Virionyx gathers funds for stage-two HIV trials

By SIMON COLLINS science reporter

Auckland biotech start-up Virionyx says it has raised more than $5 million of the $8.75 million it wants from the public through its share offer.

The company needs the money to conduct phase-two trials at the Harvard Medical School for a drug based on an extract from goats which it believes is a potential treatment for human immuno-deficiency virus (HIV).

Chairman Peter Sullivan told a UBS Warburg biotech conference in Auckland yesterday: "We are above $5 million, and we have a New Zealand-based cornerstone investor that is committed to giving us $3 million. So we are up to $8 million."

The company's chief business officer, Dr John Chang, said the cornerstone investor was Takapuna-based Global Partners (Oceania), which was named in the company's July prospectus as undertaking to invest $2 million by August 30.

He said Global Partners had since agreed verbally to lift this to $3 million, and there was a "material understanding" that it would invest further "quite substantial" amounts if Virionyx achieves its planned milestones.

Two United States venture capital funds had also expressed "very strong interest" in investing.

New Zealand investors were expected to contribute a further $1 million or so before the share offer closes on November 30.

The company is privately owned by 700 wealthy individuals in New Zealand, Australia and the US who have invested $19 million since the company was founded in 2000.

Its drug, HRG214, was developed by a US scientist, Dr Frank Gelder, who moved to New Zealand with his Kiwi wife eight years ago.

Stage-one trials have been completed at Harvard.

Dr Chang said the company hoped to win US Food and Drug Administration "fast-track" approval of the drug, because the HIV virus was well defined and did not need large numbers of patients to prove a drug's effectiveness.

If the fast-track process goes ahead, the drug could be ready for marketing by mid-to-late 2006 at a cost of around $70 million.

In the meantime, Dr Chang has discussed a possible joint venture in China to develop a different drug arising out of the same technology "platform" as HRG214, which could earn revenue before 2006.

Opportunities are also seen in South Africa.

"If you go to those other countries you get a rapid regulatory approval which is not detrimental to the FDA trial but will bring a revenue stream from other technologies," he said.

Virionyx