Commercialisation: When institutes go to market

Advances in techniques for growing neurons, stem cell research, genetics, proteomics and massively improved capabilities in imaging are opening up previously undreamed-of avenues to treat sufferers of everything from epilepsy, stroke, chronic pain, multiple sclerosis, paralysis and psychosis.

Three years ago, sensing what was occurring, eminent Australian neuroscientist Prof Edward Byrne had a vision of a cooperative, not-for-profit community of neuroscience research centres and scientists from Victoria that would present some of Australia's best work on the spine and brain to organisations throughout the world.

A meeting of equally formidable Victorians in the world of neuroscience was quickly arranged at Byrne's office, at the Neuromuscular Research Institute at Melbourne's St Vincent's Hospital, where the initial blueprint for what three years later became Neurosciences Victoria (NSV) was drafted. The idea, according to CEO Assoc Prof William Hart, was to create something of a community uniting commercial and non-commercial organisations interested in neuroscience research.

"New breakthroughs in technology such as magnetic resonance imaging (MRI) has meant that the brain has been able to be studied while it is working," Hart says. "The bottom line is to try and keep our eye on new treatments for diseases and the only way this happens is through collaborating with research and commercialisation groups."

Hart was persuaded to join NSV some 12 months after its conception, having first discussed the idea with Byrne during his time as a senior bureaucrat within the Victorian state health department. Now he leads an umbrella organisation serving the merged interests of neuroscience research groups within Monash University, the University of Melbourne, the Howard Florey Institute and the National Stroke Research Institute.

All have earned international kudos for their respective contributions to the world of neuroscience and all have helped to put more than $60 million in the bank for further R&D, with that amount expected to grow fast. According to Hart, "it is the way in which the respective research groups were brought together and the careful legal structure of the group which marks it as such a unique organisation in Australia." And Hart says it took several months of negotiating with legal representatives before the groups were able to agree on the structure of the group..

Of key concern to all involved was ensuring that rights to intellectual property were properly protected, while of course commercial organisations needed assurances that their involvement or contributions to the research would not see them later involved in litigation.

Hopefully, Hart says, the mix is now right. Proof of the pudding, he adds, is in the degree of interest NSV has managed to garner from major international pharmas and biotech groups.

Hart and his executive team recently returned from Berlin, where the company met with German pharmaceuticals giant Schering to iron out details of a recently sealed agreement which will see the German group inject up to $25 million into NSV.Under the terms of the agreement, Schering will provide funding for 30 new scientists to be employed to work in Victoria on a portfolio of diseases including stroke, multiple sclerosis, Alzheimer's disease, Parkinson's disease and amyotrophic lateral sclerosis.

The scientists will be based at the University of Melbourne, Monash University, the Austin Hospital's National Stroke Research Institute, and at the Howard Florey Institute. The focus of the research will be twofold, according to Hart, and will include discovery projects looking for drug targets, as well as developing and using disease models to test drug candidates.

More recently, Hart brokered an agreement with Nissho Iwai, one of Japan's leading multi-industrial giants, which will see the company also invest in NSV as part of its new charter to enter the drug development space. One of the surprising things about Nissho Iwai, Hart says, was the speed with which the company agreed to do business: "The deal was originally made possible by my undertaking a conference in Japan and in less than six months we had signed an agreement -- the quality of science here was immediately acknowledged."

NSV is in negotiations three international pharma players and two local biotech companies, some of whom Hart is confident will come on board to access research data or the group's state-of-the-art technology platforms.

NSV provides for other organisations to invest in a number of related projects thereby allowing better management of their investment portfolios. This Hart says, has struck a chord with commercial groups who are attracted by the prospect of being able to distribute risk rather than focus on the one IP development opportunity. "All of the work that is done is defined on a project-by-project basis with each particular area of research clearly defined," he says. "This means that scientists working in several different institutions can collaborate, providing their respective shares in the project are clearly spelt out."

For instance, he says, Institute A may own 50 per cent of proceeds -- the access to IP developed or commercial results of IP are pre-determined according to the relative contribution made by any given research group or commercial entity. "The licence to the IP is granted to NSV in a 'sub-licensable' form so that NSV can take that licence and trade on it."

Companies pay an original sum to inspect new data which is the intellectual property of the member research groups. "The parties know up-front who owns what in terms of commercial proceeds," Hart says. NSV states in its 2001/02 annual report: "The risks of investing in early-stage research are mitigated. Research projects funded by NSV are subject to a rigorous assessment of scientific and commercial potential by experts inneuroscience and in the field of biotechnology commercialisation."

Critical state

Hart admits that there exist strong reservations overseas about Australia's state-oriented approach to biotech development but that NSV, through the formation of the national centre, expects to transcend that barrier. "The feedback is that all areas of scientific endeavour in Australia are more fragmented than they should be," he says. "But I think we have invented an organisational structure that doesn't exist anywhere else, We are earning wide praise overseas."

One of NSV's biggest success stories has been the formation of the National Neuroscience Facility (NNF), following the award of a Commonwealth government Major National Research Facilities (MNRF) grant. NSV is the founding member of a new, not-for-profit company, Neurosciences Australia, which will oversee management and operation of the NNF. And already in Australia, research communities concerned with cancer and cardiovascular disease are examining a similar model.

NSV was short-listed, but unsuccessful in receiving Federal government funding to set up a Neurobiotechnology Centre of Excellence, the money going instead to Alan Trounson and his group for the National Stem Cell Centre. But NSV says the deal with Schering alone would allow for the employment of 30 new scientists in Victoria.

The group now enjoys a solid cash position. The first injection came from the Victorian government, which gave NSV $13.34 million. Shortly afterwards the group succeeded in gaining a further $18 million from the MNRF program which paved the way for formation of the NNF. And despite having missed out on centre of excellence funding, "as a result of the very rigorous process involved in submitting that proposal we are contemplating a CRC-type approach instead of biotech centre of excellence," Hart says. He adds that the group is also in negotiations with CSIRO, with which it jointly bid for the centre of excellence grant, to build on their respective efforts.

Core concerns

NSV's core research nodes are based at the La Trobe, Monash and Melbourne Universities and are addressing a broad spectrum of the neuroscience landscape. Major advances in the field of neuroscience, notably the ability to grow neurons, has presented important new possibilities for people suffering neurodegenerative disorders, metal illness or even spinal cord damage, Hart says.

Scientists are now able to identify proteins in damaged areas that arrest growth, leading to the emergence of new drug types which block the stoppers. Stem cell technology, on the other hand, is already forging a new paradigm in approaching the regeneration of neurons in the brain and spinal cord.

It is hoped that research or commercial partnerships in areas such as glial cell disorders may some day lead to better treatments for multiple sclerosis (MS) while the current tools for researching neurodegenerative disorders such as Alzheimer's and Parkinson's disease may bring some relief to sufferers of these conditions.

NSV is also at the cutting-edge of better understanding neural and muscle regeneration, to one day hopefully bring an improved quality of life to paraplegics and quadriplegics.

Research into mental disorders such as schizophrenia and other forms of psychosis is also at an advanced stage, thanks to new high-throughput gene expression screening technologies which will allow easier identification of gene expression during active phases of illness when susceptibility to the illness turns into an active pathological process.

NSV's psychosis research program is headed by Prof David Copolov, director of the Mental Health Research Institute, and Prof Fred Mendelsohn, director of the Howard Florey Institute of Experimental Physiology and Medicine. Its immediate charter is to profile gene expression in the three brain regions thought to hold the key to most psychotic illnesses: the prefrontal cortex, caudate and thalamus.

Bringing together Victoria's leading institutes of neurology, neuroscience and brain research, the NSV Epilepsy Research Program is hoping to identify genes that cause epilepsy, understanding the interaction between environmental factors and these genes, and ultimately developing new drugs that will prevent seizures completely.

A major part of the program involves analysing various forms of inherited epilepsy. In the area of stroke treatment and prevention, NSV is working to develop drugs that promote optimal blood flow to the damaged region in the few hours after stroke when nerve cells are still alive.

Work in the area of cellular neurophysiology, especially electrophysiology, also promises exciting results by allowing researchers to investigate the functions of single cells and to use cells as test systems for the development of drugs and diagnostic assays.

The Integrative Neurosciences Facility Platform provides scientific expertise and infrastructure to assess complex neurobiological systems. By combining expertise in behavioural neurobiology, morphology and functional analysis, the systems biology approach enables the platform to phenotype animals affected by genetic or other manipulations, and to undertake pre-clinical testing of central nervous system therapeutics in animal models.

Key to much of NSV's work, and its ability to attract friends both in Australia and from overseas, is the neurogenomics and neuroproteomics technology platform. Created under the leadership of Prof Colin Masters of the University of Melbourne, these technologies will allow researchers access to specialist, leading-edge technologies which cater for gene discovery, mutation detection, protein identification and structural studies for the examination and profiling of both gene and protein expression and the analysis of protein function.

It is anticipated that recent and anticipated advances in genomics and proteomics will aid the creation of vast databases of information available to commercial and non-commercial groups that have reached agreements with NSV. "There are certainly some important discoveries around the corner," Hart says.

Neuroscience today

Neuroscience research has more to offer the community at large than ever before, Hart believes, especially given the increased incidences of mental disorders such as depression and schizophrenia, while diseases such as Alzheimer's, Parkinson's and multiple sclerosis loom ever larger for baby boomers and their children.

Diseases of the nervous system affect over 40 per cent of Australians admitted to hospital, and more startlingly, that 75 per cent of people will suffer from a condition affecting their brain or mind at some time in their lives. At any one time, one in 15 adults or children will be experiencing a form of brain disorder or mental health problem, equating to 1.25 million Australians, and 400 million people worldwide.

A recently completed Victorian Burden of Disease Study indicates that 47 per cent of all disability results from illness of the brain or mind.

The study concluded that given the 'greying' of the baby boomer population more effective strategies were needed to combat chronic diseases including neurological disorders, or else the potential medical needs of this generation would place enormous economic and social burdens on their children and society.

The cost implications of this statement can be illustrated by using the example of one neurological condition -- Alzheimer's disease. This condition has been diagnosed in approximately four million Americans -- one in every 10 people aged over 65 and one in every two aged over 85. It is projected that unless a cure or prophylaxis can be found, 14 million Americans will develop Alzheimer's by 2050.

Currently the lifetime cost of care for just one person with Alzheimer's is estimated at $US174,000, with overall costs to the nation's healthcare of $US100 billion. Delaying the onset of Alzheimer's by just one year could save the US $9 billion by 2007. These figures can be extrapolated to the Australian population.