Will Adelaide Make a Better Living Through Chemistry? Inside SA’s Biomedical Boom

A combination of government incentives, new infrastructure, speedy results and world-class research are helping put Adelaide on the map as a top location for pharmaceutical trials, say industry players.

While the development of the West End’s health and medical precinct has received ongoing media coverage for its architecture and overall cost, less attention has been paid to the nuts and bolts of work and growth going on in the sector, particularly in the pharmaceutical industry.

Adelaide now finds itself in the enviable position of being an ideal location to conduct phase one clinical trials of pharmaceutical research, say industry and government insiders. The key attractors for this type of international investment are speedy turnarounds in ethics approvals, big government-funded incentives for smaller, emerging companies to conduct those trials here, and the sophisticated health sciences infrastructure already on the ground.

“This is almost $4 billion in investment,” says Marco Baccanti, chief executive of Health Industries South Australia, of the biomedical precinct. “It is something new that was not available before. It’s all affecting and will continue to affect the level of interest from international groups. Before, Adelaide was not considered a city with a critical mass of development or research to be considered as a destination for these types of industry.”

The development of a new pharmaceutical product is time-consuming and costly process, but fast ethics approval and a government-funded 43.5 per cent refund for the cost of companies investing in clinical trials in Australia make this country an attractive location to do business.

“With these two points of speed and value, we are making Australia extremely attractive for clinical research,” says Baccanti, who is tasked with attracting these types of international investment. “Once the company realises that it is faster and they’ll get some money back at the end, these advantages and world class data make it very attractive.”

The cashback incentive is explicitly designed to attract this international investment to Australia and, crucially, make returning customers of those groups, while the proceeds go to helping fund local research.

“It is an incentive available only in Australia, only for research and development activities, and only for companies that are smaller with an annual turnover of less than $20 million, but those characteristics become attractive for international investment,” Baccanti says..

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Support for Australia’s own biomedical research is aided by international investment, says Marco Baccanti

One company from Texas, Nacuity Pharmaceuticals, took the bait and is currently conducting phase one clinical trials on a drug intended to combat the effects of Retinitis Pigmentosa, a disease that afflicts its sufferers with worsening sight and eventual blindness. Nacuity CEO Halden Conner says that while he was initially reticent to head down under, he could not be happier with the scheme in Australia and the services provided so far in Adelaide.

“I had a friend who has done a lot of business in Australia, who said, ‘You’re really overlooking an opportunity if you don’t think about doing some or all of your clinical trials in Australia. They do great work. It’s much less expensive and their work is of such high quality that the FDA has never had a problem with it,’” Conner explains. “I went to our team and said, ‘What do you think about going to Australia?’ They said, ‘You’ve got to be kidding! We can run this trial in Dallas, Texas, 30 miles away. Why would we go all the way down there?’

Once the time and cost benefits, which include an average six-week turnaround for ethics approval, as compared to a six-to-nine month turnaround in the US, were explained it became a “no-brainer business decision”.

“Now we’ll finish that trial in mid- December, which means that we are two thirds of the way through the trial and could not be happier with the quality of it. I’m telling you, you can put me down as a big fan.”

One burning question amid all the good news is this: how can a trial receive ethics approval here in a matter of weeks, while the US and Europe can take the better part of a year to do so? Baccanti says the ethics approval process is as speedy as possible precisely to maintain that attractive incentive, but is just as reliable and consistent as those conducted abroad. Conner agrees with the initiative, stating that nothing that has passed this ethics approval has been turned down by the FDA in the US.

“They meet regularly and focus on safety,” he says. “I’ve been very impressed with their diligence, knowledge of safety and the safeguarding of patients that will be taking this. But they aren’t burdensome. The fact that you’ve established a mechanism of ethics committees that can evaluate quickly and approve a process is why you save so much time.”

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Adelaide’s CMAX is internationally recognised as a destination for phase one pharmaceutical trials

Familiarity is helpful for Conner too, as his wife originally hails from Adelaide, but that coincidence didn’t affect the economic calculus Nacuity made to bring the trial here. One instrumental part of this pharmaceutical industry food chain is the consulting companies who act on the ground to make sure it all runs smoothly for the parent company. It is a requirement of the aforementioned government benefits that a company conducting trials here must be incorporated and paying taxes in Australia to qualify. As such, consultants help steer the ship offshore, and navigate the course of cultural, political and legislative requirements of the country.

One such company, currently working for Nacuity among other firms, is CoSec Consulting. Based in Melbourne, with directors present in key research cities like Adelaide to handle the in-person requirements of the industry, CoSec is described as a “wonderful company, and a real pleasure to deal with” by Conner.

Blair Lucas, Cosec’s managing partner, says that a major part of the consultant’s role is managing the diverse companies’ on-the-ground operations that might have varying expectations.

For example, the way that an American company conducts administration is likely very different to the way a Chinese company does, or a European company might have totally different expectations on their legal responsibilities and requirements as compared to an Australian one. Perhaps counter-intuitively, though, working with a group that is more culturally different to Australia can be easier than one that is more similar, says Lucas.

“They have to trust us to set up and run their company here, very far away and do it all properly and have a lot of authority of that company. We try to build that trust by being absolutely responsive to them.”

Lucas is optimistic about the growth of the industry in Adelaide, albeit for obvious reasons, and says that the city is one of the best in the country for these phase one clinical trials.

“Really there are only three or four clinical trial sites in Australia that we refer to,” he says. “To be honest, of those, the ones we refer to most are CMAX in Adelaide and Linear in Perth. The reason we do is that they’re the best in terms of client engagement… I like that in this state, the real strength they have above every other state is the hand-inhand combination of CPR Pharma [a local contract research organisation] and CMAX. Together they provide that full package of support and execution, so it’s a really handy interaction.”

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Inside the CMAX facilities

On the subject of government support through speedy ethics approvals and the refund of nearly half of costs incurred, Lucas says international client’s typical reaction to the offer is “incredulity and disbelief”.

“Normally the response is, ‘What’s the catch?,’” he says. “The reason is that it seems too good to be true. But the purpose of the policy is to invest in new industries in the wake of the mining boom. The industry is very good already, but it needs investment. We simply can’t put all the dollars in domestically because there are only 25 million people here, but foreigners can. Of say, a million dollars, you’ve given $400,000 back but you’ve poured $600,000 into the industry. That money is used in infrastructure investment and our own research, and that research is going to be done somewhere, so it makes sense to reap the benefit.”

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