11 December 2006

CoDa Therapeutics Inc, a US pharmaceutical company linked to CoDaTherapeutics (NZ) Ltd, has secured a US$10 million venture capital investment that will enable it to conduct clinical trials of its novel wound care technology.

The investment by United States-based Domain Associates will be used by CoDa Therapeutics Inc to conduct an initial clinical trials for its wound-care technology, Nexagon, in New Zealand next year. The trials will be run through CoDaTherapeutics (NZ) Ltd. It is hoped that additional venture capital funding of up to US$10 million will be secured by year end.

Domain Associates’ investment offers significant economic and scientific benefits to New Zealand, says Colin Green, one of the scientists who developed Nexagon at the University of Auckland in collaboration with Dr David Becker at University College London. The two scientists are co-founders of CoDaTherapeutics (NZ) Ltd and CoDa Therapeutics Inc. “Conducting the clinical trials here in New Zealand involves a significant capital investment, and means we will build the capabilities of our researchers and drug development team in our country, as we continue to work with a team of highly qualified and experienced consultants in the US,” Green says.

If all goes well, Nexagon could be commercialised within five years, bringing financial and other rewards to the New Zealand company, he says. “Domain Associates is an experienced biopharmaceutical investor, and it and our management team will help us drive Nexagon through the clinical trials process and on to commercialisation.”

Preclinical studies have shown that Nexagon can dramatically improve healing, with a single application reducing tissue death, swelling, inflammation, scarring and time to wound closure. Nexagon works in a variety of tissue types including the eye, skin, spinal cord and brain, and no side effects have been observed to date.

The trials will be run by CoDaTherapeutics (NZ) Ltd, which remains the research arm of the business. Drs Green and Becker set up a second company, CoDa Therapeutics Inc, in the US in 2005 to spearhead commercial development of the product, in partnership with US investors. The company is led by biopharmaceutical executive Brad Duft, who has previously worked with Domain Associates. He also spent more than eight years as an officer of Amylin Pharmaceuticals, another company that was formed in the US based on discoveries made by a New Zealand inventor. Shareholders of CoDaTherapeutics (NZ) Ltd retain a substantial shareholding in the US company, and CoDaTherapeutics (NZ) Ltd will earn royalties from any sales of Nexagon.

Setting up the US company brought a raft of benefits, Green says. “Having a US-domiciled company made it easier to attract personnel and US venture capital, and gave us access to the clinical and investment skill base we needed to progress Nexagon. Working with Brad Duft gave us access to his experience and a highly skilled team of individuals who will be helping us to develop and run our clinical trials.”

The first clinical trial, a combination Phase 1/Phase 2 trial, is expected to begin late next year, with a report on the outcome of the trial expected in 2008. If all goes well with this trial, and subsequent trials, Nexagon could be commercialised by 2010.

The potential economic benefits to the New Zealand parties are significant, with royalties from Nexagon possibly running into hundreds of millions of dollars. Among those that stand to benefit are the University of Auckland, which also has a shareholding in CoDaTherapeutics (NZ) Ltd and whose facilities will be used for contract research. Green holds the W&B Hadden Chair of Ophthalmology and Translational Vision Research in the University’s Department of Ophthalmology.

There could also be additional benefits further down the track, as CoDaTherapeutics (NZ) Ltd still holds the rights to a second wound compound that is undergoing further preclinical work. This technology also has a number of applications, including for conditions such as stroke and heart attack.

Investment New Zealand investment manager Michelle Sullivan says CoDaTherapeutics (NZ) Ltd is a good example of how New Zealand can act as the research and development engine of a pharmaceutical group, focusing on developing products and conducting trials.

Investment New Zealand is the division of New Zealand Trade and Enterprise (NZTE) that worked with CoDaTherapeutics (NZ) Ltd to help it become “investment ready”, Sullivan says. NZTE was also instrumental in introducing Duft to Green – the two men first met in 2004 when Duft was visiting New Zealand as a guest of NZTE’s World Class New Zealand programme.

“Investment New Zealand’s support has been crucial to CoDa’s ongoing development, through its introductions to people with the required expertise and to potential funders, and its support within New Zealand,” Green says. “This has provided CoDa with the potential to add significantly to New Zealand’s pharmaceutical expertise and biotechnology base.”

For more information, please contact:

michelle.sullivan@investmentnz.govt.nz

+64 9 966 9205