While doing some research, I came across an article in Nature Biotechnology which contained a sentiment that may help us to understand why Benitec ($OTCPK:BNIKF, $OTCPK:BTEBY) has found it difficult to win deals with big pharma. The article said,
For one thing, big pharma's business model is very different from what is needed to translate cell therapies into practice. The pharma model involves mass manufacturing of products that can be stored in warehouses and distributed through pharmacies to large markets of patients. Cell therapies, on the other hand, may be highly individualized, are incompletely characterized, are expensive to produce, have a short shelf life and onerous supply chain, must be transplanted into patients by skilled healthcare workers and have complex regulatory requirements. These challenges, along with a dearth of cell-therapy successes, have kept away investors, too.
When one considers that ddRNAi is just as much a gene therapy technology as it is a RNAi therapy, it is not difficult to overlay this description of big pharmas interests on Benitec's lack of deal making.
Perhaps Benitec should have scored a deal by now but the article does put some context around the company's difficulties in negotiating with the large pharmaceutical companies.
The article also points to the role of governments in the support of cell therapy development. When one considers that Benitec is an Australian company that was spawned from the public sector but has received no government funding since becoming a public company, then this also puts some perspective on their situation. The company has described itself as the only gene therapy company in Australia and this gives us a picture of the gene and cell therapy industry in that country and the amount of government and investor support that the sector receives.
Benitec's licensee, Calimmune, has received government funding through the CIRM. It is also working closely with Johnson and Johnson ($JNJ). Maybe these partnerships will assist Calimmune to become commercially successful? If they do, then some of that success should rub off on Benitec, or just maybe the results from TT-034 will be so impressive that big pharma will plunge into ddRNAi regardless? Whatever happens, it is clear that big pharma needs to get its thinking into step with the new paradigm of personalized medicine if it is to be a player in this developing field.
Disclosure: The author is long BNIKF.
Additional disclosure: This article is not intended as investment advice. Readers should do their own research.