Running First-in-human and Vaccines Studies in Australia
Arsalan Arif: Hi everyone and welcome to our webinar. Running first-in-human and vaccine trials in Australia. I'm Arsalan Arif, the Publisher of Endpoints News. Our panel is sponsored by Novotech today, and I'm delighted to introduce our panel. We have Dr Jeff Loutit, the Chief Medical Officer at Qpex Biopharmaceuticals. Next, we have Dr Simone Flight, Principal Consultant at Novotech BioDesk. Then we have Dr Paul Griffin, Principal Investigator at Nucleus Network, and Stewart Walker, President of CoSec USA. We have an approximately 60-minute session today. A presentation from our panel followed by a Q&A session. Now I encourage everyone in the audience to ask questions of the panel using the Q&A button. For any questions the panel is not able to answer live, we will attempt to get back to you by email. Now for our presentation, let's start with Dr Simone Flight. Dr Flight, on to you.
Dr Simone Flight: Thanks, Arsalan. I've been working with Novotech for over six years now in BioDesk. BioDesk is a department within the Novotech CRO which specialises in consulting throughout all stages of development and provides strategic advice in regulatory affairs in all of the major jurisdictions.
To give you a snapshot of Novotech as a CRO, we were established almost 25 years ago, headquartered in Australia and have grown strongly into Southeast Asia with close partners in Europe and the US.
For those of you who appreciate technical databases, the Novotech team has the flexibility to work across a number of different platforms which are both FDA and EMA compliant in their data presentation.
As I mentioned, Novotech has a very experienced consulting team in CMC or quality, non-clinical and clinical. We primarily work with small and mid-size biotechs, and we do pride ourselves in finding the most cost effective and expeditious solutions for our clients.
Our principal team has more than ten years' experience each in each of their particular areas of expertise.
From a therapeutic speciality area, we are not particularly specialised in any particular area but have a wealth of experience across many therapeutic areas. Now these primarily include oncology, indications, infectious diseases, neurological conditions. We have also worked on a number of dermatology, respiratory, and also rare genetic disorders, to name a few.
Australia is well regarded as a jurisdiction to commence first-in-human and early phase trials, and there are a number of reasons for this. You can see from the graphic, there's been a fairly rapid increase in the number of biotech trials that have been initiated in Australia between 2017 and 2019.
One of the great appeals of coming to Australia for first-in-human and early phase, is the very quick start-up scheme that we have here. We don't require, generally speaking, in well over 95% of our trials, we don't require a clinical trial application dossier as the FDA require for the IND and also for a clinical trial application for the EMA.
Australia also has an attractive cashback incentive for all R&D work that's performed here, which Stewart will talk about in the next couple of slides.
Now, as you can see, with what's going on with COVID, I know that there has been an increase in cases in Australia, but to date the top ten clinical sites within Australia are still open for either onsite or remote monitoring. The top ten are based on the number of trials that have gone through the sites over the last three years.
As mentioned, an appealing feature of coming to Australia is the rapid start-up period. For trials run at private sites, this takes approximately six to eight weeks from application, and approximately 12 weeks for a hospital base or public site.
Now, I should note here that clinical trial preparation, and performing of clinical trials in Australia, does not require an open IND and is completely independent of the activities that can be performed in the US in parallel.
Now, you will see from these graphics, that the activities that are done over these six to 12 weeks between the private and the public sites, can in some regard be run in parallel where we do the HREC evaluation and contract negotiations. Regarding the public sites, the Human Research Ethic Committee, or HREC, the typical review takes about two months compared to one month for the private sites. The public sites also require a research government step which typically takes about one month, which isn't required for the private sites.
Now, following approval by HREC, or the Ethics Committee, the TGA is just simply notified. They do no evaluation, it's a simple electronic form which takes about three days to process. We normally allow ten days before we commence the trial.
Now, listed at the bottom of this slide are a number of documents that are required for clinical trials run in Australia and the USA. The main difference between the two jurisdictions is, in Australia, as mentioned, we don't require the clinical trial application dossier. Now, that not only saves time in the preparation of all the documentation, it also means that the amount of CMC information required to be presented is reduced. In fact, in Australia, the only CMC information that's evaluated is that which is presented in the investigator brochure.
That doesn't mean that we don't work to the same international quality standards as the US and Europe, we work to ICH. We're actually an observer of ICH. But it does mean that you will save time and the CMC requirements aren't as great. Certainly, with safety, the expectation is that the safety data is equivalent to that which would be acceptable in the US and Europe.
I think if we could pass this slide on to Stewart Walker.
Stewart Walker: Thank you so much Dr Flight, I appreciate it, and thank you everybody for joining. I'm grateful for the opportunity to talk with you. I am Stewart Walker and I work for CoSec Corporate Services. CoSec is a Melbourne-based company with offices around Australia, but also an office here where I am in San Francisco and an office in London as well.
I'm here to talk about the research and development incentive program in Australia. Now it can be a really significant benefit, but as you just heard, it really should be considered, I think, much more of a cherry on top of the already really significant reasons to do trials in Australia, from the speed with which you can get it approved, to the quality of the work, and also just the savings off the bat with regard to exchange rate etc, so that's that.
There are a lot of details with regard to this program. I'm going to, in the interest of time, focus on really just three primary factors. Those are going to be what is the program, a little history about it, how do you get yourself eligible for it, and then what should be your cost, which activities within Australia will be eligible for this program.
A little bit of background. The program itself, the R&D incentive program, is 20 plus years old. It's been in place since they started it when the manufacturing sector had declined a little bit and they were really looking to stimulate, the Australian Government was looking to stimulate the innovation economy if you will, and particularly life sciences. I mean the program's been a great success, however at the outset it didn't bring a whole lot of foreign investment in, because when they first put the program in place, there was only a tax concession. Which means you had to have revenue tax liability in Australia in order to take advantage of it and put your R&D costs against that liability. For start-up companies, life science companies from overseas that don't have any revenue in Australia yet, it was basically a worthless program. Which is one of the reasons why, about nine years ago, the government added a cash component to this program, and now that cash component is available to small companies.
There are two different aspects to this program, and what is a small company really is the crux of, whether or not you're eligible for it, is based on your annual revenue. If you have, as you can see from the slide, over AU$20 million of annual revenue, if revenue exceeds that threshold then you are eligible for the tax concession. You can take 38.5% of your R&D expenditure and put it against any tax liability you either have now, or you might have in the future, in Australia.
However, if you are under $20 million of annual revenue, you qualify as small and you are eligible for the cash component of rebate of this program. Which means you can get 43.5 cents back on every dollar you spend in Australia, and you will get that back as a rebate at the end of your fiscal year.
Now, who is eligible, or rather how do you get yourself eligible? It really boils down to this. There's a lot of reasons to do work in Australia, and you can contract with Novotech for instance directly from your parent company and take advantage of all those benefits. But in order to take advantage of the R&D incentive, you need to have an Australian entity. It has to be an Australian entity that signs a contract with Novotech, and receives and pays the invoices, and at the end of each year, submits the claim and gets that money back.
Now, it's fairly easy to get an entity set up. It can be a wholly owned subsidiary. It's going to be what they call a proprietary limited, a Pty Ltd. It's a wholly owned subsidiary of your parent company. It can be foreign-owned. There are really minimal capital requirements, there are no hiring requirements, and you certainly do not need brick and mortar. It's going to be more or less a virtual entity. Importantly, it only takes three to five, three to four weeks to get that entity from zero to fully operational. You'll open an Australian subsidiary which will in turn contract with your vendors in Australia.
Now, to the third point, which of your activities, which of your expenditures in Australia, will be eligible to claim and get that money back? Basically, with regard to clinical trials, the answer is, briefly put, everything, but to put it a little bit more detailed, there are basically two components to your expenditures in Australia. One is considered the core R&D activity. That is going to be your experiment, the trial you're actually running. It's fairly straightforward.
However, very importantly, is they also have the category of supporting R&D activities. Now what that is, is any activity, provided it's done in Australia, that is either directly related to, or in support of, your core activity, those costs will also be eligible. That includes things like database management, clinical trial insurance, biostatistical analysis, recruitment costs, etc, etc. All those costs that you incur within Australia in support of your trial will also be claimable. That means, at the end of each fiscal year, as we submit your income tax return, we can also prepare and submit the claim. Now, the claim is processed at two different departments, one, AusIndustry, and then over to the Tax Office. But once it's processed, typically within the first three to five months of the following year, into your Australian bank account comes that cash rebate which you can then spend obviously on ongoing activities in Australia, or you'll be able to repatriate it.
I know I moved through a lot of details fairly quickly. I'm happy to answer any questions, and you're welcome to reach out to me directly any time, but I do appreciate the opportunity and at this point I'll shift it over Dr Jeff Loutit.
Dr Jeff Loutit: Great, thanks very much. I'm Jeff Loutit, Chief Medical Officer at Qpex Biopharma based in San Diego. We are a small start-up company, started up just over, or just under a couple of years ago with 20 employees. It's interesting, what Simone and Stewart just said is, really reflects my experience over the last six or seven years. We've actually done four phase 1 studies in Australia, and about to start-up number 5, 6 and 7. But we went originally into Australia because of the tax credit, and then recognised both the speed and the quality of data generated from the sites and from the CROs, so we've continued to run most of our phase 1 studies in Australia.
Our focus is on anti-infectives, particularly gram-negative organisms and resistant gram-negative organisms. As Simone mentioned, these phase 1 units don't necessarily have to have expertise in your therapeutic area, but they obviously need to have expertise in running phase 1 studies, which they have.
On the right-hand side of the slide is just an example of a recent study that we did late last year. As I said, this is just one of many, and just speaks to the speed, and I can talk to the quality of the data produced by both, from our point of view, Novotech and the phase 1 unit that we use.
I'll stop there and be happy to answer questions when it gets onto the question session, and hand it over to Paul, I think.
Dr Paul Griffin: Hi, thank you, and thank you for the opportunity to be part of this really exciting presentation. I'm an Investigator. I'm the Principal Investigator at Nucleus Network's Queensland site and the Medical Director there. Nucleus Network is a specialised phase 1 clinical trials company. They're the largest in Australia. We came to be from two separate clinical trial companies. Nucleus Network arose in Victoria in about 2003, and we had Q-Pharm here in Brisbane that had been around for a similar time. Nucleus Network acquired Q-Pharm last year, and I've been a part of Q-Pharm, and now Nucleus, for around 11 years. As you can see by the top box there, we are quite a large clinical trials company, with around 140 beds in our Melbourne and Brisbane sites. One of the benefits of our unit is, well both of them in fact, is that they're co-located with large clinical, as well as academic, precincts. In Victoria, it's the Alfred Hospital and the Baker Diabetes and Heart Institute, and up here in Queensland, it's our biggest hospital, the Royal Brisbane and Women's Hospital, as well as two large academic facilities, University of Queensland and the Queensland Institute of Medical Research. That puts us in a good physical location to be able to do this work well.
We've done, I think it's over 800 phase 1 clinical trials over the time, and given my role, I'm an Infectious Diseases Physician by training. My area of expertise has become mostly vaccine studies, as well as anti-infectives, so that's obviously a key focus of ours right now is the number of COVID-19 related trials. We've commenced two vaccine trials, with the results of one released yesterday. The other one's ongoing, and we are in the final stages of preparation for our third vaccine study and are in discussion around a number of others as well.
On the bottom left there, you can see that the speed in which we're able to start-up clinical trials, partly through some of those regulatory issues that we've already heard discussed, and also our large team of specialist people that can handle all elements of the trial start-up process to get it to happen quite quickly. These timelines have been somewhat contracted in the context of COVID as well, so able to start-up some of those COVID studies in even shorter time than that.
As you can see on the right, we have experience with big pharma as well as small biotechs, and even some academic institutions, some of them listed there. We've also done some work for Moderna, who were the first to take a COVID vaccine into clinical trials.
We've got a long success of doing a large range of clinical trials in all therapeutic areas. My specialty is vaccines, but as I say, we operate in all therapeutic areas with a lot of expertise and experience. I'll hand back to the Chair now. Thank you.
Arsalan Arif: Thank you. Thanks to the panel over there. I learned a lot. We've got quite a bit of time here for the Q&A which is great. I have a list of questions here. I'm going to direct them to each panellist here, but I really encourage anyone else with their expertise to come in to really make it a panel discussion, an interactive discussion. I think it's going to be really great for the audience. We do have some good questions over here.
But the first question, I'm going to pose it to Jeff. How does the process of involving sites in Australia differ from North America? Are there any unique challenges that are faced by sponsors in this region?
Dr Jeff Loutit: Well I think, so it's a great question. There are some differences from a clinical trial point of view. I think the biggest one, is the fact that the phase 1 sites and the CROs are usually separate entities. Many of the phase 1 sites in the United States are an all-in-one commodity. You can get your data management stats etc, along with your patient care clinical trial, all done by the same group. In Australia, you have to have the phase 1 site and you have a CRO with it. The good thing is, that the CROs we've worked with, including Novotech, obviously have huge experience with all those phase 1 units, and really their relationship is seamless. But one does have to put together two different contracts at the beginning of a trial to set the trial up.
I think the other big issue that comes up is just time zones. Obviously, Australia is a long way from the US, but because of the time zones working the way they are, it's actually often only nearly a full 24 hours, or between 18 and 21-hours’ difference, so actually the time zones, even though it's a day off, match up very well. Certainly, from the West Coast, we've not found that to be a problem at all.
I think the challenges are related, it's already been mentioned by Stewart, if you're looking for the tax rebate, one obviously has to have a local entity, and one has to be able to set that up. Then if you're not, even if you're not doing the, looking for the tax rebate, one still needs to have a local sponsor, and usually the CRO can take that role as a local sponsor. Not a lot of differences, and we've been able to, as I said, it's just become part and parcel of what we do.
Arsalan Arif: Anyone have anything to add to that about involving sites? Any differences between that and North America? For the panel here?
I'm going to move on to the next question here. This is for Dr Simone Flight. How readily are trials conducted in Australia accepted by the FDA and the EMA, I mean the main regulators in Europe and North America? It's a broad question here, but how does the regulatory really fundamentally differ in Australia and the US? Can you answer that?
Dr Simone Flight: Yes sure. Trials performed in Australia are recognised by all regulatory jurisdictions and are performed using the Good Clinical Practice. As I mentioned earlier, Australia is an observer to the International Council for the Harmonisation of Technical Requirements for Pharmaceuticals for Human Use, which is ICH. It's a bit of a mouthful. Coming to Australia for a first-in-human trial to support the opening of an IND, or to eventually be included in a package for an NDA submission or BLA submission. That's a very common strategy for a lot of companies, and I'm sure Jeff and Paul can support that as well.
Dr Jeff Loutit: Yes absolutely, Simone. We've done studies either not under an IND, to talk of the speed piece, but also under the IND and have filed several NDAs with this data. The reason we keep going back is the high quality. We would not continue to do that if we weren't really impressed with the quality of the data.
Arsalan Arif: Well just kind of further along, they're saying what about the regulatory framework for biologics in Australia, but actually the question over here, we'd really like you to focus on perhaps gene therapy products.
Dr Simone Flight: Biologicals in Australia are different to what we would consider to be a biological in the US or Europe, or perhaps anywhere else in the world. Products such as recombinant monoclonal antibodies and viral vaccines are not regulated as biologicals in Australia. They're actually just regulated as therapeutic goods, so as new chemical entities. It's the same route. They typically would go down the CTN route and not need to go down an IND-type process, which we call our Clinical Trial Exemption scheme over in Australia here.
The only products here which are regulated under the Australian biological regulatory framework, we call it products which are derived from human somatic cells. Any germline cells therapy is illegal in Australia, as it is in many places. That really limits biologicals to the kind of CAR-T type cell therapies, which we see quite a few going through. If you do have a biological, or an Australian biological, which is a human somatic cell derived product, depending on the level of manipulation, if it's minimally manipulated and the function of the cell hasn't been changed, then you are likely to be able to go down the CTN route. If it's something like a CAR T-cell where there's been quite a significant amount of manipulation to the cell, then you're more likely to have to apply for a CTX which is, and as I say, very similar to an IND. You can actually use the same dossier. The review process by the TGA, it does take a little bit longer. With an IND you're looking at 30 days. With a CTX it's, at the moment at least, I think I understand it's closer to three months.
If we're moving on to gene therapy products, I guess, and if we're talking about viral vaccines, most of these tend to be genetically modified organisms. These types of products, almost without exception, require review from the Office of the Gene Technology Regulator. This is an office in Australia which sits under the Department of Health, as does our regulatory authority, but they work completely separately. If you're doing any activities with the TGA, you can actually run activities with the Office of the Gene Technology Regulator in parallel.
I guess the main piece of advice is, to identify very early on in your program, what category of genetically modified organism you have. Because the evaluation process for GMOs in Australia is relatively lengthy, and we would advise six months from beginning to end. That would be certainly one of the first things to consider if you have that type of product coming into the country.
Arsalan Arif: Anything to add anyone, or could we move on to, I've got several more questions here. This next question is for Paul Griffin here, and here's the question, I'm going to read it. We're often asked about recruitment potential in Australia given the small population. Can you speak to the challenges behind that, and frankly how does your centre manage to recruit enough patients?
Dr Paul Griffin: We have a multifaceted approach I guess, and yes, while our population is small, I think on the whole we have a subset of our population who are really keen to participate in clinical trials, for a host of different reasons. Fortunately, with the COVID vaccine trials we're running, there's been a lot of altruism which has been really good to see. The way we can make sure we recruit our trials, is by having a recruitment team with a number of different skills that lends itself very much to being able to generate sufficient interest. For example, with one of our COVID-19 vaccines, I believe we had over 4,000 expressions of interest for that study. We look really carefully at all of our recruitment done that we generate in terms of where we're getting subjects from, and where we might have challenges. Collaboratively, as an organisation, we look at overcoming those, so it's something that we can do quite successfully. I guess the other thing about Nucleus Network, is that we have two sites. One in Brisbane, one in Melbourne. I believe that's around seven million or so people across those two sites in terms of the population surrounding them. We move our studies between those two sites depending on a number of different factors. I think having the two sites is a big strength for us, and again using COVID as an example, we've seen the epidemiology of COVID-19 change significantly around our Melbourne site with quite a bit of transmission there. Fortunately, our Queensland site now has become a bit of a focus for the phase 1 trials for COVID-19, because we have COVID very much under control here. I guess it's the flexibility and the capability of having multiple sites, as well as having a really experienced and highly skilled recruitment team. I guess also, our reputation as Australia's largest phase 1 unit, we have a lot of expertise. I'm an Infectious Diseases Physician by training, so that's where I can hopefully apply my expertise to some of the vaccine and anti-infective studies. We have clinical pharmacologists, we have oncologists on staff, so again, I think it's that experience and expertise as well that helps a lot.
Arsalan Arif: Great. I know here in the United States, knowledge of clinical trials and participation in clinical trials is very poor. Not where we needed to be at all, and so to hear that the rate might be higher over there, that is encouraging over there. Here, this next question, the next one's for you too Dr Griffin. We'd like to know the current landscape of COVID-19 vaccine trials in Australia, and if there's a special review process for such applications.
Dr Paul Griffin: I'll start with the second part first. In terms of the review process, for COVID related trials in our country generally, the approval process has become as close to real time as practically possible. Having said that, we still make sure we have sufficient pre-clinical data to support moving any product, including the COVID vaccines, into the clinic. But if that data is there, then we can do things very quickly. There's an obvious reason for that, and the expectations of the sponsors are that this happens quickly, and fortunately we've been able to do that in the COVID-19 related studies that we've commenced.
In terms of the landscape, so we were the first to dose a COVID-19 vaccine in the Southern Hemisphere, I believe, with the Novavax vaccine, and there's been some exciting data that they released yesterday that I refer people to have a look at. We'd actually been involved in the University of Queensland vaccine program since before COVID existed. We were helping them a little bit with a program to respond to a new or novel pathogen, so we'd been working with them for a few years. Fortunately, we got to the stage of taking their vaccine into the clinic around three or four weeks ago. We're in very mature discussions with another vaccine manufacturer, and hopefully we'll have some announcements in the near future there, and in various stages of discussions with a host of other vaccine manufacturers that are producing COVID-19 related vaccines, so it's exciting.
There are two other vaccine studies, I believe, that I'm not involved in, that have commenced in this country. One in South Australia, which is a South Australian vaccine, a very small study, and in Western Australia I believe a US company has also taken their vaccine into phase 1 trials with another phase 1 unit.
Again, reflecting I think what has been presented in this talk from all the presenters, that Australia is a great place to do early phase research, and that's what we're seeing with COVID-19.
Arsalan Arif: That's very exciting. That's very cool. Thank you for that overview.
Dr Jeff Loutit: Arsalan, can I add one comment to that?
Arsalan Arif: Please. Please do.
Dr Jeff Loutit: I think Australia deserves huge praise for how well they've handled the COVID-19 cases. Yes, there are increases in Victoria at the moment, but even despite that, as we looked around, essentially as Simone said, all the phase 1 units are continuing to work and run trials in Australia. That is not the case in the US for instance at the moment, so huge credit to Australia for getting on top of it.
Arsalan Arif: Yes, I concur. Here the next question, we've got one on the R&D incentive program. I think that one's going to be for Stewart. What's the timeline and process of setting up that Australian subsidiary that you were talking about earlier?
Stewart Walker: That's an important question. I mentioned briefly that it's fairly straightforward, it's a quick process. The fact is that, for instance, our clients who are going to be doing trials in Australia, what I will say is this. You don't need to set up a subsidiary in Australia until you've made some decisions. You're going to do work in Australia, you've chosen which CRO. You're going to work with Novotech, you've decided to work with Nucleus. Now you've got to sign some contracts so that you can actually start commencing that work. It only takes us three or four weeks to go from zero to fully operational with an Australian subsidiary. We do need some documentation from you, and it's not easy to get, especially sometimes these days to get a notarised document can be kind of a hassle. But for the most part, it really does take only about a month to get set up. What we tell folks is, I'm happy to talk with you and help you all the way through, but you don't engage a company like CoSec until you're about a month away from signing a contract in Australia. At which point, we can create a subsidiary and then it will be that sub that's on paper on that contract with your
[inaudible]. That's the short answer. Obviously, all the documentation and details, and that time of getting it from our clients, is built into what I've just said with regard to three or four weeks.
Arsalan Arif: Here I've got the next question, it's for you Jeff. From a sponsor's perspective, what are the top features that have drawn you into doing trials in Asia?
Dr Jeff Loutit: Initially it was money. A small start-up company looking for that tax rebate. Setting up that group subsidiary in Australia. But we went through the process and we were able to get it done. Now with our company, we were lucky enough to have WADA funding, and so we can't go that route looking for a tax credit from the Australian government. Now we just need a local sponsor, and it's all about steady quality, making sure that you have a great relationship with that PI at the site. I've been so impressed with the, I'm speaking to Paul here now, so impressed with the quality of the medical monitors at the sites and developing that strong relationship. Quality and speed are the two components that really draw us there now.
Arsalan Arif: If I heard you right, it was first money, but then once you got there it was quality and speed after all.
Dr Jeff Loutit: Yes. Now the other thing I should just say, so I'm a New Zealander, and as you know New Zealanders have friendly rivalry with Australians, so I've always said to my teams I'm always happy to experiment on Australians. Maybe that's the fourth reason.
Arsalan Arif: That's a good one.
Dr Simone Flight: As a fellow New Zealander, I agree.
Dr Jeff Loutit: Uh-oh Paul, you're outnumbered, I'm sorry.
Dr Paul Griffin: Scary.
Arsalan Arif: While you were giving that answer Jeff, I had another question pop up for you Stewart, and it's again about the R&D program. Once that subsidiary is set up, what are the options available for it? That's what the question says.
Stewart Walker: I think what you mean is basically, you've set up a subsidiary, maybe you've had a first-in-human trial, or an early phases trial, and then you've come to the end of it. You've got your data and maybe you don't have any further activities in Australia. What you can do at that point is, you've got a subsidiary down there, it's been set up. You do have some options. What a lot of our clients are doing, as Dr Loutit said, might do a trial on one particular candidate, and then find that your work in Australia's terrific and they've got another candidate coming down the line, or maybe they could even do some sites on a phase 2 down there. What can happen with a lot of our clients is, they'll do an early phase or a phase 1, and then they'll put their subsidiary at the end of those activities into dormancy. Basically, that means like the cost of keeping it up and running is minimal. It can just sit in dormancy until such time as you need it, and you've got an additional trial or another candidate you're going to be working on, and then we can just spin up your Australian subsidiary and then use that as the sponsor and to make the claim on that R&D incentive. That's one option. Another one is of course like if you're done and you have no further activities down in Australia, we do have some clients who will at that point put their subsidiary into dormancy anyway and just leave it sit down there until such time as perhaps, maybe they have an exit event or something like that and there's some real cause to go through the process of shutting it down. But you can really, at any point, shut it down. It does take a little while; it takes three or four months. There's a $3,000 cost to shutting it down with regard to fees to the government etc, but it's fairly straightforward and we do have that option of closing shop and just going home.
Arsalan Arif: Let's say that you did do this though, are there, let's talk about some sticky issues, what about IP considerations? Are there anything like that that the company should be aware of if they're going to set that up?
Stewart Walker: Yes absolutely. Yes, that's a really important question, and obviously that's where a lot of details come in, and I don't want to take too much time but I'll put it this way. The most important thing that companies will want to ask is about their IP. Both the base IP that's getting used in the trial, but also what they called the developed IP, or the DIP. You have some options on how to treat that, but typically our clients will select a model for the structure between their parent company and their Australian subsidiary. Wherein, the base IP is licensed to the subsidiary for the express purpose of running the trial, but no legal title is sent down there. Also, we're able to structure it such that the developed IP, the legal title to that developed IP, also vests back with the parent company. Now it will be kind of automatically re-licensed to the subsidiary for ongoing trials, but the developed IP and the base IP can remain with the parent company. There are some other considerations with regard to commercialisation rights and whatnot. Now that can take a few minutes. I'm more than happy to talk with folks maybe afterwards about that, but really importantly that IP basically remains at home.
Arsalan Arif: Now, I've got a question, and here's my question for the whole panel here. Now, I'm going to ask as an American, and we can keep the political stuff out of it, but it really, well let's just talk about the sites. It seems like the sites in Australia and Asia have adapted well to COVID with minimal disruption. Let's talk about sites, and can the panel talk about any kind of reasons that they've adapted well to that? Anything that the audience can take, any kind of titbits when running sites for that?
Dr Jeff Loutit: Go ahead Paul, please.
Dr Paul Griffin: No Jeff, please.
Dr Jeff Loutit: Well, maybe you should respond because I'm an American along with Arsalan at this point. But I think it's Australia and New Zealand have really done a great job. It's obviously beneficial to be an island that you have to get to, via either a boat or plane. If you can keep your numbers down, then you can do contact tracing right, and that's really been, and Paul you can agree or disagree, but to me that's really been how that they've been able to get on top of it. Obviously, they're getting their tests done quickly, getting the results back, able to do the contact tracing, and then track down those people. I think once you get to that point, and you can keep your borders intact, I think you're in good shape. Now there is variability across the States in Australia, but Paul correct me if I'm wrong, but it's my understanding that, for instance, the border between Victoria and South Australia, or ACT or New South Wales, is shut at the moment so people can't go back and forth outside the State.
Dr Paul Griffin: Yes, thanks. I mean that's a really good summary. You're right, we've got excellent control in this country overall. We've seen a little bit of a bump in the road with Victoria, and I guess that's one of the things that makes it fortunate for us to have two sites. We can now pivot a little bit and have phase 1 trials as a real focus, speaking with regards to COVID of our Brisbane site. Then we've got, I guess, capabilities in Victoria to look at later phase studies, given that there is significant community transmission. Yes, I think our epidemiology and how well we've handled it in this country has been a huge strength generally. Then I think, for example, speaking from a unit perspective, we were very aggressive in implementing a very rigorous infection control program within our site that includes pre-screening of staff and volunteers. We included some remote monitoring as well the capability to assess subjects remotely into a lot of our clinical trials. We're doing temperature screening; staff are wearing masks. We've got a really rigorous internal policy to make sure that we protect all of our staff so we can keep staffing our clinical trials, and also protect all of our volunteers so that we can keep running the important work that we're doing throughout COVID.
Arsalan Arif: Excellent. Excellent. Here I am sitting in the State of Kansas where our State legislature has banned the Governor from doing contact tracing, so bless you all over there. Let me ask you, we've been talking a lot about these early phase trials, doing them in Australia. Is it possible to stay in Australia and Asia for the later phase studies? What does the panel have to say about that?
Dr Jeff Loutit: We have, over the years, conducted several global studies and it included sites in Australia and New Zealand with good success. I think they're unlinked obviously to the phase 1 sites that we're discussing here, but Novotech for instance is Asia-Pacific wide. As a CRO, often we've had, instead of one global CRO, regional CROs, and that's worked out well for us.
Dr Paul Griffin: I can maybe add to that. I think Australia's also an excellent place for later phase studies. Sometimes earlier phase units like Nucleus can help with the phase 2 and even the phase 3 studies, but then we have a lot of collaboration with a lot of academic and clinical institutes. Both of our sites are co-located with both of those, so the ability to crossover and adapt clinical sites to later phase trials is something that we do fairly readily. I think the capability generally for that in Australia is good too.
Arsalan Arif: We have a quick question here on regulatory pathways, I think this one's going to be for you Dr Simone Flight. You mentioned CTN and CTX regulatory pathways. Which one is most frequently used?
Dr Simone Flight: By far the CTN pathway. As I mentioned, only what we call a Class 4 biological really has to go through the CTX pathway, and that's a human somatic cell that's had major manipulation such as the CAR T-cell in T-cell type therapy. I think I did hear a stat, so I'm going to start throwing out numbers which might not be right, but maybe a year ago somebody mentioned that of the last 4,000 trials that were set up, four of them were CTXs, and the other 3,996 were CTNs. That will give you an idea of the TGA don't see these applications very often. I think it's fair to say in the past, they have stated on their website that they have a 50-day review timeline and that doesn't include clock stops.
But in reality, maybe just with the experience of the team at the TGA, they tended to look at these CTX applications as a marketing application, so were asking for a lot of data. Much more than you would expect for an IND. I think that has improved over the recent years, especially now they are probably seeing three or four of them a year.
Arsalan Arif: Thank you for that. Here we have another question pop up, and it's about the R&D cash refund, so again for you Stewart. Maybe you can share some examples of how easy it is to set up the Australian entity to tap this R&D cash refund. I guess that you can't actually talk about specifics or anything like that, but maybe you could walk us through an example of a deal you've done like this.
Stewart Walker: You know what I'll do, is actually we'll talk about a fairly recent example again without sharing the company name. But it was during this, during the COVID era, and a company that had a trial interrupted, an ongoing US trial interrupted, because of COVID and obviously wanted to continue it as quickly as possible and found Australia and wanted to get that cracking. They found a CRO, they found a site, they were ready to go forward, and at that point that they learned about the R&D incentive program. They were down the line and ready to move forward and came to us via introduction.
In that circumstance, this is a sort of an unusual case obviously. It's usually not quite so rushed, and usually it's like Dr Loutit's experience, where they know about the money and then they come to Australia. This was a case where what we were able to do is incorporate a subsidiary in Australia. Basically, that means get what they call an Australian Company Number, an ACN, and an Australian company name in two business days. I mean it's quick. But that means that that company, or that entity, can sign a contract and everything can start moving forward, but in those circumstances the CRO, the sites, etc, needed to be a little patient because that entity is not going to be able to receive or pay invoices until we do the rest of the process.
But what we're able to do is then try to move things as quickly as we can. We are of course working with the Tax Office, and it's quicker than the IRS but it's analogous to the IRS, so that process does typically take three or four weeks to get some of the other registrations in place, and obviously opening a bank account, there's really very few ways to hurry that along. But the process can be a little flexible when need be in terms of getting an entity established, and then dealing with the rest of it as necessary thereafter.
That's a, again, somewhat unusual circumstance, but one that just in the last couple of months came up for us, because Australia ended up being a really good place for these folks to do their ongoing trial. Unrelated to COVID, but going to Australia because they couldn't continue it here.
Arsalan Arif: Thank you. Insightful. We keep having questions come up from the audience, so I really thank you for that. [Keep going,] we have just about ten minutes left here and we have several more questions left. I have one here for both Dr Simone Flight and Dr Paul Griffin. What is the share of your work conducted with biotechs, compared with the large pharmas or other type of sponsors? What's the breakdown between the different types of sponsors you work with?
Dr Simone Flight: We probably have different responses to the same question. Within Novotech, so without going into a lot of detail, we have an Institutional Biosafety Committee, and that's probably where we interact with the big pharma, more so than the small biotechs. But I would say by and large, our work which, our CRO work is primarily small biotechs. The larger pharma tend to have their own clinical operations teams.
Dr Paul Griffin: Yes, thank you. It's Paul here. I couldn't give you any figures, and I think it fluctuates depending on what sort of products are in development. We work with small to larger biotechs, big pharma, as well as even some academic institutions, so we have a fairly wide spread of sponsors and across all therapeutic areas. I think we probably focus a little bit more most of the time on the biotech space, but as I say, from time to time, do quite a bit of big pharma work as well. I couldn't give you an accurate figure, but it does fluctuate a little bit depending on the situation.
Arsalan Arif: Well, how about while I have you here Dr Griffin, another question for you. Tell me, here's a question from the audience, what are the most exciting developments that you see in vaccines today?
Dr Paul Griffin: Look, clearly COVID-19's an unprecedented situation, and I'm still amazed at how quickly we've developed so many good vaccine candidates. That's happened in record time and the data that's now coming out of the phase 1 and phase 2 studies is very impressive. Being just a small part of that, or even being an observer of that in fact, is really exciting. Now I'm just really looking forward to those progressing through the phase 2 and phase 3 studies, and hopefully we'll see some vaccines that show some real-world protection in those later phase studies. But as I say, every vaccine technology has been applied to COVID, and we've had some great successes getting them into and through the early phase trials. We've been really excited to be a part of that.
Arsalan Arif: Speaking about vaccines, here's a regulatory question about one, a quick one for you Dr Simone Flight. Are all viral vaccines considered GMOs in Australia? Does that impact the regulatory pathway for viral vaccines?
Dr Simone Flight: Yes, I can probably think of maybe one example where we had a viral vaccine that wasn't a GMO. Generally, if it's been modified using any gene technology techniques, it will be considered a GMO. There are, and I do welcome questions which I can answer personally after this webinar, there's quite a number of considerations as to how they are classified, and therefore how they are regulated, but we have spent many years, Dr Griffin's on our IBC as well, so he's very familiar with all of these products that have been coming through. But yes, generally speaking, the viral vaccines are generally considered GMOs if they've been modified in any way, in which case they need to be evaluated by Office of the Gene Technology Regulator.
Just to add to that, and again in the COVID situation there always has been a little bit on critical path with regard to how quickly we can get studies into Australia. We've recently had a COVID candidate that's a GMO and that they've reviewed that in record time. I think it's all hands-on-deck with COVID, they are happy to, we're reviewing in real time and talking to them on a daily basis.
Arsalan Arif: Thank you. Alright, we have just a couple of minutes left here, so I'm going to try to squeeze in just two questions here. Let's go to you, Dr Jeff Loutit. Have you run trials in Asia as well? Would you consider Asia?
Dr Jeff Loutit: Our focus is on resistant organisms, and so the answer to that therefore is obviously yes, because there's a high percentage of resistant organisms in certain countries in Asia. Not so much Australia and New Zealand, but other countries in Asia. Yes, we have both a lot of interest and some experience in running trials in Asia as well. I haven't done any phase 1 trials outside of Australia or New Zealand though.
Arsalan Arif: Actually, let me pose you the last question for our panel today, and I'm going to pose it to you Dr Jeff Loutit. If you can provide just one or two pieces of advice to biotechs looking at a trial in Australia, what would they be? What would you want to tell yourself before you came to Australia? Can you give us some key advice?
Dr Jeff Loutit: You're asking me, what would I tell my board is probably the right question. For near term I think, first off it's coming up to be summer in Australia and New Zealand, and so highly unlikely there will be a double whammy of both flu and COVID. My expectation is that Australia will continue to do very well controlling COVID and won't have flu cases at the same time. Near term, I would look at Australia and New Zealand as optimal places to consider doing phase 1 studies.
Then longer term, it's all about the end quality. The quality of the data is excellent. We've been able to use it in several of our NDA filings and actually approvals, and so I highly support the use of conducting phase 1 trials in Australia and New Zealand.
Arsalan Arif: Well with that, I think we're going to conclude today's panel. I want to thank everyone for joining us today, the entire audience as well. Thank you for Novotech to bringing yet another great discussion to the Endpoints News audience, I'm really thankful for that. Thank you, Dr Simone Flight. Thank you Dr Jeff Loutit, Stewart Walker, and Dr Paul Griffin. For Endpoints News, I'm Arsalan Arif, and I wish everyone a great rest of their day. Thank you.