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Biotech firm a leader in cell-encapsulation 21 August 14 The Business Times
TO the naked eye, the capsules produced by biotechnology firm Austrianova look like brightly coloured balls, each barely a millimeter in diameter.

But each one of these capsules is in fact a pod capable of containing 10,000 living cells.

Professor Walter Gunzburg, the chairman and chief technology officer of Austrianova, explained that the capsules are made of a special type of cotton, designed to protect the cells and cocoon them so they can grow and do the job they need to do - for these cells, contained in their pods, are to be injected into the human body for a variety of potential applications - from cancer treatment to probiotics, stem cells and cosmetics.

The special cotton of which the capsules are made also ensure that the body's immune system does not reject the cells, he said.

"We take living cells and we mix them with this cotton material - this special proprietary cotton derivative which we manufacture ourselves. When you mix the two together you form these capsules, with the cells inside."

This is what Austrianova's Cell-in-a-Box or cell encapsulation technology is about - and it could change the way medication is administered to patients.

The capsules are all porous, to allow for the movement of substances in and out. This way, the cells inside can draw nutrition from outside and expel waste; the porous membrane also enables useful substances produced by the cell to enter the body.

Prof Gunzburg said: "What we're doing here is making a mini implant. Instead of manufacturing a pharmaceutical product in a factory, putting it in a bottle, sending it to the hospital and then administering it to the patient, we are actually moving the factory into the patient."

Diabetes patients, for example, are injected with these capsules containing insulin-producing cells, which can be programmed with mechanisms to react to the body, only producing as much insulin as is needed each time.

Dosing in this way will be more precise, compared to the conventional method of making rough estimations for each dose, or relying on a fixed dose regardless of changes in the body.

The system is thus self-regulating, which takes some burden off patients from having to monitor their doses.

Austrianova's most advanced programme so far is in the treatment of pancreatic cancer, which has been in two clinical trials in Europe involving 27 patients with advanced stages of the disease.

Prof Gunzburg said existing drugs have a small effect on one's survival and reduce pain, but cause a range of side effects.

The pancreatic cancer patients have been injected with capsules containing cells that have been genetically modified to activate the chemotherapeutic chemicals these patients are administered.

So the chemotherapy is activated only where these cells land up. Austrianova's chief executive Dr Brian Salmons said: "It's like a magnifying glass, focusing the effect on the tumour. This allows you to go in with a low dose, so that you don't really get many side effects. So you get better anti-tumour activity and fewer side effects as well."

Results of the trials have so far been promising: the patients have a median survival period of 40 weeks, double that of the current gold standard treatment. In eight of the 27 patients, the tumours shrank as well.

Cell-encapsulation pioneer

Austrianova is the only company in the world using its proprietary cotton material to advance cell-encapsulation technology.

The material of which the capsules are made enables the capsules to be frozen and shipped around the world and stored for up to five years. Most other cell products need to be used immediately, making logistics more costly and complicated.

Austrianova's operations are primarily partner-based. The company has around 10 partners worldwide, with whom it conducts research and development and leverages on their expertise in order to deliver a customised product.

"It's very customised. Once the production process is set, it's very simple: you just put the cells and the cotton together at the beginning and the beads come out at the end. But how you tweak the cells, how you tweak the cotton to make the perfect bead for the perfect application, like the size of the bead, the size of the holes - that's all stuff that we tweak," said Prof Gunzburg.

Interestingly, this business model differs from what the founders of Austrianova initially had in mind.

The company rose in Austria, with its original focus being to develop all stages of its product for pancreatic cancer, but this was an extremely costly mission.

Austrianova thus went from developing its own product to being a technology platform, and this is how the company came to be in Singapore, known for its vibrant stem cell community. Singapore became the company's stepping stone into Asia when it set up here in 2007.

But what Singapore lacks, compared to Europe, was a venture capital culture.

Austrianova adapted. It has since built itself here by relying on financing from high-net-worth individuals. It has also placed a premium on avoiding risks and diversifying the company's offerings, instead of being focused on a single product as is the norm in Europe.

Dr Salmons said: "In the past, we used to focus on our oncology product, but now, we've got many horses in the race, different ways to make products and generate income.

"As a company offering a technology platform, we work with other partners who have specific needs. So they have cells which they would like to use for some particular application; they come to us and we co-develop the product with them."

Prof Gunzburg agreed, saying: "The most important thing is to keep the company liquid and move the company forward, and you have to find a way to do that, whatever it takes."

Subsidiary in Thailand

The company's cash flow comes from its clients, who pay for every stage of their product development with Austrianova.

It also places an emphasis on minimising costs and keeping the company's burn rate low by outsourcing functions on a pay-by-use system; it does this with its financial services, business development and legal advice functions.

Austrianova has also set up a subsidiary in Thailand, which it fully owns. This unit concentrates on the manufacturing of medical products for global export and be off the ground by the end of the year.

Thailand was chosen because it is cheaper, more cost-efficient than Singapore, said Prof Gunzburg. The company hopes to begin manufacturing its pancreatic cancer product for further patient trials by the first half of next year.

Dr Salmons said: "Running a company is not just about making money. It is important to bring your investors a return, but it is also because there's a medical need out there for which we want to develop products that will actually help patients eventually."

Prof Gunzburg said: "We're building a company that should grow and be around in 10 years' time. We are trying to build something that is sustainable."

http://www.biotechsingapore.com/SingleNews.aspx?DirID=182&rec_code=961505

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