The community of Australian life science innovators are clever, focused and driven. Yet many fail to achieve their commercial goals. Sometimes this because of the science – which is not yet sufficiently developed for the commercial path.
Sometimes it is inexperienced management or governance. But usually, the key barrier is access to capital. Australia has talent and good ideas aplenty, but our small economy and lack of risk capital produces challenges not seen in bigger economies, like the USA. “Yes,” I hear you saying.
What about other smaller nations? It is true that some Scandinavian countries and Israel perform very well. But when the culture, government structures, location and many other factors are taken into account, the comparisons with Australia – although very useful– are not equivalent.
In order to optimise our performance and deliver both social and economic benefits, the current conversation at the Federal level is well directed. We need an approach that is system-oriented; that considers the international exemplars and how they can be applied in the Australian context, and pays attention to capital access.
“The strength of biotechnology for our economic future is clear, but to realise its vast potential will take radically new thinking and an entrepreneurial attitude.”
When the Biomedical Translation Fund (BTF) was announced as part of the Turnbull Government’s National Innovation and Sciences Agenda (NISA) in December 2015, it was welcomed by AusBiotech as a game-changing package that will transform Australia’s ability to commercialise.
The biotechnology and medical technology sectors are particularly excited by the ability of the program’s investment to be a multiplier and make available much-needed capital to translate our research from universities and medical research institutes into products and services – including medical therapies and cures, medical devices, digital heath solutions, diagnostics and vaccines.
Fund manager, GBS Ventures, which specialises in the life sciences has invested $400 million in 30 companies in recent years and reports it has attracted $5 in private money for every $1 of public money invested.
So far as this can be extrapolated to the new fund, the BTF could be the catalyst for over $2.5 billion to flow into the sector.
The BTF is envisaged as a for-profit investment program of $250 million that is to be matched by an additional $250 million from private investors, so creating a $500 million capital pool available for commercialisation of biotech and medtech projects.
Funding would be engaged, inter alia, before and during clinical trials and product registration stages. The investments by the BTF and its private co-investors are likely to fall in the range of $5 million to $20 million per project.
This is great news for a cash-starved sector.
The strength of biotechnology for our economic future is clear, but to realise its vast potential will take radically new thinking and an entrepreneurial attitude. How we make and fund these new technologies by attracting capital is key.
AusBiotech is pleased to see the Government has been listening to calls for a focus on translation.
Australian life science companies attracted almost $2 billion in deals over the last 18 months, which illustrates that the sector is attractive to investors and demonstrates a good pool of quality technology, talent and opportunity that the BTF will now exploit. Finance from the BTF, along with the R&D Tax Incentive scheme is a powerful, one-two punch that will make a material difference to success in life sciences.
Dr Anna Lavelle
Chief Executive Officer, AusBiotech
Read next: Professor Peter Coaldrake AO, Vice-Chancellor of QUT on Overcoming academic barriers to innovation.
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