The Australian Biotech Ecosystem and the Need for Early-Stage Funding

The Biotechnology Market in Australia

Health and medical research are vital sectors that have the capability to generate transformative outcomes in society. As such, biotechnology offers the most promising developments with improved therapeutics and treatments based on the latest technologies. For the last few decades, it has continuously made impactful contributions worldwide and is anticipated to grow over the next several years. Here, I focus on the Australian biotech ecosystem.

In Australia, the biotech market presents a shared industry-developed vision.

More than 192 life sciences companies are listed on the ASX ?and represent a market capitalization of approximately $233 Billion (~$170B in 2019). Furthermore, the Australian biotechnology sector has grown by 43 per cent since 2019 and 60 per cent since 2017. It is no wonder that the Australian biotech ecosystem is an attractive destination for firms seeking early-stage funding.?The improved investment and funding landscape is particularly favorable for early-stage biotech’s as there are substantial tax offsets and refunds for Research and Development (R&D) investments.?For instance, if your company has a turnover of less than?AUD 20 million per annum, you can claim for every 43.5% ?that you invest in R&D.?

Current Investment Landscape in Australia

Australia is a global leader in life sciences research ?and offers many investment opportunities, particularly in biotechnology. Investors can benefit from world-class infrastructure and a strong but flexible regulatory regime. This includes strong intellectual property (IP) protection, fast-tracked clinical trials, tax incentives and a supportive business culture for undertaking R&D. Furthermore,?Australia ranked fifth globally in biotechnology in?Scientific American Worldview?in 2016.

Australia also offers positive opportunities for startup ecosystems. Global firms can specifically reap the advantages of financial backing in the Australian biotech sector. A range of initiatives are targeted to support biotech research and product development through benefits-sharing agreements between?academia, government science organizations, and the industry . As such, global biotech companies should increase their insights and consider expansion strategies for the Australian market to develop their research. These businesses can easily access the system and perform early-stage trials in Australia, offering favorable market conditions to stimulate innovative entrepreneurship.

Building a Stronger Biotech Industry in Australia

While Australia ranks well on an international level, many regional neighbors are expected to outperform Australia within the coming years. Regardless, there are?ways to protect and improve Australia’s position ?as a top investment destination for biotechnology and remain competitive. These strategies involve:

-???????Better resourcing the Therapeutic Goods Association (TGA)

-???????Introducing more competitive intellectual property legislation

-???????Extending basic tax incentives

-???????Developing an appropriate venture capital system

-???????Better pooling of intellectual property (e.g., by establishing an organization to oversee)

-???????Increase in government funding

The Bottom Line

The Australian biotech ecosystem is on the up and can attract biotech firms, particularly those in early stages. Although there are still many factors that need to be considered for Australia to continue to be a force, Australia has a window of opportunity to reap the benefits of the natural competitive advantage we have in biotech: the Australian population is highly educated and possesses a rich entrepreneurial spirit; we have excellent infrastructure to support high quality research; and our political and regulatory environments are stable and credible. Fostering a culture of innovation and entrepreneurship will undoubtedly go a long way in ensuring Australia remains competitive.??

Copyright ? 2023 Lance Kawaguchi. All Rights Reserved.