03/06/2021 - 08:00

Perron and UWA to reap $70m windfall

03/06/2021 - 08:00

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The Perron Institute is kicking commercial goals, courtesy of big sales royalties and a planned ASX listing.

Perron and UWA to reap $70m windfall
Argenica chairman Geoff Pocock (left) with Steve Arnott and Steve Wilton. Photo: David Henry

The Perron Institute has provided a rare example of a Perth-based medical research centre delivering big commercial returns.

The not-for-profit group has 16 research groups investigating neurological diseases such as stroke, Parkinson’s and motor neurone disease.

Its biggest breakthrough was the development nearly a decade ago of drugs for treating Duchenne muscular dystrophy.

US pharmaceutical company Sarepta Therapeutics signed a licence agreement in 2013 allowing it to commercialise Perron’s research.

Sarepta has subsequently gained approval from the US Food and Drug Administration to market three different drugs.

Its commercial success is flowing back to Western Australia in the form of lucrative royalties, which are paid via the University of Western Australia.

Regulatory filings lodged by Sarepta in the US reveal it has paid $US19.9 million ($A25 million) to UWA over the past five years. Sarepta also revealed the total payments could be up to $US56 million ($A72 million), subject to regulatory and sales milestones.

A UWA spokesperson has confirmed these amounts and disclosed that it distributes up to 84 per cent of the money it receives to the inventors of the drugs and the Perron Institute, over the effective life of the various patents.

Perron has been paid $8.7 million over the past five years, including nearly $3 million in each of the past two years.

With Sarepta recently gaining FDA approval for its third drug, these payments are likely to increase.

The royalty payments provide a very handy boost for Perron, which had total income of $9.8 million in 2019.

Chief executive Steve Arnott is cautious when asked about the impact. “The royalties are finite, so we can’t become reliant on it,” Mr Arnott told Business News.

Mr Arnott said any money Perron received was reinvested into research.

“The game is to get the research into the community,” he said.

“It’s the translation we focus on.”

Mr Arnott also praised the work of professors Steve Wilton and Sue Fletcher, whose pioneering research led to development of the drugs.

“In totality, their work leading to the approval of three drugs is a rare achievement, something most scientists strive for but do not often accomplish in their entire careers,” he said.

Collectively, the three drugs can treat almost 30 per cent of patients diagnosed with Duchenne, which is the most common childhood form of muscle wasting.

Most children with Duchenne require a wheelchair before their early teens.

Professor Wilton said the platform technology developed for Duchenne muscular dystrophy was currently being applied to other diseases.

“We are exploring the application of this approach to many serious conditions, such as asthma, motor neurone disease, multiple sclerosis and possibly even COVID-19 infections,” he said.

The two professors continue to work together at the Centre for Molecular Medicine and Innovative Therapeutics (CMMIT) at Murdoch University, a joint research centre with the Perron Institute.

UWA said the money it retained from the Sarepta royalties would be used to support costs associated with patenting and proof-of-concept of new UWA innovations and other research-related initiatives.

“We are very proud of the significant difference UWA research, together with the Perron Institute, is making in improving health outcomes and quality of life for patients with neurological conditions,” the spokesperson said.

FDA approvals

Perron is not the only WA entity to achieve breakthrough success in the US.

WA medical researchers are responsible for the development of six drugs that have obtained FDA approval.

The other three are linked to Perth company iCeutica, which developed the SoluMatrix drug delivery platform.

iCeutica was acquired in 2011 by US-based Iroko Pharmaceuticals, which has secured FDA approvals for three drugs formulated using SoluMatrix.

In addition, Perth company Orthocell received US regulatory approval earlier this year for its CelGro platform, which is used to regenerate dental bone and tissue.

The inventor of this technology was Minghao Zheng, head of brain and bone research at the Perron Institute and Winthrop professor of orthopaedic research at UWA.

Intellectual property law firm Wrays has been involved in securing patents for most of these inventions.

Its chairman, Gary Cox, said WA life sciences and pharmaceutical researchers had achieved remarkable breakthroughs over the past three decades.

“The strength of that research is a testament to the innovative and progressive science being advanced in WA,” he said.

To put the WA numbers in context, it has been estimated that, in total, 15 drugs have been developed in Australian universities and secured FDA approval.

Argenica spin-out

Meanwhile, the Perron Institute has established a spin-out company to commercialise more of its research.

Argenica Therapeutics is aiming to list on the ASX in mid-June after completing a $7 million capital raising.

The proceeds will be used to commercialise a novel therapeutic that has been shown to protect the brain following strokes.

The therapeutic was developed by Bruno Meloni at UWA and Neville Knuckey at the Perron Institute.

Mr Arnott said this was the first time Perron had created an ASX spin-out in its 40-year history.

Argenica chairman Geoff Pocock, who has more than 20 years’ experience commercialising research and technology, said the company would have more capacity to fund drug development.

“The Australian capital markets, on the ASX in particular, are unique by global standards in terms of their risk tolerance,” he said.

“Investors in Australia have grown up investing in early-stage exploration and mining companies, they have enormously high risk tolerance.

“We can use the capital markets as effectively a venture capital source.”

Mr Pocock said the capital raising closed in one afternoon and was backed by well-known investors including Ian Middlemas.

Perron has been issued 3.5 million shares at a price of 0.01 cents per share in return for transferring its IP to Argenica.

Upon listing on the ASX, these shares will be worth about $715,000, but with potential to grow if the company achieves it commercial goals.

A similar deal has been of benefit to UWA.

Argenica’s prospectus mapped out the long lead time for developing drugs.

Researchers have been working on its IP for six years, from initial concept through to pre-clinical research.

The company is now ready to begin the clinical trial phase, which it said normally took between three and seven years and would likely require more capital.

If all goes to plan, Argenica is aiming to sign a licensing agreement with an established pharmaceutical company for later-stage clinical development, sales and marketing.

• To read more on medical research and technology in WA, see the Cutting Edge special publication, out on June 14.

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