NZ clinical trial boom post-Covid slowly but surely emerging
April 16, 2021
Despite slow Covid recovery globally, enquiries for future NZ trials hit 10-year high.
The Covid clinical trial boom that seemed inevitable for a healthcare system virtually untouched by a global pandemic has been slow to materialise, but industry stalwarts say it’s still on the horizon.
The Australia New Zealand Clinical Trial Registry found in the first four months of 2021 there was, in fact, a marked decrease in the typical number of clinical trials.
During the January to April period in 2018, there were 145 trials under way; in 2019, there were 124; and in 2020, 111. By comparison, in the past four months, only 79 clinical trials are under way in New Zealand – a 35% decline on the three-year average.
That said, it’s still a far cry from the global picture, where clinical trials all over the world have seen thousands of clinical trials put on hold and an 80% plummet in enrolment numbers as facilities close and patients remain reluctant to leave home.
Trans-Tasman competition
Data on the number of ongoing clinical trials in New Zealand and Australia show New Zealand’s recovery post-Covid has been slower than Australia’s. Australia typically sees about five times as many clinical trials as New Zealand and it has noted less of a decrease compared with pre-pandemic.
It’s a phenomenon some blame on Australia’s more generous and inclusive tax credit on R&D that multi-national pharmaceutical giants can claim for clinical trials, compared with New Zealand’s, where only local operators can claim the write-off.
In Australia, the R&D tax incentive available to global sponsors can provide cost savings of up to 43.5%, a far cry from New Zealand’s respective 15%. The Australian government has estimated its tax credit has contributed to the clinical trial industry topping A$1 billion.
Pharamaceutical Solutions, a trans-Tasman clinical trial recruitment agency, has seen a 90% increase in enquiries for clinical trials since December 2020, reaching the highest volume the company has seen in 10 years.
Finance director Nicole Elliott said oncology and neurology trials in New Zealand were among the first to return in force.
In general, Elliot said it tended to be about six months from when enquiries first come in to the start of a trial, with a three-month pre-study feasibility period, followed by a two to three-month startup period for ethics and regulatory submissions and study preparation before the first patients are recruited at sites.
“We have seen clinical trial startups as quick as 35 days from receipt of final protocol to the first patient visit,” Elliot noted.
“These tight timelines compare favourably internationally and New Zealand is perceived as having one of the most rapid study startups in the world.”
One-stop-shop
Duncan Mackintosh, senior investment manager for trans-Tasman life science venture capital firm Brandon Capital Partners, said Covid raised the profile of healthcare especially among investors, though people still had to be wary of the “right investments and the right opportunities” in the sector.
He said Covid had also raised the profile of healthcare investment from governments globally.
“People invest in opportunities, and clinical trials are a step in that process, so clinical trials are just part of that commercialisation process and that’s where people are investing, but, of course, governments can also invest in things that may not lead to a commercial product but may still drive a more efficient health healthcare system.”
Mackintosh advocated for an independently governed network with cross-agency support from relevant government bodies to develop a clinical trial research network that could provide a one stop shop for clinical trial operators and pharmaceutical companies.
“We sort of get we’re a small economy, we need to think smarter, and work together to provide sort of a one stop shop for clinical trials, or provide a platform for partnerships to form.”
Industry snapshot
The clinical industry has long been seen as having the potential to shine in New Zealand’s biotech sphere.
A May 2020 report from the New Zealand Institute of Economic Research to industry lobby group Medicines New Zealand valued the average annual economic contribution of clinical trials to be $150 million between 2013 and 2018, noting its contribution to GDP had been relatively flat over that period.
Prospective treatments for “infection” and cancer brought in the monster-share of income over those five years – nearly topping $500m over five years.
However another sector report by Biotech New Zealand in 2020 found that human clinical trials had the potential to add $880m to GDP annually – roughly four times the sector’s most lucrative year in New Zealand to date in 2015 when it contributed $222m. The entire biotech sector in this country recorded $2.7b in annual revenue.
The number of players in the New Zealand biotech realm has remained relatively stable – growing from 168 firms in 2007 to 211 in 2020. It employs an estimated 700 workers directly with its typical players achieving markedly higher annual salaries compared with the national average wage of $42,000.
The average annual salary among research nurses is over $80,000 and $62,000 for the average research pharmacist.
Covid impacts
Jeff Douglas, managing director of one New Zealand’s largest homegrown clinical trial operators, Douglas Pharmaceuticals, said a landmark study into the use of ketamine to treat depression has continued throughout the Covid disruption, but he estimated it had lengthened its timeframe “about 20%”.
The sudden push for Covid vaccine staff also saw some “poaching” between companies, something border closures has exacerbated, though he noted that his company had been “pretty fortunate” to avoid staff shortages.
The company has plans to open a new $40m three-storey R&D facility at its Henderson site in west Auckland this year and will spend about the same again fully equipping it.
It will invest a further $50m in its clinical R&D programmes, up from the $15m it spent nine years ago, and has plans to capital raise again soon on the back of a successful $10m round in 2020.
Biotech New Zealand chair Zahra Champion said there had been a general consensus at the beginning of the pandemic that the focus on Covid vaccine development would “suck the life out of everything else”.
She was surprised to see the opposite.
“Actually, we saw an increase in all therapeutic areas, having R&D poured in right through to the pipeline to clinical trials.”
Champion said the flood of investor capital into the biotech sector had triggered rising valuations and specialist operators increase their IPOs and venture financings.
She cited a white paper from market analyst Biomedtracker looking at 2020 financing trends in the sector that foresaw “some degree of rebound is inevitable as the markets stabilise” from the flood of capital and an increase in “worldwide alliances” of the variety that saw so many Covid vaccines end up with double-barreled names.
“We’re going to see this benefit for 10, 15, 20 years, possibly,” Champion said.
Fiona Rotherham
16 April, 2021
