By SIMON COLLINS
Once upon a time, when doctors at a publicly funded medical school discovered a cure for a disease like multiple sclerosis, they published their findings in reputable journals for the benefit of the world.
Those days seem far away this year, as Neuronz, a company founded by doctors at the University of Auckland School of Medicine, fights a former consultant in the courts over rights to a discovery the consultant helped to make.
Yesterday, Justice Hugh Williams found the consultant, Lloyd Tran, in contempt of court for taking hundreds of files of confidential Neuronz information, refusing to return them and then hiding the information from officials who came to retrieve them from his home.
The court has not yet decided the main issue in the case - whether Tran used his position at the company to steal its intellectual property rights to another drug.
But yesterday's decision casts doubt on his dramatic claims that Neuronz suppressed evidence that an earlier version of its alleged wonder drug was causing brain damage in rats.
For Neuronz, the stakes are incredibly high. If the company is right, and it really has found a drug which helps people ward off the worst effects of multiple sclerosis - and other brain diseases such as Parkinson's, Alzheimer's and even the natural processes of old age - then that patent could be worth billions of dollars.
But it is a huge gamble. Quite apart from the ethical considerations, this business is extremely risky. Most things that look like cures when tried in rats or sheep fail to have the same effect in human beings, or have to be abandoned because of unexpected side-effects.
That is why most new medicines are developed by massive multinational pharmaceutical combines such as GlaxoSmithKline, which employs 100,000 people and spends $10 billion a year on research to earn annual sales of $65 billion. It can afford flops, because its few successes more than make up for them.
Neuronz has no such luxury. It has 50 staff and has raised just over $15 million so far to develop a handful of potential drugs. It needs a further $15 million in the next two years to try out the compound it has discovered on its first human patients, and at least as much again a year or so after that to extend the tests to a wider group, probably in Australia because there are not enough suitable patients in New Zealand.
Because it depends so much on so few potential drugs, it is easy to imagine the reaction of Neuronz' chief scientific officer, Dr Peter Gluckman - better known until last year as the dean of the Auckland medical school - when he was confronted by Tran, whom he had employed as a consultant to develop drug-testing procedures that would meet the legendarily high standards of the US Food and Drug Administration (FDA).
Tran told this newspaper on February 18 that when he checked the experiments that had been done on rats with the first compound intended for human testing, known as GPE, he found that they had failed.
"The first experiment was done by a masters student. The results were promising," he said.
"They repeated the experiments. Most of them did not work - they caused brain damage to the rats.
"When I checked the notebook of the masters student, he didn't comply with good laboratory practice, such as temperature control, equipment calibrated."
Tran said he took these facts to Gluckman. He expected that Gluckman would halt the plan to raise more money to do human trials and order more testing on rats first. He did not.
"Peter said, 'This could take 10 months and the company could be bankrupt by then'. He said, 'If I don't have the money, how can I feed you?' He told me, 'Don't tell anyone. If you do that you are in deep trouble'. A few days later they terminated my contract."
Gluckman flatly denies this. He says Tran was sacked because of a dispute over the intellectual property (IP) to another compound, cyclopropylglycine.
"He was working on the patent for us. He then went and filed it [a patent application in his own name].
"The issue is, does the employer own the IP? Yes, they do."
Gluckman says Tran left Neuronz on November 7 or 13 last year, but the alleged failure of GPE in rats did not appear in his legal affidavits until February or March. In other words, by Gluckman's account, it was a story concocted by Tran to boost his chances in the dispute over intellectual property by blackening Gluckman's integrity.
Tran, a Vietnamese man in his forties, left the country soon after visiting the Herald in February and has not responded since to emails or attempts to contact him through friends. After his home was searched by High Court order, he took fright.
"They followed my son," he said. "I go shopping and a car follows me. They walk behind me because ... I fear for my life."
He confirmed in February that his main dispute with Neuronz was over intellectual property.
"I recognised the company had some problems with a drug so I carried out independent study and came up with a new molecule," he said.
"They wanted to use my drug, so they went to my home to take all those documents away. They took away the evidence that the [GPE] drug did not work. Luckily, some of the documents were left with my lawyer."
He said he had alerted both the Serious Fraud Office and the FDA that Neuronz might be about to seek approval for human trials of GPE without disclosing that it had caused brain damage in rats. He said the SFO "started investigations in mid-January".
An SFO complaints officer, John Strawbridge, said on April 10: "I know the background to what you're talking about. I haven't heard from him [Tran] for ages either. You can probably interpret what that means."
Gluckman says: "He made spurious allegations and we had to deal with them. The SFO wrote back and said there was no substance."
He confirms that Tran also contacted the FDA, and that the FDA then spoke to Neuronz. But Gluckman says Neuronz is "doing everything to FDA standard" and has made enormous progress since the early experiments Tran audited.
Yesterday's court decision largely supports Neuronz' version of events. On Tran's main allegations, it says:
* Tran claimed he worked on a Neuronz application to the FDA to test the drug on humans but the company said the application was only for an earlier stage of development. "The evidence supports that criticism."
* Tran claimed he was about to submit the application when he found out about the rat study data. In fact, it seems likely Tran knew the company was not going ahead by this stage "and the variable test results did not show (GPE) was unsafe but needed further analysis, an analysis which has now successfully been done".
* Tran claimed he was pressured by Neuronz to submit the application, but the evidence suggests he pressured Gluckman and other staff.
* On Tran's claim that Gluckman tried to keep the rat data secret, "the evidence suggests that the rat study data was discussed openly at the meetings ... as was the need for further analysis and that it was not scientifically appropriate to include exploratory data of that sort in [the] application".
Neuronz was founded in 1995 by the university's commercial arm, Uniservices, to commercialise the brain research that Gluckman has led at the university with $8.5 million in Health Research Council funding over the past 15 years.
Gluckman says the company is based on "two bits of science".
First, his group discovered that when the brain is injured by an accident or a stroke, the brain cells take between a few days and a few months to die. This provides an opportunity for doctors to step in and try to save those cells.
Second, the group identified a compound, created naturally in the body, called insulin-like growth factor 1 (IGF-1), which appears to help brain cells regrow after an injury.
But IGF-1 is big. Made up of 71 amino-acids, it is too big to cross the blood/brain barrier, a natural defence against toxic substances from the blood getting into the sensitive brain cells. So it is impossible to get extra IGF-1 into the brain by a normal injection or pill.
In the late 1990s, Neuronz scientists found a solution to this problem. They noticed that IGF-1 breaks down naturally in the brain into one large compound of 68 amino-acids and a smaller compound of just three amino-acids called glycine-proline-glutamate, or GPE.
Unlike IGF-1, GPE is small enough to get through the blood/brain barrier. Yet, according to Gluckman, it seems to have all the brain-cell-restoring properties of IGF-1 itself.
He agrees, as Tran said, that initial animal test results were "inconsistent". Sometimes GPE rescued brain cells, sometimes it failed.
Finally, last year, a young scientist finally had "a brilliant idea" of changing from a single injection to a continuous infusion to keep the level of GPE constant.
Once the new technique was perfected, around the time Tran left last November, the results in rat tests improved dramatically. Graphs show the rate of brain cell death rose after the rats were given strokes, then dropped back by about three-quarters when they were given GPE.
"Since December we have not had one failure," says Gluckman. "It is unique. I've been in this business for 20 years and never seen anything like it."
Neuronz is now commissioning a laboratory in Pennsylvania to do independent studies in rats and another rodent species, starting at the end of this month.
At the same time, it is applying this month to the Ministry of Health's standing committee on therapeutic trials for approval to test GPE on human stroke patients through Auckland University's clinical trials unit from September.
Neuronz chief development officer Elizabeth Hopkins says the standard FDA process will be used: "First give it to three patients; if none have adverse effects, continue the dose; if still no adverse effects, give it to another three patients; and so on up to 15 to 30 patients.
"We will be able to test whether GPE crosses the blood/brain barrier in humans," Hopkins says.
If all goes well, Stage 2 will be a bigger trial, probably in Australia, this time using cardiac artery bypass patients who have surgery at planned times so their brain functions can be measured before and after. This could start next March.
If those first two stages succeed, Stage 3 will involve testing GPE on 500 to 1000 patients in perhaps 25 centres around the world. Typically, this stage costs around US$15 million ($32 million), and Hopkins says Neuronz will license it out to a big pharmaceutical firm or someone else who can afford it.
"The earliest we could be into Phase 3 is mid-2004, probably the end of 2004. Phase 3 will take two years, and the FDA a further year to review it," Hopkins says. That means the earliest Neuronz could start actually earning money is late 2007.
Meanwhile, Stephen Wealthall, a paediatrician who worked with Gluckman for 20 years until being made redundant in 1998, is alarmed at the way Tran has been treated.
He says Tran and his family "are on the verge of the abyss". The court case has ruined them financially, and Tran "has given up hope".