Why Patents Are The Lifeblood Of Biotech Companies
LAS VEGAS, NV / ACCESSWIRE / April 25, 2016 / Which brings me to Propanc Health Group Corporation (OTCQB:PPCH), an emerging healthcare company focusing on development of new and proprietary treatments for cancer patients suffering from solid tumors such as pancreatic, ovarian and colorectal cancers, has been on a tear filing patents for their PRP treatment over the past year, the company currently has five individual patents. These patents as noted above could pay off handsomely for PPCH and its investors.
Why are patents so important for companies in biotech? In the first place, biotechnology is probably one of the most research-intensive industries. Biotechnology companies generally invest a significantly higher proportion of their revenues in R&D (often between 40% and 50%). As in any research-based industry, the protection of research results becomes a major issue.
A second important point to bear in mind about the biotechnology industry, is that there are generally very high costs for the development of new products and processes, but relatively low costs of imitation. Almost any technology or compound can rapidly be reverse engineered. Adequate IP protection becomes a means to ensure that biotechnology companies can appropriate their R&D results and reduce the likelihood of imitation by competitors.
Finally, a point that derives from some of the above is that for some biotech companies intellectual property rights are actually the final product. It is not uncommon, in fact, to find biotechnology companies that develop innovative inventions, patent them and then license them to larger companies that have the resources to take the product to market. Such companies may actually never sell a product in the traditional sense of the word but base their revenues on their ability to develop, protect and license innovations.
Just last week Propanc Health Group (PPCH) announced the filing of two more patent applications in the United States regarding new compositions of its lead product, PRP, for treating cancer. The inventions summarize different combinations of the two proenzymes, trypsinogen and chymotrypsinogen, which synergistically enhance their anti-cancer effects, compared to when used in a one to one ratio, or as singular agents.
The combinations are in addition to the preferred combination for PRP, and supplements the Company's patent position across a broad range of cancers.
"When confirming PRP's effectiveness across a broad range of cancers, we also confirmed a synergistic response between the two proenzymes to the majority of cancer cell lines tested," said Dr Julian Kenyon, Propanc's Chief Scientific Officer. "We also noticed that for some cancer types, more than one combination proved to be effective, which we believe is patentable. This is extremely important, because it not only confirms the utility of our lead product, PRP, for many different cancers, but also enables us to incorporate other effective combinations as well. In total, we now have five individual patents covering PRP and also expect to file further divisional applications in various jurisdictions."
James Nathanielsz, PPCH's CEO added "New, potentially patentable discoveries have also been made regarding the anti-cancer effects of proenzymes which we believe could have significant implications in the cancer treatment process. We look forward to continuing to build on this research. Furthermore, we are now preparing for what is a significant period for the Company as we turn our attention to the upcoming scientific advice meeting, preparing orphan drug designation applications and developing a strategy to engage licensing partners interested in our R&D programs, as we head towards early stage patient trials."
The Company is soon to meet with the MHRA (Medicines and Healthcare Products Regulatory Agency) to discuss formal preclinical and clinical development activities for PRP. Management also intends to apply for orphan drug designation for pancreatic and ovarian cancers in the US and EU in the near future as well, should they satisfy the necessary criteria.
Biotech investors looking for a company that could bring massive returns need look no further, the impressive intellectual property portfolio the company is building alone suggests they are worth much more than their current market cap.
As the biotech industry continues to bounce back from its rough stretch between July and February PPCH seems like one of the best opportunities to take advantage of.
A few other small cap biotechs that are receiving great investor interest recently include:
Eleven Biotherapeutics, Inc. (EBIO), Aratana Therapeutics, Inc. (PETX), Array BioPharma Inc. (ARRY), PTC Therapeutics, Inc. (PTCT), and Raptor Pharmaceuticals Corp. (NASDAQ:RPTP).
Why are patents so important for companies in biotech? In the first place, biotechnology is probably one of the most research-intensive industries. Biotechnology companies generally invest a significantly higher proportion of their revenues in R&D (often between 40% and 50%). As in any research-based industry, the protection of research results becomes a major issue.
A second important point to bear in mind about the biotechnology industry, is that there are generally very high costs for the development of new products and processes, but relatively low costs of imitation. Almost any technology or compound can rapidly be reverse engineered. Adequate IP protection becomes a means to ensure that biotechnology companies can appropriate their R&D results and reduce the likelihood of imitation by competitors.
Finally, a point that derives from some of the above is that for some biotech companies intellectual property rights are actually the final product. It is not uncommon, in fact, to find biotechnology companies that develop innovative inventions, patent them and then license them to larger companies that have the resources to take the product to market. Such companies may actually never sell a product in the traditional sense of the word but base their revenues on their ability to develop, protect and license innovations.
Just last week Propanc Health Group (PPCH) announced the filing of two more patent applications in the United States regarding new compositions of its lead product, PRP, for treating cancer. The inventions summarize different combinations of the two proenzymes, trypsinogen and chymotrypsinogen, which synergistically enhance their anti-cancer effects, compared to when used in a one to one ratio, or as singular agents.
The combinations are in addition to the preferred combination for PRP, and supplements the Company's patent position across a broad range of cancers.
"When confirming PRP's effectiveness across a broad range of cancers, we also confirmed a synergistic response between the two proenzymes to the majority of cancer cell lines tested," said Dr Julian Kenyon, Propanc's Chief Scientific Officer. "We also noticed that for some cancer types, more than one combination proved to be effective, which we believe is patentable. This is extremely important, because it not only confirms the utility of our lead product, PRP, for many different cancers, but also enables us to incorporate other effective combinations as well. In total, we now have five individual patents covering PRP and also expect to file further divisional applications in various jurisdictions."
James Nathanielsz, PPCH's CEO added "New, potentially patentable discoveries have also been made regarding the anti-cancer effects of proenzymes which we believe could have significant implications in the cancer treatment process. We look forward to continuing to build on this research. Furthermore, we are now preparing for what is a significant period for the Company as we turn our attention to the upcoming scientific advice meeting, preparing orphan drug designation applications and developing a strategy to engage licensing partners interested in our R&D programs, as we head towards early stage patient trials."
The Company is soon to meet with the MHRA (Medicines and Healthcare Products Regulatory Agency) to discuss formal preclinical and clinical development activities for PRP. Management also intends to apply for orphan drug designation for pancreatic and ovarian cancers in the US and EU in the near future as well, should they satisfy the necessary criteria.
Biotech investors looking for a company that could bring massive returns need look no further, the impressive intellectual property portfolio the company is building alone suggests they are worth much more than their current market cap.
As the biotech industry continues to bounce back from its rough stretch between July and February PPCH seems like one of the best opportunities to take advantage of.
A few other small cap biotechs that are receiving great investor interest recently include:
Eleven Biotherapeutics, Inc. (EBIO), Aratana Therapeutics, Inc. (PETX), Array BioPharma Inc. (ARRY), PTC Therapeutics, Inc. (PTCT), and Raptor Pharmaceuticals Corp. (NASDAQ:RPTP).