Japanese pharma courts Pacific Edge

New Zealand cancer prognostics company Pacific Edge Biotechnology appears close to securing multi-million dollar investments from several big Japanese pharmaceutical companies.

At last Thursday's annual general meeting, chairman Trevor Scott announced Pacific Edge had already signed a heads-of-agreement with one major Japanese company on international marketing rights for the tests, is close to signing with another, and is negotiating with a third.

Pacific Edge's IPO in New Zealand in February 2003 was under-subscribed by about a third, and in May this year it announced a $2.6 million before-tax loss for the year to March 31. Its issue price was NZ25c, and is currently around NZ30c after touching 50c.

Scott told the 20-odd shareholders at the meeting that the company currently had enough funding for 18-24 months at its current cash burn rate of $1.4 million a year. It did not pay a dividend this year.

Scott told the New Zealand Herald newspaper that prospective investments from Japan could secure Pacific Edge's development work for three to four years, and fund development of more oncology tests. Scott also raised the possibility of a cash issue or share placement in the near future.

CEO David Darling told Australian Biotechnology News the company had already identified protein markers of early-stage gastric, colorectal, endometrial and bladder cancers, and is searching for markers for melanoma, prostate, and cervical cancers.

The deals are not yet done, but Darling said the Japanese companies were most interested in Pacific Edge's early-phase diagnostic for gastric cancer.

Gastric cancer ranks second among cancer-caused deaths in Japan. In a population of 37 million, there are currently 132,000 patients with gastric cancer, and Darling said that with nearly one in two Japanese now aged 40-plus, the incidence is predicted to rise steadily. A diet high in pickled foods is a key factor -- and the national passion for pickled foods also makes gastric cancer a major killer in Korea, another potentially lucrative market for the Pacific Edge prognostic/diagnostic.

For the US and Europe, the hot item in Pacific Edge's pipeline is an early test for colorectal cancer, which kills 57,000 Americans a year.

The company, based near the University of Otago campus in Dunedin, has developed an extensive oncology database to correlate clinical information on cancer progression with gene-expression array data from tumour biopsies.

In addition to biopsies from NZ patients, the company also receives tumour samples from collaborating university research groups in Japan, Korea and Italy.

"We do our own gene expression arrays, looking for genes that are up-regulated or down-regulated at different phases of tumour development," Darling said. "We're looking both for tumour- and serum-expressed protein markers of early-stage cancers."

He said clinical practice was swinging towards early detection of cancer, especially in the US. With colorectal cancers, the survival rate was 90 per cent if the primary cancer was detected before it metastasised.

Darling said although clinical tests would be initially be based on single protein markers, the way of the future would be to test for multiple proteins associated with different phases of cancer.

"We've got outstanding data showing that when you identify two or more phase-dependent protein markers, there is a strong probability they will combine into a highly efficacious diagnostic. The challenge is to get regulatory acceptance of multiple-protein diagnostics."