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Posted: 2018-02-23 00:52:08

Posted February 23, 2018 11:52:08

An Australian cancer research firm that has seen success in peer reviewed trials with a drug assisting in the killing of cancer cells has caught the eye of a US pharmaceutical giant.

Merck has made a $A502 million acquisition bid for the ASX-listed Viralytics, which owns the drug Cavatak.

The drug was invented by Associate Professor Darren Shafren from the University of Newcastle and further developed at the Hunter Medical Research Institute.

Viralytics said Cavatak was particularly effective when used in conjunction with Merck's immune-boosting drug Keytruda.

The Australian firm's CEO Malcolm McColl said the drug was actually a virus that had been found to kill cancer cells.

Trials on more than 250 patients in the US had shown tumour reduction in a high percentage of cases.

"The virus preferentially infects cancer cells while it pretty much leaves healthy cells alone," Mr McColl said.

"We've done most of our work in melanoma, lung and bladder cancer, but it also has potential application across a range of other tumour types.

"We need to do a lot more work with patients, and that's of course what Merck will do, but the signs at this point are very encouraging."

"Merck has done a lot of diligence on the program both in terms of the clinical and manufacturing data and are obviously fully satisfied and convinced that there's a great potential for Cavatak to help cancer patients," Mr McColl said.

Changing face of treatment

Mr McColl said early clinical trials of the drug had found diminished side-effects than often seen with chemotherapy and radiotherapy.

"The way we tackle cancer now is quite different to ten years ago," he said.

"People are looking to turn the patient's immune system against the cancer and that's really what Cavatak is doing.

"I think there is the hope for cures in the future. What we're seeing now is responses in a good percentage of patients that can be very long lasting.

"So it's very very promising and there really are very rapid advances."

Australian biotechs could receive further attention

The board of Viralytics has recommended its shareholders accept the bid made by Merck.

The US company would then continue clinical trials with a view to ultimately getting Cavatak approved for use in cancer patients and developed into a commercial product.

Mr McColl said the majority of Viralytic's shareholders are institutional investors from the US and UK, and the deal with Merck could benefit Australian research.

"They'll be looking to reinvest and I think they'll be looking very favourably upon other Aussie biotechs because they've had success here," he said.

Topics: medical-research, research, cancer, stockmarket, newcastle-2300, united-states

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