Aust CROs tell of boom in clinical trials work

Ruth Beran spoke with Australian contract research organisations and found that there is strong demand for Australian clinical trials, both from within Australia and also from overseas.

It comes as little surprise to Australian contract research organisations (CROs) that Australia was ranked as the number one clinical trial location in The Economist Intelligence Unit's recent benchmarking report.

"Business is looking good," said Nucleus Network CEO Andrew Giddy. "I think the environment in Australia is very conducive for doing studies at the moment, which is very positive."

Giddy pointed out that the benchmarking not only showed that Australia led other countries in average cost per trial and number of recognised trial sites, but also in the percentage of trials conducted on time.

"This is critical -- trials that are delayed and not completed on time can set back the development of a new drug," he said. "The other area in the report that can be seen as encouraging is that Australia still has a relatively low number of trials per capita despite the availability of sites. This suggests that there can be further strong growth in Australian participation in clinical trial activity."

Previously known as Clinical Trials Victoria, Nucleus Network conducts clinical trials through the Centre for Clinical Studies and clinical research consulting through Clinical Trials Consulting. Giddy said that in the three weeks since he had taken his role, he had already seen 15 customers come in to discuss opportunities.

He said that the organisation's 24-bed inpatient clinical unit, which opened 18 months ago, was at its limit through to Christmas and there are lots of enquiries for next year. "We're by no means at capacity," said Giddy, "but the growth is very encouraging at the moment."

Sydney-based CRO Datapharm Australia, is also busy at the moment. "We've got plenty of work on our books and we're busy expanding our staff," said managing director Helen Allars. "We're building some new premises to cater for more growth in staff."

Ric DeGaris, country manager of global CRO Kendle's Australian arm, said Kendle was growing worldwide. "Clients and companies are tending to outsource more -- it's a growing market."

The Institute of Drug Technology (ASX:IDT) has also seen a significant increase in clinical trial demand, particularly over the last couple of years.

"A significant majority of our business comes from overseas clients," said IDT chairman and managing director Graeme Blackman, "although we continue to service local clients -- for example, we're one of the key sites in the CSL flu trial."

Local demand

Novotech's CEO Alek Safarian has seen a steady increase in the CRO's business over the last three or four years, with a significant upswing in the past six months.

"There's no doubt that the business climate here is extremely strong," he said. "We're seeing business coming from various avenues -- a lot from US biotechnology, but also big pharma, as well as European companies."

In particular, demand for CRO services has grown among local clients, Safarian said. "Over the last 12 months we've seen more and more of the biotech companies in Australia getting into phase I or even phase II studies in some cases," he said.

DeGaris said Australia didn't participate much in phase I trials until the biotech boom. Local biotechnology companies find it much easier to conduct phase I trials in Australia than to take them offshore, he said. While this has led to DeGaris seeing more phase I trials recently, Kendle Australia conducts mostly phase IIa and IIb studies.

Giddy said most of Nucleus Network's trials are phase I, with a number of outpatient phase II studies. The trials are in therapeutic areas such dermatology, cardiovascular, virology and some post surgery treatment compounds.

Datapharm conducts many studies in oncology, said Allars, along with some in dermatology and neurology.

Kendle Australia also has a large number of oncology trials, as well as trials in therapeutic areas such as Alzheimer's, depression, psychiatric disorders and cardio-vascular diseases, said DeGaris.

Safarian said most of Novotech's overseas work is coming from the US, but also some European countries such as the UK and Germany.

IDT is seeing a similar trend, as well as a long history of working with Japanese clients, said Blackman. Up to 70 per cent of Nucleus Network's clinical trial work is coming from overseas, predominantly from the US, said Giddy. There is also some European interest as well as one or two customers from Asia.

Reasonable cost

DeGaris said about 30 per cent of Kendle Australia's revenue was generated by sending invoices offshore. Overseas clients would come to Australia, he said, either because a therapeutic area is prevalent here, or "they know that the quality of the work is done here at a reasonable cost".

However, while he believes the benchmarking report is a "very useful document" that he will use internally within Kendle, he said that the ability to attract studies to Australia depends on the client and in many instances the client has already "made up their mind" as to where they want to conduct trials.

Blackman said local CEOs and managing directors of large international companies would be able to use the report as "some good ammunition to put a case to head office".

Giddy said Australia had always been a great place to do clinical studies. "That goes back quite a long way," said Giddy, who previously worked at Roche Pharmaceuticals, where one of his roles was to win studies into Australia internally from headquarters. "The regulatory advantage and the level of qualified and motivated investigators in Australia was a real advantage over the US and Europe where they struggled with timelines and patient populations and adequately qualified investigators," he said.

Allars said one of the particularly good features about working in Australia is our "excellent researchers and doctors".

"We've got some good doctor networks and we've obviously got a burgeoning biotech industry," she said. "A lot of the new work that we're getting is from biotech companies doing very early phase studies."

However, while the report ranks Australia highly in terms of its skilled workforce, Allars said it was often hard to find the most appropriately trained people. "We're looking for biostatisticians, programmers in SAS and data management type people, and they're not always that easy to find," she said.

DeGaris said he wasn't surprised that the ratio of highly skilled workers per capita in Australia was high -- many baby boomers studied for their higher degrees when tertiary education was free. "It will be interesting to see it going forward with fully-paid university courses," he said.

Expansion plans

Many local CROs are looking to expand. "We're certainly thinking about options," said Giddy, either by increasing Nucleus Network's own unit or with partners in Melbourne or other states.

"We've just opened our San Diego office," said Safarian. "We opened a Brisbane office in October and the company's existing offices are expanding quite rapidly."

Blackman said IDT's CMAX division continued to grow, and had recently opened its Melbourne branch. With people located in each state, as well as in Sydney, Datapharm is also considering setting up offices interstate and possibly overseas, in countries such as Singapore or China. "China has a disadvantage in that it has a very slow regulatory system -- it can take nearly 12 months to get a trial approved up there," Allars said.

An industry-friendly regulatory environment is one of Australia's competitive advantages in the clinical research area.

"The fact that we can commence studies in Australia without needing to file an investigational new drug application, as is required in the US, has helped research in Australia for a number of years" said Giddy.

Blackman agrees. "We wouldn't want to see drastic changes to the regulatory environment," he said.

Another reason for the increase in demand for clinical trial services may be the levels of venture capital in Australia.

"Some of the venture capital has increased," said Giddy. "It's giving a bit more impetus to some of the local companies and also the interest from overseas."