This article is the second of GEN’s multipart exploration series of many of the world’s top biotech hubs. Here, we focus on Australia and its bioeconomy from the eyes of local biopharma execs. Our first article looked at the West Coast of the United States.
Australia’s life sciences sector has grown exponentially during the past decade in terms of numbers of companies, biopharma employees, commercialized products, and patents filed. More than 1,400 biotechnology companies are located in Australia—up 40% since 2019, according to a 2022 report from AusBiotech. While more than 80% are small- and medium-sized companies, and many are pre-revenue, the nearly 180 that are listed on the Australian Stock Exchange represent a market capitalization of $255 billion.
The growth is partially the result of Australia’s R&D tax incentive. During its first decade (2011 to 2021), Deloitte Access Economics estimates that for every dollar forgone in taxes, the program has generated an average return of $2.18. For 2021, Deloitte estimates that figure at $3.14.
To get the low-down on the land down under, GEN queried Leslie Chong, CEO and managing director at Imugene; Gisela Mautner, MD, PhD, CEO, at Noxopharm; and James Graham, CEO, at Recce Pharmaceuticals. Here’s what they told us:
GEN: Australian researchers were among the first to develop an HPV vaccine to prevent cervical cancer, a Cochlear implant for deafness, and sleep apnea machines. What is the greatest innovation coming out of Australia now?
Chong: Australian companies are strong in immuno-oncology—particularly in the developing cell therapy field. Examples include Imugene, Arovella, Chimeric Therapeutics, Prescient Therapeutics, Carisma Therapeutics, and the Melbourne-based private companies Cartherics and oNKo-innate. To support these innovations, Australia is developing its own cell and gene therapy manufacturing blueprint through Ausbiotech.
Graham: Arguably the greatest innovation thus far is the development of penicillin nearly a century ago, led by Australian Sir Howard Florey. [based on the discovery of the mould by Alexander Fleming.]
Now, a new challenge has emerged: antibiotic resistance, linked to the misuse and overuse of antimicrobials. With the increase in multidrug-resistant superbugs, expanding the anti-infective arsenal and developing new ways to target resistant pathogens safely without serious, unwanted side effects for patients and without contributing to antimicrobial resistance is critical.
Recce is developing a novel class of broad-spectrum synthetic anti-infectives for use against deadly bacterial pathogens, including their superbug forms, without contributing to drug resistance. They have the potential to overcome the hypercellular mutation of bacteria, the challenge of all existing antibiotics to date.
Mautner: Australia has a good track record in developing new solutions in medicine, even though they are not always recognized as being Australian innovations after being licensed [by] global corporations. [In addition to the already-mentioned innovations,] we also have excellent clinical research in many therapeutic areas, including rare diseases and inflammatory diseases. A growing number of companies are developing new treatments in these areas.
GEN: Australia is known for its laid-back vibes and natural diversity, but it also is racking up business accolades. For example, the Massachusetts Institute of Technology ranked it #1 in terms of showing the greatest progress and commitment to enhancing cyber security. What is it about Australia that makes life sciences companies want to set up their businesses in that country?
Chong: The R&D Tax Incentive, Australia’s flagship innovation program, offers increased access for international companies and provides businesses with generous tax offsets for eligible R&D activity.
More than 8,100 active clinical trials are underway now, and approximately 1,000 new clinical trials commence each year, thanks to underlying strengths in our medical research infrastructure, skilled workforce, world-class healthcare system, efficient regulatory pathway, and compliance with high international standards for data and intellectual property protection. So far, nine cell and gene therapy products have been approved by the Therapeutic Goods Administration (TGA).
Australia’s ethnically diverse, English-speaking population, and proximity to Asia are additional benefits.
Graham: Australia is an attractive prospect for companies because of its financial support programs and incentives, specifically the R&D Tax Rebate, which provides either a refundable or nonrefundable tax offset of up to 43.5% for companies with an annual turnover of less than $20 million. This tax rebate has enabled Recce to extend its ongoing cash runway to fund its clinical goals and objectives.
Australia also has world-leading clinical research organizations, with a focus on Phase I clinical trials. Early-stage pharmaceutical companies are incentivized with a range of options to conduct their preclinical and early-phase trials.
Mautner: Australia’s world-class universities provide a strong foundation of R&D expertise and are increasingly open to industry partnerships. We are capitalizing on this ourselves with partnerships in pancreatic cancer and inflammatory diseases. There is strong federal and state government support to develop advanced RNA-related research and manufacturing capabilities within Australia, and thus evolve the local biopharma ecosystem.
Australia also has a high standard of universal healthcare and concentrated centers of medical expertise. Our medical centers are equipped with [advanced and modern] Phase I [clinical trial] units and are driven by the need to manage public health in remote locations. There also are multiple levels of government support for industry, as well as export support in a generally prosperous and stable economic climate.
GEN: Raising capital has been challenging globally these past few years. How are Australian biopharma companies dealing with that, and what additional challenges do they face?
Chong: Access to capital globally—particularly in U.S. markets—has been challenging for many companies during 2022 and 2023. Many companies, therefore, emphasize their execution of promised milestones. Imugene’s philosophy, for instance, is, “Follow and deliver on the science, and the money will come.” With $160 million in reserve, Imugene has a capital runway to execute on all its current milestones, focusing on its allogeneic CAR T therapy Azer-cel and its oncolytic virotherapies.
Graham: A major challenge is to be recognized by—and remain on the radar of—investors, industry leaders, and key opinion leaders in both the U.S. and Europe. Therefore, we maintain an active public and investor relations presence by attending conferences and conducting non-deal roadshows and similar investor-related initiatives.
Mautner: Compared to international markets, Australia has a lower level of biotech expertise among investors, including venture capitalists. Consequently, we focus on export strategies that identify potential partners overseas, travel to overseas events and conferences, and continue to educate the local investment community about the potential of the life sciences sector and the advanced technology it is developing to tackle diseases and conditions that affect millions of people worldwide.
Another major challenge is that Australia is geographically far away from major markets, such as the U.S. and Europe. Time zone differences can create challenges, too. However, we are much closer to the sizeable economies of Asia.
