Sulfagenix, Inc., a United States based biotech, was able to tap into Australia’s world class research and development (R&D) facilities and expertise through the assistance of Australia’s R&D tax incentive.

Sulfagenix’s novel compound, SG1002, is a precursor to a natural-occurring molecule, hydrogen sulphide. Hydrogen sulphide possesses cytoprotective properties that makes it an ideal candidate for treatment of cardiovascular disease. Early stage research on SG1002 showed that it was able to decrease infarct size, improve cardiac function, increase angiogenesis, down regulate oxidative stress and decrease inflammation. Patients with heart failure are reported to have lower levels of hydrogen sulphide in their blood, even though sulphur is available naturally in the diet. Sulfagenix identified SG1002 as a potential treatment for heart failure by increasing the blood levels of hydrogen sulphide.

After considering possible locations around the world, Australia was selected as the destination for its first in man trial because of its straight-forward regulatory process and outstanding cardiovascular clinicians. As such, Sulfagenix Australia Pty Ltd was established for the purpose of developing SG1002 in Australia for the global market. In Australia, heart disease is the leading cause of death, affecting 4% of the population over the age of 45. Aboriginal and Torres Strait Islander populations suffer an incidence of heart failure 2-3 times that of the general population.

Sulfagenix was able to access the Australian R&D tax incentive program to conduct its first in man trial. The R&D tax incentive was introduced in 2011 and offers an attractive scheme where eligible applicants receive a cash refund of up to 45 % of their R&D activities. Sponsors with turnover higher than $20 million are eligible to claim a non-refundable 40% tax offset.

Sulfagenix worked closely with its tax advisors in Australia (Grant Thornton) to set up the Australian entity, and to ensure Sulfagenix was in compliance with the regulations concerning the R&D tax incentives. This included the engagement of an Australian Director and working with the R&D specialist at Grant Thornton to draft and file an Advanced Finding document with the tax authority.  From a financial point of view, a program where the estimated cost is more than $200,000 per year, this program can be very attractive.

The Phase I dose escalation trial in healthy volunteers and heart failure patients was conducted by Nucleus Network, a leading phase I unit. George Clinical was responsible for study management, clinical monitoring, data management, pharmacovigilance, medical monitoring, statistical analysis and medical writing.

The study was completed successfully in 2014.  The product was extremely well tolerated and although safety was the primary endpoint and very few subjects were enrolled in the trial, there is encouraging data suggesting a benefit to heart failure subjects.  Sulfagenix is now planning a small placebo controlled, double blind Phase IIa study in Australia to determine the safety of chronic administration (3 months) and to also assess clinical benefit to heart failure patients.