NZ's Neuren eyes Australian capital markets

New Zealand biotechnology company Neuren Pharmaceuticals is evaluating possible options in Australia for raising capital, including private equity and an IPO on the ASX.

The company, which was formed by the merger earlier this year of two smaller companies, NeuronZ and EndocrinZ, has a number of projects in its portfolio, focused on two areas, neuroprotection, and metabolism and cancer, and has five compound families and 67 patents.

It recently completed its first Phase I clinical trial for a tripeptide, Glypromate, derived from IGF-1, which shows potential as a neuroprotective treatment for acute brain injuries as well as chronic neurodegenerative diseases. Currently there are no drugs available to treat acute brain injuries, and few that are effective for chronic indications.

With its partners at Duke University in the US, Neuren plans to file an IND in the next few months to test the drug in a Phase II clinical trial to evaluate its use as a treatment for post-operative cognitive decline following coronary artery bypass surgery.

"It's a simpler model than stroke, and there is a large market and significant unmet medical need," said Neuren's chief medical officer Doug Wilson, a former senior VP at Boehringer Ingelheim.

Clinical trials for a second indication -- traumatic brain injury -- using an analogue of glypromate called NNZ2566, are also likely to commence with the support of the Walter Reed Army Institute of Research in the US, which has been supporting the development.

Neuren has also developed other classes of neuroprotective compounds, which are being evaluated for potential use. These include a unique class of peptides, the neuronal regeneration peptides -- a unique gene family able to stimulate neuronal growth and promote neural stem cell proliferation, migration and differentiation.

On the metabolism and cancer side, the company is focused on growth hormone, and potential uses of antagonists and variants in treating metabolic syndrome and growth hormone autocrine dependent tumours, which have been implicated in some breast cancers.

According to CEO David Clarke, the company is pursuing a three-fold strategy. Its plan is to move compounds into clinical trials as fast as possible, it has back up compounds and flexibility and it is developing strong partnerships at an early stage.

"We have no intention of going to Phase III ourselves," he said. "You have to be realistic with Australian and New Zealand biotechnology -- in reality, you need some international credibility."

That's one thing the company does not appear to lack -- it has developed partnerships with Duke University, the Walter Reed Army Institute of Research, University of Houston, Pfizer, and Australia's Metabolic Pharmaceuticals (ASX:MBP) and IMB.com.

In addition, it has a substantial relationship with the Liggins Institute, NZ's biggest medical research institute, associated with the University of Auckland. The company has space in the same building and contracts staff and facilities as required, and its chief scientific officer Prof Peter Gluckman, is the foundation director of the institute.

Significantly, Neuren has the rights to all future IP in the CNS and metabolism fields from the institute.

Clarke said the company is looking at Australia for raising the capital it needs to move its portfolio into the clinic because of the depth of the market, both in private equity and public markets, and because Australian investors are less risk-averse than their counterparts in New Zealand. "There are opportunities for private equity in New Zealand, but not enough, so we're looking overseas," he said. "Australian and New Zealand securities law are closely aligned and there are just more opportunities in the Australian biotech industry."

The company brings in some revenue, about AUD$2.5 million annually, from contract research, but its burn rate is expected to increase from its current level of $250,000 per month as it gears up its clinical trials.