A promising New Zealand-made anti-cancer drug is headed for clinical trial after picking up a $23 million grant overseas.

Chemotherapy drug CP-505, developed over three years by University of Auckland associate professors Jeff Smaill and Adam Patterson, targets oxygen-deprived cancer cells while sparing normal tissues, making the treatment more active, specific and safer than older chemotherapy drugs.

Now, Belgium-based Convert Pharmaceuticals has secured $23m to take the drug further, in clinical trials that could begin as early as next year.

It makes CP-505 one of more than a dozen drugs that have reached the clinical trial stage to have come out of the university's Auckland Cancer Society Research Centre, regarded as one of the world's most renowned research labs in the field.

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Patterson explained the new prodrugs were inactive by themselves, but transformed into potent anti-cancer agents when entering tumours.

Many tumours contained areas that were well-oxygenated, and these were hard to treat with traditional radiotherapy and chemotherapy approaches, as well as immunotherapies.

"However, CP-506 becomes active in these areas and eradicates these treatment resistant areas very efficiently," Patterson said.

Its development has already been ranked by the European Commission as among the top eight per cent of all European projects.

A presentation on it is due to be given at the American Association of Cancer Research's annual meeting in Chicago next month.

Smaill and Patterson are now working with Convert on developing ways to genetically predict which patients may benefit the most from the drug.

They said CP-506 represented many years of hard work by a dedicated team of New Zealand research scientists, and its success was made possible by support from the Health Research Council and BioPharma Translational Research Initiative.

"We are grateful to these funding agencies for sharing our vision of bringing life changing therapies to terminally-ill cancer patients," Patterson said.

"We hope to work with Convert to bring future CP-506 clinical trials to New Zealand as soon as possible."