Investors in the digital health and biotech industries in Australia are not adequately informed about the quality of research being produced by local health sciences companies and academic institutions, according to specialist advisory firm Chrysalis Advisory. The firm’s managing partner, Nick Northcott, stated that Australian companies are largely self-regulating their clinical trials, with few independent governance structures to review the findings. Northcott advocates for an independent, impartial body with the right expertise to investigate matters and provide assurance to both investors and companies, as is the case in the UK, US, Japan, China, and Sweden. Stronger regulation would increase trust, investment, and lead to more translation of research into therapies. In 2020, Sweden’s research misconduct agency ran 46 research fraud investigations in its first year of operation, triple the number expected.
Chrysalis Advisory specializes in the health sciences sector, advising companies on establishing the appropriate governance structures, identifying key assets, and how to commercialize them. The firm also invests and sits on the board of some companies, including medtech developer Eudaemon Technologies, disinfectant and sanitiser creator MicroSafe Australia, and addiction brain-training start-up Swipe. Northcott warns that many digital health startups have been founded by entrepreneurs with no experience in the health sector and are bringing products to market without completing clinical studies to robustly assess their efficacy. He notes that 44% of the 224 digital health startups examined in a recent study by researchers at Cambridge University, Johns Hopkins, and Rock Health had a clinical robustness score of zero, meaning they had not done any clinical trials or made any regulatory filings with relevant authorities such as the US Food and Drug Administration. Situations like Pfizer’s reduced takeover offer for ASX-listed digital health firm ResApp and the Queensland-based QIMR Berghofer Medical Research Institute’s payment of $3.4 million in grants after the institute’s head of immunology in cancer was accused of research misconduct highlight the need for an integrity ombudsman, according to Northcott.
