government policies on innovation needed to recognise the long lead time on drug development. “This is 14 years of work Pharmaxis has put in,” Phillips says. “Governments come and go and talk about different innovation policies and some of them don’t understand the length in biotech.

“People who invest in us are looking to get their returns back much longer than the election cycle. We need broad cross-party support for what we’re trying to do to create an investment environment people feel comfortable in.”

Phillips says Australia has great science and innovations but the translation of that research into a commercial product was still missing.

He says Australia has lacked a strong venture capital industry compared to the US, adding there is not enough funding to take an idea to a stage where it has value. “Companies often list too early and as a public company you’re under pressure immediately to produce results. You’re at the whim of the stockmarket,” he says.

He says more biotech companies that can demonstrate they are capable of taking an idea and developing it are needed.

He says he focuses on what big pharma wants. “I try to make sure everything we do internally is producing a data package, which is marketable to the end customer, which is the big pharma companies.”

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