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Healthcare | Technology

What is the pathway to success in biotech?

14 Jun 2024, by Amy Sarcevic

A researcher who is making headway with a novel dementia treatment, targeting small molecules, is giving his view on what success looks like for the Australian biotech sector.

Actinogen CEO, Dr Steven Gourlay, whose cortisol-reducing ‘Xanamem’ drug is showing great promise in clinical trials, believes a host of factors are needed to see more “home-grown” therapies enter the market.

“Clearly, having high quality science and good quality projects is very important – and Australia has an abundance of these. We also have a great regulatory environment, with high quality ethics committees, and not too much red tape.

“However, we need more than just scientific ideas that the founders are in love with,” he said ahead of the Bio Connections Australia Conference.

So what exactly does Australia need for more biotech success?


Knowing when to keep going and when to quit is fundamental to any biotech endeavour, Dr Gourlay argued.

“In pharma[ceuticals], the sooner you identify a project is destined for failure, the more money you save, and the more you can spend on projects that are going to be successful.

“If you encounter a hurdle – whether it’s unexpected toxicities or challenges with the population being studied – you also need to make sure you can efficiently redress it scientifically, and convince everybody that persevering is the right thing to do.”

Walking away from an endeavour becomes more challenging after decades of experimentation and billions of dollars in investment, Dr Gourlay admits.

He highlights how the ‘amyloid hypothesis’ – which implicates amyloid plaques in the progression of dementia – lost steam in recent years. It since regained momentum, with the approval of Eisai’s Leqembi and the imminent approval of Lilly’s donanemab, despite only modest clinical efficacy.

“A while ago, there was an expectation that we could just zap amyloid with an antibody and this would ‘cure’ the disease or stop the progression completely – and it certainly wasn’t a terrible idea. But it is pretty dramatic that after billions of dollars and three decades, the amyloid hypothesis has only recently produced two molecules with modest efficacy worthy of marketing approval. Given that the new antibodies clear amyloid quickly and completely, other biologic approaches deserve our investment if we are to halt the disease progression.”

Commercial and clinical relevance

Dr Gourlay says success in biotech means having a broad commercial and clinical relevance.

“It’s not about creating a “me too” drug – even if that drug has robust commercial sales. It’s about bringing new science that results in better efficacy and safety. Something that makes a difference to patients,” he said.

Dr Gourlay’s own drug, Xanamem, has the potential to do just that.

To date, it is the only non-amyloid therapeutic that has demonstrated clinical efficacy in multiple controlled trials, and its efficacy is potentially greater than ‘traditional’ dementia treatments.

“If our findings in patients with biomarker-positive Alzheimer’s are replicated in future, larger and longer trials, the clinical effect could be many times greater than that of amyloid antibodies,” he said.

Domestic commercialisation partners

With Australia’s small population, the commercialisation of biotech often means exportation. And, while tackling overseas markets is possible, it does require companies to be nimble, Dr Gourlay argued.

“There are some Australian biotech companies out there now with a market capitalisation in the range of several billion dollars, which are just starting to have regular revenues. And there are others, like Clinuvel, which are actually selling products.

“But with most Australian biotech companies, the markets of these products are all overseas, because our domestic population is small. So, we have to become a different company in order to commercialize ourselves. Either that or form partnerships, in the way existing commercial organizations, like Neuren, have done with Arcadia, for their RETT syndrome drug.

“So commercialization can be done as an Australian company, but it does tend to make you a primarily non-Australian organisation, even if your headquarters are still here.”

Dr Gourlay also notes that local commercialisation partners are hard to come by, with a shallow pool of companies to choose from.

“We don’t have a lot of established commercialisation companies – except for CSL Behring. So, greater access to these would of course make a valuable difference to our country’s biotech success.”

Grit and determination

With discernment, commercial acumen, and partnerships figured out, Dr Gourlay says grit and determination are then required to weather the challenges of translating research into sales.

“In biotech we say that, as a small startup company, you have to cross the valley of death before you get to the other side – i.e., where everything is somewhat de-risked, the money is freely available and you’re on the path to commercialization.

“But with most of the biotech companies I’ve seen at the early and mid stages, you don’t just have to cross the valley of death, you have to crisscross it multiple times – which can be very gut wrenching for all involved, including investors of course.”

While Dr Gourlay is now accomplished in this space, he still refers to his decades-long experience in biotech as an “on-the-job apprenticeship”.
“That is the nature of drug development – you are continually learning from colleagues,” he said.

“I try to bring the best of everything from previous companies I’ve worked for – Genentech, GBS Ventures, Principia Biopharma – and use that to create a really healthy culture for a high performing team.

“I think maintaining an openness to learning is key.”

Growth is happening

Having only just returned to Australia after 17 years in the US, Dr Gourlay is impressed with how Australia’s biotech sector has matured, in spite of all its challenges.

“It’s great to see that some older companies, like Neuren, have persisted on their journey. They’ve got fantastic royalties and milestone revenues and are now worth nearly $3 billion.

“There are also other unicorns like Clarity Pharmaceuticals, which is worth more than a billion dollars and a number of other up and coming phase 2 companies, like Dimerix, Recce and ourselves, with market capitalisations in the hundreds of millions and rising.

“So it’s been nice to come back and realize that the universe of companies is growing in a very healthy way. Also that Australia is now developing a big enough ecosystem that we can start training junior people here instead of sending them off to the US or Europe,” he concluded.

Join the debate

Sharing his views on how Australia can keep building this momentum, Dr Gourlay will join a panel at the upcoming Bio Connections Australia Conference, hosted by Informa Connect.

This year’s event will be held 29 July at the Crown Promenade Melbourne.

Learn more and register your tickets here.

About Dr Steven Gourlay

Dr Gourlay is CEO of publicly-listed Actinogen, which is in late-stage clinical development of its oral small molecule, Xanamem, for cognitive impairment in depression and Alzheimer’s disease.

He was formerly the founding Chief Medical Officer (CMO) at US-based Principia Biopharma, where he designed first-in-human, Phase 2 and 3 clinical trials for immunological diseases, multiple sclerosis and cancer. The data generated by these trials supported a successful NASDAQ IPO in 2018 and an acquisition by Sanofi for US$3.7 billion in 2020.

Prior to Principia, Dr Gourlay was a Partner at GBS Venture Partners in Australia and a Senior Director at Genentech in the US.

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