Leading pharmaceutical company Merck has completed its buyout of virotherapy firm Viralytics, founded in Newcastle by Associate Professor Darren Shafren.

Following the announcement in February of one of the biggest biotech transactions in Australian history, world-leading pharmaceutical company MSD (a subsidiary of Merck) has acquired virotherapy firm Viralytics, founded in Newcastle by Associate Professor Darren Shafren.

Twenty years ago, the University of Newcastle and Hunter Medical Research Institute (HMRI*) researcher never anticipated that what began as an investigation into the common cold would lead to development of the anti-cancer therapy, CAVATAK®.

“When I first started with this project, it was focusing on a cure for a common cold and not at all looking into cancer. There were a few serendipitous events that led us down a different pathway, which will now hopefully be something that benefits patients with fairly advanced cancers,” Associate Professor Shafren said.

The immunotherapy compound, CAVATAK, is a form of common cold virus which infects and kills cancer cells by awaking the immune system and encouraging anti-cancer activity.

“CAVATAK is a bioselected common cold virus that targets cancer cells more preferentially than normal cells. When it binds to a molecule that seems to be overexpressed on cancer cells, it undergoes an infection in that cell and makes the cancer cell look more foreign to the immune system.

“Normally a lot of cancers escape our immune system because they pretend to be part of us, but the CAVATAK virus now makes it look different, triggering a reaction from the immune system,” Associate Professor Shafren explained.

The virotherapy began gaining substantial momentum in 2014 after securing $27.1 million in funding to carry out international trials. More recently, American pharmaceutical giant MSD came on board after realising the potential benefits CAVATAK could have in conjunction with their antibody treatment KEYTRUDA®.

“CAVATAK helps our immune system identify cancer cells, while KEYTRUDA elevates the level of intensity of the immune system, so together they seem to have substantial benefit of recognising and attacking cancer,” Associate Professor Shafren said.

KEYTRUDA is currently being assessed in America, Australia and the United Kingdom in lung cancer, metastatic bladder cancer and melanoma, with hopes that ongoing results will reveal a significant benefit of using CAVATAK to increase the efficacy of KEYTRUDA.

“The merger is a really positive result and a great vindication of all the hard work that the staff, clinicians and patients have put in. To have a large pharmaceutical company utilising all their skillsets to help push this through for potential approval will really increase the impact of this treatment,” he added.

University of Newcastle Senior Deputy Vice-Chancellor (Research and Innovation), Professor Kevin Hall, said the historic buyout demonstrated the world-class medical research potential being cultivated in the Hunter region.

“This milestone achievement by Associate Professor Shafren has shone an international spotlight on the research excellence of our institution, further highlighting the region’s commercial capabilities and their global application,” Professor Hall said.

“Supervising a team of 20 scientists, Associate Professor Shafren’s expert leadership has also built high-level commercialisation expertise amongst our next generation of University of Newcastle innovators,” he added.

The historic $502 million acquisition of Viralytics began as $25,000 in seed funding from the Greater Building Society when Associate Professor Shafren sat next to their general manager during the inaugural HMRI gala dinner in 1999.

“At that time it was difficult to get funding and this was an out-there project. I mentioned to the general manager at the time how hard it was to get funding and he said ‘we’ll see about that’.

A few phone calls and a couple of weeks later we started a great relationship that continued for the next few years, which was critical to compile the initial mass of clinical data that allowed us to push it forward with biotechnology companies,” Professor Shafren said.

HMRI Director, Professor Michael Nilsson said they were proud to have played a role in progressing a good idea into a commercial reality.

“Breakthrough discoveries like this come to fruition through hard work and access to a fertile research environment, with the support of donors. HMRI facilitates all of these key components to address serious health conditions and enable innovative therapies like this to be developed,” he said.

Following two decades of the pursuit for a product that can benefit patients’ survival and quality of life, Associate Professor Shafren has his sights set firmly on staying in the cancer immuno-oncology space and developing further products or combinations that will benefit patients.

“There’s still a lot of unmet need. KEYTRUDA drugs currently have response rates in the order of 30 to 50 per cent and we’d love to work with the MSD team to be able to bring that up to the 60th or 70th percentile,” he said.

Keen to share his experience and open more doors of opportunity for students and researchers in Newcastle, Associate Professor Shafren encourages others pursuing the same path to never give up.

“Don’t give up your passion. At the end of the day, good science is one thing but sometimes you need a little bit of good luck as well. Our driving force was to develop something that could help patients. When you have a whole team working collectively toward the same objective, it’s easier to stay enthusiastic and persistent about your goal,” he said.

* HMRI is a partnership between the University of Newcastle, Hunter New England Health and the community.