PharmAust to wind up Epichem following DNDi contract loss 

Clinical-stage cancer therapeutics company PharmAust has announced that it is putting wholly-owned subsidiary Epichem, a contract research organisation, into voluntary liquidation.

In a statement on Tuesday, ASX-listed PharmAust explained that a big contributor to Epichem’s success was a long-standing research contract with the Drugs for Neglected Diseases Initiative (DNDi.) This was not renewed past March this year, and PharmAust had been covering Epichem’s losses since then.

Bentley-based Epichem has won multiple Western Australian export awards and according to one company profile has served customers in 35 countries.

David Hodgson and Andrew Hewitt, of Grant Thornton Australia have been appointed liquidators, following a review by eternal advisors on whether to restructure, recapitalise or exit Epichem.

PharmAust explained that recent years had seen a shift in the local pharmaceutical industry since COVID-19 towards overseas operation, largely due to the costs of running a contract research organisation in Australia, with many CROs electing “to shift or expand their manufacturing facilities, research and development centres, and clinical trial operations” to lower-cost nations.

“It follows that this shift has led to a decline in local opportunities for contracts and a reduction in domestic employment opportunities within the industry,” it said. 

“While Epichem has remained operational through these times, the increasing overseas presence raises challenges in terms of securing ongoing contracts when competing against overseas CRO’s who can operate at a lower cost. 

“This can be seen through the loss of Epichem’s longstanding contract with DNDi. Funding for the research in this  sector has dried up in Australia with much of the work being awarded to overseas CRO’s who can produce similar work for a reduced cost.”

According to its website, Epichem was founded in 2003, originally operating out of Curtin University “to solve difficult synthetic chemistry problems and to provide jobs for home grown PhD organic chemists.”

It added that decision was not expected to impact on PharmAust’s operations, and that the company would be able to focus all its resources “on the clinical development of monepantel  in human diseases and the canine anti-cancer and licensing activities.”

Picture: credit twitter.com/epichem