Adelaide's VivoPharm revelling in the rat race

Dr Ralf Brandt's company VivoPharm has been in profit virtually since it opened for business 15 months ago in Bio Innovation SA's Thebarton biotech breeder precinct in Adelaide, despite a monthly mouse bill that ranges between $15,000 and $25,000.

VivoPharm has already outgrown its Thebarton humidicrib and will soon move to new premises in North Terrace, near the University of Adelaide.

Brandt, VivoPharm's founder, MD and CEO, saw an unoccupied niche in the Australian market, and went for it. "Our major focus is profiling and testing the activity and efficacy of drugs in in vivo models, to give various levels of clinical predictability," he said.

Anti-cancer molecules that show activity in cell culture systems are tested against subcutaneous tumours in nude mice to measure their activity, and the most promising are then tested against injected tumours in organs like the breast or prostate gland.

Brandt, formerly head of cell biology with Thebarton co-tenant Bionomics, is testing a number of compounds from big German company Novartis, in mouse models. He has other agreements with Canada's LymphoSign and two Australian biopharmas that also preferred to outsource their in vivo drug testing. About 50 per cent of VivoPharm's work comes from overseas.

Novartis leapt at Brandt's offer -- VivoPharm was 20 to 30 per cent cheaper than its US and European rivals, even with the Australian dollar's rise against the Euro and US dollar.

After an initial delay while its contracts with rival testing companies overseas ran their course, Novartis signed a five-year umbrella agreement with VivoPharm, providing a secure base for its business expansion.

Brandt, who has worked in the field for years, is now travelling around Australia marketing VivoPharm's services to local biotechs. "We're growing rapidly -- the market is very good, because there's no local competition," he said.

He said only major pharmaceutical companied has the knowledge and capacity to run their own testing programs, but some preferred to outsource the work. Small, new biotechs lacked either the facilities, or the knowledge, so VivoPharm is winning contracts at both the big and little end of town, he said.

Brandt said the company's strength was its ability to provide comprehensive advice to clients, especially small biotechs, on organising pre-clinical studies and making the successful transition to Phase I trials.

He is revelling in the rat race. The company's demand for nude mice has already outstripped the production capacity of its two suppliers, the University of Adelaide Medical School's animal facility and Perth's Animal Resources Centre. It sources its standard tumour cell lines from the US. Revenue for the July-September quarter this year was AUD$240,000, and VivoPharm's turnover target for the year ending June 2005 is $2 million. It hopes to double that figure within three years.