Australia’s biotechnology industry is a successful synthesis of world-class science and innovation.

Not only has Australia been long recognised as a world-class participant in the fields of scientific and medical research, it also has a long history of strong business links with the UK – Australia’s sixth largest inward investor. With continuing international collaboration and investment, Australia’s ongoing endeavours will undoubtedly see the country’s biotechnology sector produce further world-leading results in 2002.

Australia’s National Biotechnology Strategy was launched in mid-2000. The Australian Government’s coordinating agency for biotechnology issues is Biotechnology Australia. Formed in May 1999, it provides a ‘whole-of-government’ approach to Australian biotechnology.

State of play
Australia’s biotechnology industry grew by 60% over the last two years, according to figures in the Australian Biotechnology Report 2001.
The report, a collaboration between Biotechnology Australia, Freehills, and Ernst & Young, provides a snapshot of the current status of Australia’s biotechnology industry.
The whole industry has had terrific growth since 1991. Revenues generated by core Australian biotechnology companies (both listed and private) over the last 12 months is estimated at almost A$1bn. The main areas of growth in Australia’s biotechnology industry have been in human health, equipment and services, and agriculture. The report also indicates that, with Australian biotechnology companies having more than 150 potential products in both clinical or field trials, the industry is forecast as heading for continued strong growth.

Other noteworthy statistics revealed within the report include:

• Australia has approximately 190 core biotechnology companies and around a further 460 biotechnology-related companies;
  
• the Australian biotechnology sector is dominated by small-to-medium research-intensive companies. It has 60 listed companies with a collective market capitalisation of A$6.5bn, up from A$3.1bn in 2000;
  
• Australia’s biotech strengths are in human health (47% of companies), agriculture (14%), and genomics/ proteomics and bio-informatics (13%). In the health sector, diagnostics and therapeutics are well represented;
  
• Australian companies raised about A$900m in capital during 1999/2000, with more than A$22m in 19 initial public offerings;
  
• total Australian biotechnology revenue in 1999/2000 was more than A$1bn, up from approximately A$965m for 1998/99.

World-class R&D
In comparison with other countries, Australia has a low cost base for high-quality research. In a survey against 14 other countries – in Europe, North America and Asia, including Hong Kong, Japan, Singapore, UK and the US – Australia proved the most cost-effective location to conduct biotech research. Additionally, the industry has a supply of quality graduates (more graduates per 1000 in relevant areas than the US), a strong record of world-class science, cost-effective electronic communications, and high public spending in fundamental areas driving biotechnology.

The CSIRO (Commonwealth Scientific and Industrial Research Organisation) is Australia’s largest public sector R&D agency, with upwards of 6400 staff in more than 60 sites throughout Australia. It is one of the world’s most diverse research organisations, covering fields ranging from molecular science, health sciences and nutrition, to plant industry, tropical agriculture, field crops, horticulture, meat, dairy, aquaculture and food processing.

Australia’s Cooperative Research Centres (CRCs) are also major players in the biotech sector. These Centres are collaborative research ventures involving universities, the public sector (including the CSIRO) and businesses. Since the inception of the CRC programme in 1990, 24 of the total 91 centres funded have had a significant biotechnology focus, including pharmaceuticals, diagnostics, food and agriculture. And this number is set to grow, after an increase of federal government funding to the CRC programme in October 2001, to A$198m a year in 2003, followed by a further increase in 2005 to A$256m per year. With the applications for the CRC 2002 Selection Round due to close on 29 May 2002, applications are being invited from both new and existing CRCs.

AIMS
Another key public research facility in Australia’s biotechnology sphere is the Australian Institute of Marine Science. The AIMS was established by the Commonwealth Government in 1972 to carry out world-class scientific and technological research on the sustainable use and protection of the marine environment, and is situated 50km north of Townsville, in the region of the Great Barrier Reef. One of the facility’s main projects is focused on deriving benefits from marine biotechnology, including aquaculture, treatments for bio-fouling, biotoxins and signalling agents. This area has significant potential for Australia, with aquaculture alone in Australia estimated to be worth A$2.5bn by 2010. The Institute is also participating in the formulation of Commonwealth policy on biodiversity and bioprospecting.

Medical biotech
In addition, there are many medical research institutes and hospitals, both independent and in the public sector, covering clinical and public health research with an increasing commitment to commercialising medical and biotechnology research. These institutes owe their success to strong linkages between universities and hospitals, and to effective networking with local and international research centres.

The National Health and Medical Research Council (NHMRC) consolidates within a single national organisation the often independent functions of research funding and development of advice. As part of its annual recognition of and investment in Australia’s world-leading health and medical research, NHMRC has announced a national package of grants totalling A$367m for universities and medical research institutes under the 2002 funding round. The NHMRC continues to lead the way in funding internationally-recognised health and medical research for the benefit of all Australians. Increasingly this research is forming the basis of an innovative health biotechnology industry in Australia – ensuring that Australia maintains its place at the cutting edge of international health and medical research.

Australia also has a comprehensive number of Major National Research Facilities (MNRFs), defined as significant nodes of scientific instrumentation, information, expertise, facilities or collections of specimens, representing national research infrastructure of several billion dollars in current replacement value. MNRFs are key nodes in a country’s innovation system and in the international scientific research network.

In 2001, as part of Backing Australia’s Ability, the Government has provided A$155m over five years to enhance existing or establish additional MNRFs. The programme encourages partnership investment in world-class national research infrastructure between the Commonwealth and State/ Territory governments, universities, research agencies in the public and private sectors, individuals, industry and other Commonwealth agencies.

There are eight MNRFs related to biotechnology:

• Australian Proteome Analysis Facility – A$16.25m;
  
• Australian Synchrotron Research Programme – A$14.8m;
  
• Nanostructural Analysis Network Organisation (NANO) – A$11.5m;
  
• Australian Phenomics Facility – A$11.50m;
  
• Australian Genome Research Facility – A$14m;
  
• National Neuroscience Facility (NNF) – A$18m;
  
• National Centre for Advanced Cell Engineering – A$5.50m; and
  
• Arafura-Timor Research Facility – A$3.25m.

Australia’s National Biotechnology Strategy
Consistent with safeguarding human health and ensuring environmental protection, the National Biotechnology Strategy aims to capture the benefits of biotechnology for the Australian community, industry and the environment.

One of the strategy’s objectives is to attract foreign investment and development partners to add commercial value to Australian biotechnology R&D, and to develop key overseas markets. This is being addressed by collaboration between government, industry and research sectors for international investment attraction, and via promotion of Australian biotechnology sector capabilities in key overseas markets.

The strategy specifically addresses issues related to:

• promoting commercialisation of biotechnology research;
  
• opportunities for Australian biotechnology in the global market;
  
• raising public awareness and facilitating informed debate; and
  
• ensuring effective regulation.

Biotechnology Innovation Fund
A key initiative of the strategy was the introduction of the A$20m Biotechnology Innovation Fund (BIF), which increased to A$40m in January 2001 under the innovation statement Backing Australia’s Ability, discussed in more detail later.

The BIF programme is a merit-based, competitive grants programme, which aims to increase the rate of commercialisation of Australian biotechnology, by part-funding proof-of-concept activities. It addresses the critical gap between the research and commercial development stages, where sourcing funding to prove the viability of a new concept can be difficult. The first BIF round saw 31 successful companies from 80 applicants, and subsequently provided almost A$7m in grants from the allocated fund of A$40m.

Projects under consideration for the second round of BIF include those in the areas of pharmaceuticals and therapeutics, genomics and bioinformatics, diagnostics, medical devices, agriculture, and applications of biotechnology for the food industry.

Backing Australia’s Ability – an innovation statement
The national science and technology innovation statement Backing Australia’s Ability was made by Prime Minister John Howard in January 2001. This A$2.9bn initiative provides significant new support for science and technology, including biotech-specific initiatives of A$20m funding to double the financial support available via the Biotechnology Innovation Fund, and A$46m for the development of a new Biotechnology Centre of Excellence.

With the Government seeking to capitalise on the country’s strengths in medical, agricultural and environmental biotechnology, September 2001 saw a call for applications from organisations with the expertise, innovation and drive to develop and operate Australia’s Biotechnology Centres of Excellence. The Centre (or Centres) will carry out activities such as attracting leading Australian and overseas researchers, and developing the type of entrepreneurial culture that leads to the formation of spin-off companies. A major objective is the successful commercialisation of research efforts via increasing Australia’s skills and knowledge base in the biotechnology field.

In addition to these significant measures, Backing Australia’s Ability also assists biotechnology through increased R&D tax concessions for additional R&D activity, an extra A$736m for Australian Research Council competitive grants over five years, and expanding the Cooperative Research Centres Programme with an additional A$227m over five years. Research infrastructure will be boosted by an additional A$337m over five years.

How can the UK become involved?
Australian biotechnology commercialisation has involved collaborations with overseas partners, and the sector would like to build closer ties with the UK biotechnology R&D community.

The UK offers opportunities for Australia as:

• a source of potential partners and investment for commercialising biotechnology discoveries;
  
• a potential market for biotech products;
  
• a source of skilled personnel for commercial development as well as research; and
  
• a source of shared experience on public policy development for the commercial, legal, environmental and ethical issues related to biotechnology, particularly gene technology.

Biotechnology Australia and AusBiotech – the Australian biotechnology industry organisation – are key organisations in Australia to assist with establishing contacts with the Australian biotechnology sector. A useful starting point is also the Australian Biotechnology Directory, which can be accessed through the ‘Industry & Research’ section of Biotechnology Australia’s website (below). For investment information, please contact Invest Australia.

Article by Biotechnology Australia and Invest Australia.

Websites:
Biotechnology Australia
www.biotechnology.gov.au

Invest Australia
www.investaustralia.gov.au