PROFESSORS Steve Wilton and Sue Fletcher are two of Western Australia’s most celebrated research scientists with a string of awards to their names.

A little over a decade ago, they were focused on developing a breakthrough treatment for Duchenne muscular dystrophy (DMD).

Like most research scientists, they spent much of their time writing applications for research grants in the hope they would secure funding to continue their work.

They had no idea their work would lead to a big commercial success in the US and bring tens of millions of dollars back to researchers in WA.

“To be candid, I never anticipated it would turn out this way regarding royalties,” Professor Wilton told Business News.

Similarly, Professor Fletcher admits they were naïve when it came to turning their research into a marketable product.

“Nobody ever expected to get a commercial outcome,” she said.

Recently published financial accounts from US pharmaceutical company Sarepta Therapeutics reveal just how successful their work has become.

For the year to December 2025, Sarepta paid $US12.1 million ($17.3 million) in royalties pursuant to a licensing agreement it signed with The University of Western Australia.

The royalty payments started seven years ago and, since then, Sarepta has paid close to $100 million in royalties and milestone payments under the UWA deal.

Sarepta’s commercial success means the royalties will continue flowing.

It is a very rare example of medical research in WA generating major commercial benefits.

The benefits flow to several people and organisations, but the outcome could easily have been very different.

Professors Wilton and Fletcher worked together for more than two decades, mostly at the Perron Institute for Neurological and Translational Science, in tandem with roles at UWA.

The professors’ breakthrough was the development of ‘exon-skipping’ medicines that overcome specific genetic mutations that cause DMD.

Professor Wilton said he came up with the idea in 1996 while attending a conference in Lake Tahoe, Nevada.

“I saw how a researcher was trying to correct abnormal gene expression to treat a blood disease,” he said.

“The eureka moment was to induce abnormal gene expression in a defective gene; sort of two wrongs making a right.”

At that time, Professor Wilton explained, treating a relatively rare but serious disease such as DMD on a case-by-case basis was considered unviable.

He instructed UWA to give the patent to pharmaceutical giant GlaxoSmithKline, which thought the exon-skipping idea was “interesting”.

After a period of further testing, Glaxo lost interest.

“We [UWA] had to buy the patent back,” Professor Wilton said.

That cost about $20,000 to cover paperwork transfers, which in hindsight was money very well spent.

That was followed by the signing of a licensing agreement with AVI Biopharma, now Sarepta, in 2013

“Work kept going, trials started and it took off in the absence of any other viable treatments,” Professor Wilton said.

“I always smile when people consider me a commercial genius.”

The agreement did not guarantee any payments to UWA or the inventors.

Instead, payments were tied to development and regulatory milestones, and sales of products covered by the relevant patents.

Steve Wilton says the royalties have allowed him to make donations to support medical research. Photo: Murdoch Media

Sarepta has subsequently launched three drugs to treat DMD after gaining approvals from the US Food and Drug Administration.

Although a rare disease, DMD is the most common of the childhood muscular dystrophies.

Children affected by DMD suffer progressive muscle weakness and loss of muscle mass.

Without treatment, they would typically be wheelchair bound by around 12 years of age, and many would not survive beyond their mid 20s.

Boys who have received the Sarepta drugs in the US have maintained the ability to walk into their mid-to-late teens.

Funding fight

Reflecting on his career, Professor Wilton recalled the constant battle to secure funding and the stress of keeping a team together.

“For my first 23 years at UWA, I was on soft money,” he said.

“Funding for the research come from local MDA [Neuromuscular WA] and grants Sue and I were pulling in.”

The financial pressure came off in 2014.

“It was not royalty money but ongoing contract research for Sarepta that has taken that pressure off. And being offered a position at Murdoch University,” Professor Wilton said.

Professor Fletcher said Neuromuscular WA (formerly Muscular Dystrophy WA) was the main source of research funding in the early years.

Only a “small fraction” of funding support came from the National Health and Medical Research Council.

That is not surprising, as WA researchers typically get only about 5 per cent of NHMRC grants, which represents half the state’s per-capita share.

Professor Fletcher said they did better with the National Institute of Health.

Another supporter was the US Muscular Dystrophy Association (US MDA).

Beneficiaries

UWA, which employed the researchers at the time of the licensing deal, and the US MDA keep about 16 per cent of the royalty payments.

That would equate to about $16 million so far.

Business News understands nearly all of that is retained by UWA, which said the royalties it received helped support the commercialisation of further research.

The Perron Institute is another major beneficiary.

While not disclosing the amount, its annual accounts show that intellectual property income has progressively grown, from about $1 million per year up to 2018 to around $6 million per year.

Business News estimates it would have been paid about $25 million in Sarepta royalties so far.

That leaves large royalty payments to flow to the inventors.

While professors Wilton and Fletcher were the lead inventors, they ensured the five researchers who helped them were named as inventors on various of their patents and therefore receive a cut of the royalties.

Professor Fletcher said it was unfortunate that Neuromuscular WA did not receive direct distribution of funds from the royalties.

“It is their belief in us and the support of the muscular dystrophy community that delivered this success,” she said. 

“We were so naïve; we could have named them as contributors.

“We had no concept there was going to be a commercial outcome.” 

Neuromuscular WA chief executive Hayley Lethlean said the charity had invested more than $8 million in research during the past 25 years.

Of this amount, she estimates $6 million would have gone towards research initiatives led by professors Wilton and Fletcher.

Ms Lethlean was gratified the researchers receiving Sarepta royalties were among the major donors to Neuromuscular WA.

“It’s nice to know that our long-term investment into their research is providing a return directly back to the WA neuromuscular community,” she said.

Ms Lethlean said 90 per cent of the money that Neuromuscular WA spent on research came from the general public and community fundraising.

“The donations we receive back from researchers speak a thousand words, and we are very grateful to those who are reinvesting their royalties into our WA community,” she said.

Ms Lethlean noted that treatments originally supported by local funding were now available internationally but remained unavailable to the WA neuromuscular community.

“The royalties are coming in, which is good, but those treatments are still not accessible to patients here in WA,” Ms Lethlean told Business News.

She said a small number of drugs, each treating different types of muscular dystrophy, were being trialled across Australia. Clinical trial activity in WA was limited, however.

This was due to financial constraints within the health system and the significant resources required to run trials, including occupational therapists, physiotherapists and clinical supervisors.

Philanthropy

The royalty income from Sarepta has turned the lead researchers into generous benefactors.

Professor Fletcher continues to work with researchers at Murdoch University but is no longer in paid employment.

“It makes no sense to draw a salary,” she said.

A chunk of the money she gets from royalties goes back to Neuromuscular WA.

Ms Lethlean said this unrestricted funding supported a broad range of needs, including filling funding gaps and contributing to the organisation’s sustainability through administrative and wages costs.

Professor Fletcher also funds multiple scholarships and research programs at UWA and Murdoch, in what she calls an “increasingly dismal research funding environment”.

“The focus is on supporting early and mid-career researchers, who are the engine room of any research team,” she said.

Professor Fletcher is also a major donor to the West Australian Ballet and supports a number of environmental causes and women’s shelters.

Professor Wilton continues his research work as foundation chair in Molecular Therapy at Murdoch and deputy director of the Personalised Medicine Centre, a collaboration between Murdoch and the Perron Institute.

He has been told he is not allowed to retire but is stepping back “to let the younger and much smarter folk carry on”.

The royalties have given him a “very unexpected, but welcome, stable financial future”.

“I have been able to make donations to a variety of entities to keep medical research and care in rare diseases ticking over,” Professor Wilton said.

This includes Telethon, the Rare Care Comprehensive Centre at Perth Children’s Hospital, the Perron Institute, the Lyn Beazley Academy, and Neuromuscular WA.

He has also invested in some startup companies involved in medical research and a number of community groups, such as Jurien Bay Men’s Shed.

Perron Institute chief executive Steve Arnott said it used the Sarepta royalties to strengthen its capacity to pursue innovative research while consolidating established lines of investigation.

“To remain relevant and competitive globally we must match the world’s best in research efficiency and innovation,” he said.

“Ensuring the long term sustainability of the organisation is essential, as we continue advancing translational science to improve quality of life for the broader community.”

Mr Arnott said technology originally developed for DMD was being applied to a range of other conditions.

“This pioneering work has enabled broader use of the platform for rare diseases,” he said.

Biotech sector

A notable initiative was the launch of Black Swan Biotech, which is developing targeted therapies for motor neurone disease.

It is one of dozens of biotech and medical research companies in WA aiming to develop and commercialise their breakthroughs.

Using stock market valuations as a guide, several are making serious strides.

PYC Therapeutics, which has three clinical-stage drug development programs, is currently valued at about $1 billion.

Another notable company is Murdoch-based Orthocell, which has developed products for the repair of bone and soft tissue injuries.

Currently valued at about $200 million, it is one of just a few Australian companies to have gained approval from the FDA.

The chairman of intellectual property law firm Wrays, Gary Cox, said the medical research sector in WA had come a long way over the years.

“The level of sophistication were seeing now is significantly more mature than 15 years ago,” Mr Cox told Business News.

“There is a greater recognition of the commercial realities.”

The state government has stepped up its support for the sector.

Neurotologix, REX Ortho, VeinTech and CoraMetix are among companies to have received grants from the state’s Future Health Research and Innovation Seed Fund.

A recent initiative was the establishment of a Queen Elizabeth II Precinct Leadership Group, to oversee the development of health and medical research translation and innovation at the precinct.