Stakes high for Metabolic dose trial: Scollay

Dr Roland Scollay, CEO-in-waiting for Melbourne biotech Metabolic Pharmaceuticals (ASX:MBP) believes a new dose-ranging trial of Metabolic's anti-obesity drug AOD9604 will confirm its promise as "a big one".

Scollay will move into the captain's chair vacated by startup CEO Chris Belyea next Monday. Belyea becomes the company's Chief Scientific Officer, more than six months after flagging his preference for the senior research role.

Scollay has been on the Metabolic Board since 2003, whilst also acting as director of commercialisation for the Monash University's Medical Faculty.

Despite a newspaper report linking his "resignation" to the Phase 2 trial result, Belyea says he indicated his preference for a role in research to his Metabolic colleagues early in 2004.

Scollay, who joined the Metabolic board in 2003, also comes from a research background. He worked at a the Walter and Eliza Hall Institute for Medical Research before moving overseas and serving in senior executive roles with several US biotech companies. He was on the research management board of life-science giant Novartis for five years.

He described the result of the first Phase II trial of the company's anti-obesity drug as "slightly disappointing", not because of any failure to confirm its efficacy, but because "we still don't know what the right dose is."

"With my science background, I can say that although it didn't turn out as perfectly as one might have hoped, there was a very strong indication of human efficacy.

"But with the less than perfect news that the optimum dose was lower than expected, comes the more than perfect news that the cost of the goods is going to be lower.

"The synthesis is relatively simple - it's a small peptide, and while the production method has still to be determined, we have the option of a biological or synthetic approach.

"Whichever we choose, the low dosage suggested by the trial means the cost of producing it is going to be extremely low."

"I've been back at Monash University for the past two years, but I spent more time overseas during that period, and it must be obvious to everybody that the first successful and safe treatment for obesity is going to be a really big thing - every large drug company wants to be a part of it.

"There's currently no entirely satisfactory obesity drug on the market, and as far as we know, no others in the pipeline except ours. Should AOD9604 successfully go to market, it will be a big one."

Scollay said Metabolic was being "very actively" courted by a number of big pharma companies, including several in the global top ten.

"I have experience of pharma deals, both from within pharma companies and from biotech research, so I understand the parameters and process very well - it's really just a matter of working the best deal one can under current circumstances.

"We're in the very happy situation of being courted by a number of big players, but we have yet to get into deep conversations. "All things being equal, we'll take the suitor with the best marketing potential and best existing position in the area.

"The strategic question for the company is whether it wants to do a follow-on dose-ranging study off its own bat, or take in a partner. Certainly, a better set of data would get us a better deal. We'll keep as much of the drug's value in the company as we can."

The decision would depend on a review of the company's ability to fund another Phase II trial. The aim is to create a solid revenue stream that will help fund development of its other lead compound, a potent peptide painkiller derived from the venom of an Australian cone shell.

Scollay described the conotoxin painkiller, being developed to treat intractable neuropathic pain, as "a very solid drug" that was progressing towards the clinic - and said the company was also fortunate to be in the position of having two potential clinical products.