NZ biotech firm takes cancer test to Europe

A new licensing deal with a German diagnostic firm could see a cancer test developed by Dunedin-based Pacific Edge Biotechnology hit a market worth millions in a year.

Under the exclusive European licence Potsdam-based Signature Diagnostics will undertake clinical trials and commercialisation of Pacific's colorectal cancer test.

More than 1.1 million new cases of colorectal cancer are identified globally each year, with more than 530,000 people expected to die from the disease this year, the company said.

Chief executive David Darling said similar prognostic tests for predicting breast cancer recurrence were selling for US$3460 ($5301) - a price tag the firm hoped to emulate.

Darling wasn't aware of any competition for the test, but wasn't making specific predictions about potential revenue.

"What we are doing is providing them [investors] with the information about the market size, the number of new incidences and the cost of the assays and they can have their own estimates," Darling said.

If 1 per cent of the 1.1 million new cases a year received the test at US$3460 each, the market would be worth more than US$38 million.

It was revealed on Friday that The Warehouse founder Stephen Tindall has bought a 7.9 per cent stake in Pacific Edge, which trades on the NZX and has market capitalisation of just $9.3 million.

The multi-gene molecular test defines the risk of the cancer spreading aggressively to other parts of the body, helping doctors set the appropriate level of treatment for each patient.

"Much cheaper for the medical insurance company and much better for the patient," Darling said.

Signature Diagnostics will use patient data stretching back five years to undertake a clinical validation.

Upon successful completion of the trial the exclusive licence would earn Pacific revenue from licence fees, milestone and royalty payments.

The test could reach the market in about 12 to 18 months, Darling said.

However, the company was planning to raise more capital from existing shareholders before commercialisation.

"Essentially we're looking for enough cash to get us through the clinical trial period and that's a window of about two years."

Commercialisation would be achieved via a centralised service using a registered clinical laboratory.

Using a centralised provision strategy the assay test would not require European regulatory approval until the development of a kit form, Darling said.

Pacific was looking for partners in the US and Asia with which to repeat the centralised service model.

Meanwhile, the development of two tests related to bladder cancer was also progressing with Pacific planning to complete trials by December 2007.

Darling said these tests could also be brought to market using a centralised provision strategy through licensing or by Pacific setting up subsidiaries in key parts of the world.