A local Covid-19 startup has had immediate success with a crowdfunded equity campaign - but is also frustrated at a lack of Government support so far at a time when $20m would give it its best shot at getting over the line.
The Covid-19 Vaccine Corporation (CVC), set up in May, began a PledgeMe campaign on Wednesday, seeking $1.5 million from wholesale investors and up to $2m (the legal limit for crowdfunded equity) from retail punters.
CVC's retail offer had $90,000 pledged as of Friday morning. It has another 28 days to run.
Its wholesale offer got off to a much faster start - and finish. It was filled within an hour, with a trust associated with the Douglas family (founders of NZ generic drug maker Douglas Pharmaceuticals) taking the whole $1.5m worth of equity, representing a 10 per cent stake.
CVC co-founder and chief executive, biochemist Dr Robert Feldman - a veteran of several life science businesses - says he's encouraged by the Douglas family's backing, which he sees as a validation of his company's novel "biobead" approach. Douglas Pharma MD Jeff Douglas was already chairman of CVC, so had a detailed knowledge of its product.
Feldman is less encouraged by the Government's, which is not currently offering any financial support for Vaccine.
While CVC is working with two government bodies, Callaghan Innovation and Scion, it hasn't received a Callaghan growth or project grant - rather it's paying it's own way to contact scientists and research facilities at both Crown agencies.
The Government has not completely shunned CVC. MBIE awarded the startup $488,000 from its Covid 19 Innovation Acceleration Fund earlier this year.
But, given the importance of a vaccine, would Fledman prefer the Government just cut him a cheque for $8m (his minimum development cost estimate) so he could get on with things rather than be cap-in-hand on PledgeMe?
"I'm in full agreement with that. We are very lean. More money would reduce the risk [of failure] to some degree and move a bit faster. But the Government has decided to take this more academic approach with Malaghan.
The Malaghan Institute and partners at the University of Otago and Victoria University of Wellington are helping lead Crown efforts (bankrolled to the tune of around $27m overall) to secure a Covid-19 vaccine for New Zealand as part of the Crown-backed Vaccine Alliance Aotearoa New Zealand (Ohu Kaupare Huaketo).
The Malagan-led VAANZ effort has a broad-ranging brief to assist in vaccine development, including assessment of promising local and international candidates and collaborative work to help scale up manufacturing and distribution.
"Our team has the most - and, I think, only - commercial vaccine development experience in the country. The academic group at the Malaghan/VAANZ are excellent scientists but have little infectious disease vaccine development experience. But they are the ones who the Government have tasked to spend our money on New Zealand vaccine development."
Feldman says he's done his sums and worked out that if the Government offered him a blank cheque, he would fill in $20m.
He estimates CVC's product is probably a year away from human trials. That sum would shave around four months off development time, and increase the chances of success.
New Zealand's vaccine drive falls under MBIE and Research, Science and Innovation Minister Megan Woods.
A spokeswoman for Woods asked if Feldman had actually put his hand up for the $20m.
The CVC boss said his company had one modest grant request on the table - a $400,000 project grant request, currently in front of Callaghan Innovation.
But his communication with the ministry had put him off applying for any substantial backing.
"I have had several conversations from a senior person within MBIE, [science partnerships manager] Simon Rae, who has told me that MBIE will not fund CVC beyond the initial $488,000 we received. He indicated the Government's decision was to hand the planning of vaccine development in New Zealand to VAANZ - run by academics primarily at the Malaghan Institute. Therefore, we have not put in any applications."
For MBIE, a spokesman said: "Our current focus remains on negotiating purchasing agreements with pharmaceutical companies with vaccines in late-stage trials and that have manufacturing capacity, supporting the work of VAANZ, and considering further purchasing opportunities.
"However, it's encouraging to hear that CVC is making progress. We continue to monitor the progress of a number of vaccine candidates that are well advanced in their development as well as monitoring the progress of approximately 234 vaccines in development around the world."
Our Government is not only backing Malagan.
It has also pre-purchased 1.5 million doses of the vaccine developed by Pfizer and BioNTect, which is expected to land around March.
No official figure has been put on the Crown purchase. But the US government is buying the Pfizer vaccine at US$20 per dose, implying 1.5 million doses would have cost our Government at least US$30m ($41m - although that's before some unique and potentially very expensive distribution challenges - keep reading).
Feldman says he fully supports the Government's decision to pre-purchase Pfizer's vaccine. He says it does not nullify CVC's programme in any way.
The Pfizer/BioNTect collaboration is one of just hundreds of Covid-19 vaccine development efforts around the world, many involving top-tier universities and big pharma companies with multi-billion dollar budgets.
CVC says its solution has a unique approach, cost and distribution benefits and a home-grown vaccine would help secure NZ's supply amid the global scramble. But how can it compete with the big boys?
Although trials have indicated it is 90 per cent effective, Pfizer's vaccine needs to be stored in a special, expensive ultracold freezer (that is, one that can take the temperature down to -70 degrees centigrade). In a regular freezer, it will spoil after five hours. Pfizer will ship the vaccine is special containers holding 1000 does on dry ice but, one open, they will only last 15 days, with the door only allowed to be opened twice a day, for less than 1 minute at a time. In the CVC boss's view, that's "a logistical nightmare."
Feldman says by contrast, his company's vaccine - like most - can be kept at a regular fridge temperature.
The CVC chief executive says he cannot put a per-dose price on his vaccine at the moment, but he says it will be low-cost.
More so, he says its design, in which small pieces of Covid virus are coated onto a "bead" made from the same material as dissovable sutures, means it can be easily adapted for mutations, such as the variant strain that seems to have emerged in Denmark.
Its approach builds on a concept pioneered by Palmerston North company Polybatics. CVC licensed Polybatics' technology and Polybatics founder Dr Andrew Herbet is now Vaccine CVC's chief science officer.
In a video made to promote CVC's PledgeMe campaign, Feldman describes his company as a "high-risk" investment.
How confident is he his CVC's biobeads will ultimately be approved in trials and, down the line, as effective as Pfizer's vaccine with its touted 90 per cent success rate?
Feldman says he's assembled a crack team. Everything about the biobead concept works on paper, and in September the startup reached a key milestone when it successfully constructed several biobead candidates within bacteria.
But he qualifies: "Any biotech endeavour is high-risk. You're working at the edge of science. Sometimes things happen that are insoluble."
But so far, Feldman and his team have cracked every problem, and reached every milestone their list. And while our Government has only shown modest interest so far, he's also had conversations with big pharma companies, whose ears are starting to perk up. Next year, those talks could turn into serious conversations, the CVC chief executive says.