SYDNEY - A groundbreaking new cancer drug with the power to shrink tumours could soon provide an alternative to chemotherapy.

Known as PENAO, the drug developed by a company called Cystemix at the University of New South Wales (UNSW) in Sydney, has shown extremely promising results in earlier testing.

On Wednesday, Chinese biotech firm, the Beroni Group, signed an agreement to fund phase two human trials and advance the clinical development of the potentially life-saving treatment.

"We know that this drug is going to benefit people," founder of the Beroni Group Jacky Zhang told Xinhua.

The collaboration between UNSW and the Tianjin based firm was made possible by the Torch innovation program to promote China-Australia ties in the technology space.

Zhang considers it a mission of the Beroni Group to promote cooperation between Australia and China in biotechnology, in order to draw on the widest possible range of medical expertise.

"We're great in Australia at coming up with novel ideas and novel therapies but we don't have the funding or the support or the expertise to take it from the laboratory through commercialisation to market," director of knowledge exchange at UNSW Warwick Dawson explained.

"Public funding of research only gets technologies to a certain point, but to prove efficacy in human trials we typically need private support."

"That's why today is so exciting, we have found a commercial partner who will enable us to hopefully get these technologies out of the laboratory and into the clinic for therapeutic use."

For the creator of the breakthrough medicine, Wednesday's event to confirm the next phase of testing was the culmination of 15 years of dedicated work.

"To take a molecule from that inception through all the development in the laboratory, through all the processes that you need to go through to actually test it in humans, it's been a hell of a ride!" Professor Philip Hogg said.

"It's an enormously challenging and difficult process, from really just an idea in the lab, now to really being able to test whether this idea is going to help patients."

Hogg explained that the way the drug works is by preventing tumor cells from dividing.

"Healthy cells in our body, they use sugar mostly to make energy," he said.

"Tumour cells are not fussed about making energy, what they want to do is make new tumour cells."

"So what this molecule that we've made does is it stops the tumor cells from metabolising the sugar in the way that they want and as a result, they can't divide and then if that block goes on for long enough they die."

The trial will likely be performed on 15-20 pancreatic cancer patients to find out whether it improves their survival and wellbeing.

"We are hoping this will form an effective therapy in a space where there really currently isn't any," Hogg said.