NUKED: The IP game, with Clarity Pharmaceuticals and Radiopharm Theranostics

The question we are dancing around in episode 3 of NUKED is whether locking down isotopes supply chains are really the only way to play the radiopharmaceutical game.

We ask Clarity Pharmaceutical executive chair Alan Taylor and Radiopharm Theranostics executive chair Paul Hopper how their companies are instead owning the IP, or banking a portfolio of IP licences, to create the kind of economic moat that others are pursuing via isotope supply chains. 

Chapters

• 1:57 Clarity Pharmaceuticals executive chair Dr Alan Taylor
• 13:57 Radiopharm Theranostics executive chair Paul Hopper

Transcript

Rachel Williamson: 0:00

The first rule of biotech is control some IP, somewhere. And in radiopharmaceuticals if you can't control the supply chain, IP is the next best thing. 

I'm Rachel Williamson, and this is Phase III. 

The radiopharmaceutical sector is increasingly looking like a two hander. You make or license the biological tracker and you lock down the isotope supply, hopefully locking out competitors in the process. But what if you don't need to lock down the isotopes, because you have the only IP that can make them work? Or what if instead you're building an intellectual property bank? One that looks like it might prove very attractive to a buyer before you have to make the call on isotope supply? 

That's the question we'll be dancing around in this episode. And we're going to start with Clarity Pharmaceuticals, a company that prides itself for being born and bred in Australia. 

Executive chair Dr. Alan Taylor says their copper isotopes are similar to lutetium 177, the star of the two radiopharmaceutical therapies on the market today, Lutathera and Pluvicto, both owned by Novartis. But the copper isotopes are easier to make because instead of needing a whole nuclear reactor, they use a rhodatron which is like a cyclotron, but lower powered. And Alan says no one else has this special tech that can lock copper isotopes onto the biological tracker, so no one else is really using them. And that means their economic moat is in that technology, not in their access arrangements for isotopes. It also means they don't really have to compete for the isotopes. Yet. 

Alan, tell us where your science came from.

Alan Taylor: 2:02

When we talk about biotechs, we talk about their intellectual property. Usually we talk about their smarts, their, their know how, uh, and where they've actually come up with that capability. So when I say 100 percent homegrown from the benchtop, that means the cage that I'm referring to was developed in Australia some 70 years ago, in the first instance. Then that fell into the hands of Professor Paul Donnelly at the University of Melbourne. Uh, Paul did a few things with it. Made it easy to use and, and easy to conjugate, those sorts of things, but importantly made it bifunctional. It not only held the metal, but we could actually attach anything to it from a large antibody to a small molecule. And then only about 5 or 6 years ago. Now, I've been involved in clarity for some 11 years we went about developing a PSMA product, the BIS PSMA is our major asset within our company.

Rachel Williamson: 2:58

As a reminder for our listeners, PSMA is the abbreviation of prostate specific membrane antigen. A protein biomarker found on prostate cancer cells.

Alan Taylor: 3:09

It is. But at first we made one like the others. We made one like Pluvicto and Pylarify. And gallium PSMA, the generic products and, uh, ours was as equally as bad as theirs.

Rachel Williamson: 3:20

Why do you say bad?

Alan Taylor: 3:22

Because that we've had modest uptake and, uh, and poor retention in lesions, and that's not good for therapy nor diagnostics. So, we made a new one at the benchtop. And we made this bi-specific that increased the uptake 2 to 3 times into the lesions. It was retained over the time. A lot more was internalized. It was in collaboration between Clarity and the University of Melbourne that we did that. We did that through some industry academic grants and we funded people within the lab of Paul Donnelly and continue that relationship on today and wrap around that incredible team. The majority of which are here in Australia, and now we have about a third of our team in the US running, help run our clinical trials and our ops and our supply chain.

Rachel Williamson: 4:05

You've got seven clinical trials underway right now and 24 milestones on the calendar between now and 2026.

Alan Taylor: 4:15

That would be around about right. I'm sure we could do more.

Rachel Williamson: 4:18

The trials are for diagnostics and treatments for prostate cancer, neuroblastoma, which affects children and starts out in the nerves. And the rare neuroendocrine cancer, which is a cancer of the nerves and glands. Clarity's thing is that the 12.7 hour half-life of copper 64 means you can run a scan on a person twice to pick up more tumour cells. Alan, you're saying that improves the sensitivity of the test. So tell me about these clinical trials and how that thesis is playing out.

Alan Taylor: 4:50

I want to come back and reflect on our tech. The product we make is a diagnostic and a therapy. It relates to the isotope we use. And this is where we're very unique in the marketplace. When we use copper 64 with our product, it's a diagnostic, and then we can utilize copper 67 with our product, and it's a therapy. So it is chemically the same product for diagnosis and therapy. And this is because we're utilizing this perfect pairing of copper isotopes. So I'm going to come back to SAR-bisPSMA because that's the one that's really taken off. Uh, SAR-bisPSMA is in phase three clinical trials as we speak.

Rachel Williamson: 5:31

I'll pop in here and explain some of those acronyms. SAR stands for sarcophagene, and that is the cage Alan referred to earlier that holds the copper isotypes. The cage is the chelator, the link bonding the isotopes and the biological tracker together. And bis means twice or double as Clarity users to biological targeting agents. It says preclinical data shows that this delivers more of the isotope end to tumours. Back to you, Alan.

Alan Taylor: 6:02

Yeah. And, uh, and so that product diagnostically, so the use of copper 64 has already kicked off phase 3 clinical trial in pre prostatectomy, So before a man, he goes in, he's got rising PSA, they detect cancer in his prostate and we use PSMA then to image before the prostatectomy and to see whether there's firstly, look at the lesion and then look if there's any metastatic disease. Now, the problem with the market, Telix's product gallium PSMA11, and also the Pylarify product, is that these products have very high, what's termed specificity, but have very low sensitivity. Now, sensitivity is incredibly important, particularly in this disease, because specificity means if it lights up, it's got a high probability of being cancer. But when something's got low sensitivity, it means that if it doesn't light up, it doesn't mean it's not cancer. And these agents are as low as 25% up to about 50%. Uh, you know, particularly in the, the latest one Posluma. And so you're missing a lot of cancers.

Rachel Williamson: 7:14

And I guess that kind of data isn't really good enough for a man who's about to have a prostatectomy. For our listeners that surgery to take your prostate out, and it comes with the risks of impotence and incontinence. So that's the phase three trial for before a prostatectomy. Alan, I understand you're also recruiting for a phase three with the same product. And the same cancer. But for men who have already had that surgery or treatment.

Alan Taylor: 7:41

We're looking to kick off the second phase three with the same product, so we can treat the lesions earlier and actually have better outcomes. Now, in the phase two. We found that we could find much smaller lesions than the current standard of care, the gallium PSMA product and the Pylarify products, and we went head to head on some of those.

Rachel Williamson: 8:01

How small?

Alan Taylor: 8:02

We're detecting lesions down as small as, diameter smaller than two millimetres. So that phase 3, uh, will begin recruiting this year, but that same product again is a therapy. And we're doing the SECURE trial and we're in a dose escalation, dose expansion trial of that. We kicked off at very low doses and we started to see, even at low doses, a therapeutic benefit for a third of the patients. We went to the next stage, which is about the equivalent dose of Pluvicto at what's termed 8 gigabecquerels. And we found all three patients had a phenomenal PSA response. And one of those patients under what's called expanded access had a what's termed a complete response after a second dose. This is a patient who'd failed 5 to 7 lines of therapy and had no other hope and suddenly we had that response in the first patient we ever treated twice with what we thought was a therapeutic dose. We've moved that to 12 gigabecquerels because we're doing a dose escalation safety trial. This was only meant to be safety, but there's, there's a lot of efficacy that we're presenting and 12 gigabecquerels we found once again, great responses in PSA.

Rachel Williamson: 9:16

We've talked about the isotopes are using. But what about the biomarkers you're using?

Alan Taylor: 9:21

Yeah, so it's quite funny. And I know we started with isotopes. I would call that back to front. The real science is the molecule. PSMA is the first one I mentioned and we created a new product. The bispecific with two targeting moieties. The next one in line is a product called Bombicin, and Bombicin actually derives from a frog, of all things, and, um, was derived by a scientist, and I'm going to once again wax lyrical about the science. A scientist called, uh, Helmut Macker he had made a couple of molecules, uh, utilizing Bombicin, and then collaborated With Paul Donnelly again at very early stages and produced, uh, what he termed as the best Bombasin he'd ever created. And because of the charge between our unique chelator, the CAGE, and the charge of Bombasin. and it actually targets the gastrin releasing peptide receptor.

Rachel Williamson: 10:14

And what is that?

Alan Taylor: 10:16

That is a receptor that's expressed on a number of different tumors. So that means it becomes a pan cancer target. So we started off in breast cancer. We generated some great data there. And then, but we had the urologist calling us up. Asking to utilize the product in prostate cancer in patients that were PSMA negative. And that went really, really well. And then the third product, which is you touched on neuroblastoma, so we're moving that at the moment in therapy trial, uh, with a diagnostic alongside it, only in the U. S. because of the, in childhood cancer, the great thing is there aren't lots of kids dying of cancer. The bad thing is it's then becomes very difficult to run clinical trials, uh, because of the small numbers.

Rachel Williamson: 11:02

Your copper isotopes are beta emitters. Beta emitters generally have a couple of decades of safety data on them. Maybe not copper. But generally. Does that make a difference when you're treating children?

Alan Taylor: 11:15

We think the beaters have a great opportunity for going much earlier stage, much younger patients, uh, that you can treat. We're treating kids and up to very, very high doses of radiation, not having, you know, significant side effects, which is, which is wonderful, but it is barely scratching the surface of a massive oncology market. And then we're looking to move this obviously into combination therapies. Like IO, like Keytruda is a blockbuster drug and also best standard of care. So in prostate cancer, getting the first line therapies with these new androgen receptor inhibitors and the like. It is just at the what we think is the start of the frontier in this space. And we're excited to be there.

Rachel Williamson: 11:58

That was clarity pharmaceuticals executive chair, Dr. Alan Taylor. Clarity prides itself on being a homegrown from the lab, upwards Ozzy company. And it is using that unique IP as a moat, not only around the science. But around it, isotopes supply chain as well. Our next guests company is doing things a little bit differently.

Charis Palmer: 12:22

Hi there, I'm Charis Palmer, producer of Phase III. When Rachel and I set about building a new podcast for life science leaders, scientists, and long suffering biotech investors, we looked at what was missing in this space. We believe Phase III serves an unmet need for in-depth conversations in a world where nuance matters and AI-written investment articles simply won't cut it. If you agree, please follow us and sign up to our newsletter via LinkedIn, pledge financial support at phasethree.Buzzsprout.com and rate and review the podcast on the podcast platform you use, to help bring it to the attention of others. Now, back to the show.

Rachel Williamson: 13:01

If clarity is building out Aussie ideas, Radiopharm Theranostics is licensing in. It's bought in IP working with five of the most common isotopes from gallium 68 to lutetium. And even some of the more speculative ones, like Terbium 161. The trackers are a gamut of small molecules, peptides, monoclonal antibodies, and nanobodies. And the cancers it wants to find or destroy include prostate, of course, breast, brain and pancreatic. It's quite the portfolio and one that has attracted the eye of a very big US pharma company during its recent capital raise. But it's also sold a big dream very early in its life. And investors are displeased. So I asked the man who brought the IP together, executive chairman Paul Hopper, about how he's positioning Radiopharm Theranostics during the global race for supply chain security. 

I've got to address the elephant in the room. You've got some fairly annoyed shareholders from the looks of it, who have watched the share price drop from 60 cents when it IPO in 2021, and then the capital raising this year at 5 cents. I know this was a premium to the three cents where it's been, but what is your message to them?

Paul Hopper: 14:21

Yeah, look, so we, we are acutely aware of that and that's weighed very heavily on the board and management. I mean, and the board of management are all invested. I mean, I'm, up until yesterday at the shareholders meeting, I was the biggest investor, so I certainly feel that pain. The IPO timing, there was no way we could predict that, you know, interest rates would go up and the market would fall out of bed. So we listed in November 21 and on day 1 of the IPO, the, the stock performed badly. And then of course we did raises at smaller share prices and so on and so forth. And I think there was a view in the market that the capital demands of the business were high, and that acted as a very bad drag on the share price. And then last year, to be frank, we missed a couple of targets that we said we were going to do. And that all combined to just drive the share price down. So, um, to those people that are still in it and, all of the board and the management and myself, of course, we're still there, is I think we've turned the corner. We've now got funding well into 2026, which will fund all the programs. And what we did last year was we had to put a lot of the programs on go slow. We didn't stop them. But we certainly slowed things down and I, I got the CEO to make really serious reductions in the head count. That's all behind us. Now we've got the premier radiopharmaceutical company in the world to take maybe up to 19. 9%. We have a very collaborative relationship. The two assets that we transferred to them as part of the, they actually would like us to help them develop them. So I think the future looks good. I mean, obviously I haven't looked at it today, but whatever the price is 4 cents, it's a long way back to 60 cents, but the company is in very good shape today.

Rachel Williamson: 16:15

Let's talk about this in the context of Lantheus, which you now have on your register, your share register as a 7 percent shareholder. For our listeners, Lantheus is a major US radiodiagnostics and therapy company and they're worth 6. 6 billion-ish US dollars. Paul, I'm really keen to get your take on how to understand this investment. Is it IP related? Is it the fact that you've got three clinical trials underway and there's licensing opportunities if they perform as you expect? Or is it because it kind of looks like big US companies are chasing down anything that moves right now and you've got some traction with your science?

Paul Hopper: 16:55

Yes. So we at Radiopharm have known them for three or so years since our IPO because we shared a technology. In those days, they were purely an imaging radiopharmaceutical company, not a therapeutic. And so they owned the imaging side of one of our technologies and we owned the therapeutic. So we knew them quite well. and when we were raising money recently, we invited them into the raise, and they were very keen to get a foothold. So, look, I think it was an indication that they liked the whole of the portfolio. Otherwise, They could have quite easily come to us and said, 'Oh, we like your pancreatic, uh, radiopharmaceutical or we like your brain metastasis.' And that would often be the normal case that a big pharma, and I sort of call them a big pharma because it's 10, 7 or 8 billion, they're getting into that range. They could have just plucked one of the assets out and done a licensing deal, but they decided to invest in the company, which basically, I guess, gave them exposure to every one of the assets we have, of which there are, there are six, phase one, phase two, we're about to go into phase one and two preclinical.

Rachel Williamson: 18:04

They did get two of your assets, assets. So I understand they paid, was it 3 million for two assets? Was that correct?

Paul Hopper: 18:12

Yes, yes. So as part of the transaction, it's a little bit hard to sort of ascribe the 3 million, which, as you correctly point out, they paid, they looked at it more of a package that they would invest 10 million US and as part of that, they would like to get two of these preclinical assets that, which we were developing. And we said, well, we have actually spent some money on those two assets. Not a lot. And they said, well, there's some historical costs. We'll give you that back. So they gave us 3 million.

Rachel Williamson: 18:42

I see. Something we're going to cover in a later episode in this series is intellectual property and how radio pharmaceuticals companies are creating serious IP portfolios. And part of the reason they're doing this is because the acquisitions market for companies in the space have been really kicking off. I'm interested to know what you think of this in relation to Radiopharm.

Paul Hopper: 19:06

Yeah, sure. So, we did not develop any of the technologies in our portfolio ourselves, we acquired them or in-license them from either universities or medical institutions that have developed them. So with that approach you don't own the IP, you get a license to the IP. So if the IP is doubtful or not clear or not robust, or has 12 months left on it, we don't license it. So the IP, you sort that almost out from the day one that you find the technology that you like. If the IP doesn't stand up to diligence or, or close scrutiny, then that's the end of the discussion. Because as you know, in biotech companies, we generally don't own bricks or mortar. The asset we own is the right to the technology, which is protected through the intellectual property.

Rachel Williamson: 19:56

Let's talk about the NASDAQ listing. So Radiopharm promised to start a listing last year, then pulled it because the market conditions weren't good. Now it's on for the end of this year. What's the reasoning behind listing in the U S especially at such an early stage of the company's life when you've got, you know, so far to go with those clinical trials.

Paul Hopper: 20:19

Yeah. So it's a very simple answer. Uh, as part of the 70 million raise we did last month, there were five US institutional investors that came in on the fundraising. And one of their requirements was that they, that we do a level two compliance listing. So not, this is not a

Rachel Williamson: 20:37

Why, why do they want you to do that when they can clearly invest also in you when you're Australia listed?

Paul Hopper: 20:45

Yes. I think they wanted to have a US ticker symbol in the sense that If they did want to trade on the US they can, it wasn't, um, I can't be any more prescriptive than that. That was one of the conditions that the bank has brought to us and provided it wasn't a level three full IPO listing with the capital raise with all the Sarbanes Oxley and the governance required we were happy to do it. So, and as you pointed out, we'd actually flagged this 18 months ago. So a lot of the work, uh, had actually been done so that we, we will get that listing before Christmas. It's pretty much completed. now.

Rachel Williamson: 21:20

So much of what pharmaceutical companies actually need is in the US. All these companies I'm talking to have bases in the US where they are securing their isotopes and on the pharmaceutical side, obviously, you're having to go through the Federal Drug Administration in the US (the FDA) for your key approvals. And I understand even your CEO is based in the US. It seems like the US might've been a better fit. So why did you list I guess a better question might be why did you list in Australia?

Paul Hopper: 21:52

Sure. So I've listed all my companies, uh, all my biotech companies on the ASX because it can be a little easier than going out for a straight IPO on Nasdaq or whatever exchange in the US. You can list a slightly smaller company at times and often the appetite for early stage biotech is a little higher in Australia. I wouldn't say so much nowadays, but at the time you could, you could launch IPOs, you know, up until 2022, you know, 19, 20, 21, in the era of free money, the market was pretty buoyant, but when that all changed, interest rates went up and technology was relegated to the basement with biotech under that. It became a much harder. So, the ASX has been a good venue to list companies.

Rachel Williamson: 22:45

It feels like the tide is turning on that just this year. Do you think those buoyant times might be coming back for biotechs?

Paul Hopper: 22:53

Yeah. So there's definitely, well, as the Americans say, there's definitely green shoots in the biotech market that you can see happening. There's been some big raises. I mean Clarity raised a hundred-plus million, three or so months ago, we raised 70 off a market cap of 15. So that's like four times your market cap, which is pretty much unheard of. So yes, I think there is a stirring there, which is great.

Rachel Williamson: 23:20

Aside from the NASDAQ listing, what are the big milestones on the horizon from an investment and Business perspective that we should be looking out for?

Paul Hopper: 23:31

So we are a company that has four therapeutic drugs and two imaging. I think the consensus is that the market looks at therapeutic radiopharmaceuticals, that is the treating of the cancer, it's more attractive than just taking images of it. So we've got a pancreatic, uh, cancer drug. Our four priority candidates have had approximately 172 patients treated in them across the four technologies. So we don't really, we're not really worried so much about what you normally look for in a phase one, which is safety. Because we, for example, our pancreatic cancer has had 99 patients treated in Europe under compassionate use. So we don't think there's a safety issue. So we've got a number of, uh, announcements or data releases that are going to come out over the next 6 to 12 months. 

In the pancreatic study, we hope to dose the phase one in America, in New York, it's only nine patients, it's only small. We hope to get that done in the next number of months. We have a technology from London, from the Imperial College that I licensed for metastatic brain cancer. So that is primary cancers like breast or whatever that have metastasized to the brain. That's been in 41 patients already in, in London. And we're, uh, looking to announce some data on the phase 2B again in the next six months or so, and then we have these two, uh, little antibodies that are called nanobodies. Uh, here in Australia, for PDL, the target is PDL1 in lung cancer and we hope to have read out on some of that on some patients before Christmas. And then the first cousin to that is another nanobody for HER2, HER2, which is very, very common target in breast cancer and gastric cancer. And we're just negotiating with a few centres in Australia to start a study before Christmas. So there's a, there's a good number of announcements in the next six months.

Rachel Williamson: 25:34

That was Radiopharm Theranostics executive chairman Paul Hopper. Science IP could be the other way to play the radiopharmaceuticals game, instead of also locking down isotope supplies that is. It will take time to see how this plays out. 

In our next episode we'll take a look at whether building an Australian supply chain as possible. From mine to medicine as one report dubbed it. Australia has the tech, or almost has the tech, to handle all parts of the chain from recycling nuclear waste into cancer treatments to delivery. But given the headstart that the US and Europe already have. And given the global authority, the health regulators in those areas have for approving drugs. We shall see.