No hard cell for Phylogica

Founded in 2005 as a spin-off from the Telethon Child Health Institute, Perth-based biotech Phylogica recently passed a milestone in efforts to commercialise its expansive library of disease-fighting genetic sequences, or genomes.

After spending close to $10 million on research and development over the past two years, Phylogica has made a breakthrough in the application of what it calls its ‘enabling technology’.

The company has found a peptide, typically used to carry drugs to cells surfaces, which can break through the wall of a cell to more effectively administer cancer-fighting drugs, for example, at the nucleus.

Phylogica’s next step in securing a commitment from pharmaceutical companies, which want to produce drugs that target exact locations within the body, is to determine exactly which part of its sequence is breaking through the wall.

Progress in the science has come as Phylogica has made changes to its leadership team, with former IKEA Perth owner Alan Tribe taking over as the biotech’s chair, while former medical practitioner and McKinsey & Company consultant, Rohan Hockings, will assume the role of chief executive.

In addition to Dr Hockings’ background in medicine and law, the Hockings family has been a major investor in Phylogica for about a decade and provided strategic oversight, with his father, Bernard Hockings, having been on the board from 2014.

“We’ve got a long history with the company so we’re intimately familiar with the organisation and the direction that it’s heading,” Dr Hockings told Business News.

Dr Hockings’ role will be to direct the company’s drug delivery technology towards commercialisation.

“There’s an enormous amount of interest in our technology and different people will move at different times, but the feedback people are providing us is they want to understand more about the mechanisms (of the sequence) and we have a lot of requests for cell specificity,” Dr Hockings said.

“The drug companies want to know how we’re getting inside the cell to work out how to rationally design the peptides.”

He said Phylogica had previously done deals with each of the top five global pharmaceutical companies, but its latest strategy was to move away from early stage R&D collaborations.

“We’ve done a deal with J&J, with AstraZeneca, Roche, Pfizer, Genetech, but the thing we’re interested in is not whether we do a deal with a pharmaceutical company, it’s whether we do a good deal that’s likely to progress into the clinic,” Dr Hockings said.

“We got $2 million upfront for the Johnson & Johnson deal and similar figures for the others, but they had milestone payments that went into the billions of dollars; it’s the milestone payments that drive the value.”

He said the company had already achieved positive results showing its technology could lengthen the lifespan of mice living with cancer, because for that disease the drug can be administered via an injection into the skin.

“But for any disease process where you’re going to inject it into a vein, a lot of drugs just end up getting stuck in the liver,” Dr Hockings said.

“What we need is to get really high-quality data from an animal that demonstrates whether our technology does what we say it does.

“If we can get that you’ll see the pharmaceutical companies move, and they should be moving in a way that demonstrates greater commitment than those early stage deals.”

He said the biggest influence behind the company’s current strategy was a major strategic review undertaken in the second half of 2017.

“The oversight of that process has been coordinated by Stephanie Unwin (former chief executive); that strategy remains very much consistent and now it’s just about progress against the milestones that were set,” Dr Hockings said.

As one of the first steps in its strategy, the company recently reported a significant expansion of its genome library.

Phylogica reported operating revenue at $2.8 million for the 2016-17 financial year, having reported no revenue the year prior.

It has a market capitalisation of $79 million.