Yoke Har Lee: Firm plays NZ drawcard to win drug trials

Gerard Dunne co-founded research company BELTAS to meet the demand for cheaper outsourced clinical trials. Photo / Greg Bowker

Auckland-based company BELTAS Clinical Research pretty much defines the idea of a "weightless" business - one where the emphasis is on knowledge and other intangibles, rather than physical assets.

BELTAS' business is testing new drugs and medical devices, and the company is winning deals against stiff international competition.

Employing only five people, BELTAS has grown by 220 per cent in the three years from 2007 to this year, helping it win a place in October in the annual Deloitte Fast 50 awards.

The company was founded in 2003 by Gerard Dunne, a former project management specialist, with the help of Dutch research scientist Helmine Verhoeven.

As someone in the business of project management, Dunne confesses he knew little about the science behind clinical research. On the other hand, Verhoeven - a research scientist then working with a giant pharmaceutical company - had no knowledge of running a business. The pair met through a mutual friend and their skills became a potent cocktail.

Dunne had noticed in his project management work in the late 1990s that pharmaceutical companies were beginning to outsource work on clinical trials. By 2000 that outsourcing had reached New Zealand shores, and BELTAS was set up in response to the demand. The BELTAS name is meant as a play on the name of Abel Tasman, and the qualities of exploration, endurance and discovery.

"The company which Helmine used to work for gave us our first major piece of work, and became our foundation client. We are lucky it worked out well," says Dunne. In the firm's second year of operation it clinched work from a large international company.

"This was our first foray into managing contract research across Australasia, with four sites in New Zealand and 10 in Australia. For this we hired a specialist in the therapeutic area - cardiovascular medicine - based here in New Zealand, and serviced all sites from here, generating plenty of transtasman traffic."

It is a business filled with adrenaline. "What is really exciting for us is we are amidst what's new in approaching diseases, and we want to get work to trial it [a drug] in the early phase," Dunne says. Also, if a drug trial succeeds there's the added benefit of playing a part in something that improves people's lives. Dunne says some of the trials directly benefit New Zealanders. One example is a trial that gave a handful of Kiwis access to an investigative product for a rare respiratory condition.

The pharmaceutical and biotechnology industries have long gestation periods from concept to marketplace. The first phase of any drug trial takes between one and seven months, the second phase another two to three years, and the last and most strenuous phase can take as long as five years.

In the trade, BELTAS is what is known as a clinical research organisation. The services it provides include identifying researchers who are qualified to carry out a particular project, arranging the necessary regulatory approvals and helping to manage the project.

Potential clients are offered an environment where standards are similar to those in Europe and North America. However, says BELTAS, the costs of setting up clinical studies in New Zealand and Australia are much lower and the process takes less time.

"We are able to cater for trials involving smaller groups," says Dunne. "While we can't provide trials for large populations, we are able to provide good-quality information."

Big drug and biotech companies are careful in their choice of contractors. During the early phase of any drug's trial, the data and standards used to conduct the trials have to be robust, Dunne says.

According to recent estimates, pharmaceutical companies spent around US$8.5 billion ($12 billion) worldwide in 2007 on contracting services to help test drugs.

The clinical research organisation services business has been growing by around 15 per cent a year since 2001, according to industry magazine Contract Pharma.

BELTAS has undertaken clinical trial work in the Australasian market in the areas of oncology, cardiovascular diseases, diabetes, and immunology, and has a niche in running trials of medical devices. The company also has a European arm, managed by Dunne's business partner Verhoeven, now based in The Netherlands.

A partnership with an Australian company, Clinical Network Services, has also been helpful, allowing the two companies to collectively pitch for Australasian clinical research work.

Speed and price are the other drivers of the industry. Unlike many New Zealand exporters, BELTAS is still able to offer competitive pricing to American and European pharmaceutical companies looking for contractors to run their trials, Dunne says.

"If the NZ dollar is weak, we are well below [European and US competitors]; if the NZ is strong, we are still a bit below," he says.

Revenue growth for BELTAS has been steady after a hiatus from the financial crisis, which brought budget cuts for many businesses including biotech and pharmaceuticals.

In future, Dunne expects further competition from emerging economies such as China and India which, with their large populations, can take on later-phase clinical trials which need large samples.

New Zealand, however, presents a highly viable alternative for early clinical trials, Dunne says, with its speed in data gathering and an integrated health record system that facilitates clinical studies.

The company also pioneered the establishment of an accredited training system for the New Zealand market, to offer better services and raise research standards in this country. In 2007 it negotiated a training franchise with a US training organisation to train its own staff and those working in hospitals and clinics.

Dunne likes to joke that he is the token Kiwi in his office. The research team working in his outfit are highly specialised employees.

"We are not a labour-intensive business, but a reasonably high-value business. There are not many people in the country with the skills we need," he says. "All our staff are hired overseas."

Word of mouth is the company's best marketing tool, and the internet has also been directly responsible for winning work from Britain and the US, Dunne says, while participating in conferences has always been crucial in helping the company secure face-to-face meetings with prospects.