This tiny Aussie company dropped bombshells we shouldn’t ignore
This small ASX-listed Aussie company operates in a high stakes arena and has caught the eye of the US. They’ve just made three big announcements we shouldn’t ignore, writes Craig Dickson.
Island Pharmaceuticals (ILA) isn’t a name most people would associate with global security or biodefence.
Until recently, this small Aussie biotech was better known for their work on an antiviral drug for dengue fever and Zika virus.
But over the past six months, the company has shifted into a far more high-stakes arena: developing a potential countermeasure to a deadly viral outbreak, including those weaponised in biological warfare.
It’s a big move for a small company and the United States Food and Drug Administration (FDA) has just given a key go ahead to ILA.
ILA have had three big announcements in the past two weeks and we shouldn’t ignore them.
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Galidesivir and ISLA-101
At the centre of ILA’s strategy is a drug candidate called Galidesivir, an antiviral originally tested in the United States.
Importantly, the drug was tested against Ebola and Marburg – two viruses with very high fatality rates and both deemed as highly likely candidates for use as biological weapons.
ILA has also been developing ISLA-101, a repurposed drug with potential against mosquito-borne viruses such as dengue and Zika, two serious viruses that are rampant in developing countries and are slowly spreading throughout the world.
Results from human trials are encouraging and ILA is planning the next stage of testing.
Why Galidesivir Matters
Despite ISLA-101 being the more advanced asset, Galidesivir is the drug that has generated the most interest in ILA, and with very good reason.
Previous research (conducted before ILA was involved) suggests the drug has activity against multiple high-risk viruses in pre-clinical trials (not human testing as testing in humans using something as deadly as Ebola would be highly unethical).
Galidesivir even received previous US government support due to the kinds of threats it could potentially address.
Against Ebola, the pre-clinical tests (not human testing) showed 100 per cent survival rate compared to 0 per cent in the placebo group and in Marburg the pre-clinical tests (not human testing) showed 94 per cent survival rate compared to 0 per cent in the placebo group.
These results are incredibly promising and it’s no wonder the FDA has taken notice.
The Two FDA Bombshells
On November 17, ILA dropped two bombshells.
1) The FDA confirmed the Animal Rule pathway is appropriate for developing a countermeasure like Galidesivir against Marburg
2) The FDA confirmed Galidesivir qualifies for a Priority Review Voucher
The Animal Rule
Giving humans a lethal virus to then test if a new drug may work is deemed incredibly unethical, and rightly so.
This is where the Animal Rule comes in.
For most drugs, the clinical trial stage generally takes three to six years, sometimes longer.
By qualifying for the FDA Animal Rule, ILA do not have to take Galidesivir through the years of human clinical trials for Marburg.
Under the Animal Rule, drugs like Galidesivir undergo two pre-clinical studies similar to the ones already undertaken and one study in humans for the safety of the drug, not to see if the drug actually works in humans (the unethical part).
The Animal Rule cuts the time for testing the drug down to half or under that of the usual clinical process. This is a big deal in the biotech space.
The Priority Review Voucher
The FDA’s Priority Review Voucher program rewards companies that develop drugs for neglected or high-risk diseases.
A voucher shortens the review process for potential drug approval from about 12 months to six.
This gives the company a major commercial and strategic advantage.
Of significant note is that vouchers can be sold.
Big pharma companies in the US buy these vouchers so they can use them for their own drugs to get approved fast in crowded markets.
These vouchers have recently sold for around $USD150m.
The market cap of ILA is about $AUD130m.
That’s a big potential funding payday for ILA.
Is ILA Legit?
Fair question given they are a small biotech on the ASX wanting to get involved in US biodefence.
The third big announcement backs up the FDA and shows ILA are now seriously within the biodefence fold.
ILA have been accepted into the Medical Countermeasures Coalition (MC2). MC2 is an international alliance to advance the development, accessibility and deployment of medical countermeasure against biological threats.
The group includes industry giants like CSL and Roche Group, and suppliers to the US Strategic National Stockpile.
ILA are clearly in the right space.
The Opportunity
Like building a mine, drug development is rarely an easy road.
ILA have an extremely experienced management team who have been assessing, testing and bringing drugs to market for many years.
They’ve done this before.
Nothing is ever guaranteed and of this we must be mindful, but Galidesivir starts well ahead of many drug candidates because it comes with significant data that has shown excellent survival results in past testing.
This is something not often seen, especially in a small ASX listed biotech company. Plus their speed to market is drastically increased due to the recent FDA ruling.
For investors, the drawcard is obvious: if ILA can demonstrate real-world evidence that Galidesivir is safe, effective and ready to manufacture at scale, the company could find itself supplying a niche, but important product for national stockpiles.
In biodefence terms, “niche” doesn’t mean small.
Governments regularly spend hundreds of millions preparing for low-probability, high-impact events — the kinds where having the right drug ready on a shelf can change the course of an outbreak.
ILA’s share price has had a run over the last month, and fair enough.
I’m looking for a little cool off to get things settled before the next bit of news.
With the first Galidesivir trial potentially starting in Q1 2026, you can bet the US government is watching. Are you?
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Originally published as This tiny Aussie company dropped bombshells we shouldn’t ignore
