a good year to come for biotech

A good year to come for biotech or a great year, if?

http://www.ausbiotech.org/updates/details.asp?id=574&returntoUrl=%2Fupdates%2Fdefault.asp

4 January 2011:

The Australian biotechnology sector ended 2010 on a high with some stunning results, after patchy and mixed results throughout the year. The year to come is expected to see a stronger performance for the sector overall, as access to capital globally steadily and slowly improves and biotech markets and partners continue to emerge in countries in the region such as India and China.

Companies, Acrux and Mesoblast, provided the show-stopping news for 2010 with both achieving landmark deals worth hundreds of millions of dollars. Acrux also achieved FDA approval for its Axiron treatment making it one of only a handful of Australian companies to achieve this milestone and one of only 21 drug approvals for the US regulatory body.

The year ahead could be truly great for the biotechnology industry if the Federal Government can ultimately deliver long-awaited tax reform. The R&D Tax Credit was announced in the 2009 Federal Budget and remains in legislative limbo, with the Coalition and some Independents opposing its adoption. A failure to deliver the reform is likely to spell disaster for the start-up end of the industry. The uncertainty weighed heavily on the industry?s SMEs with their withdrawal from the ASX (life sciences) index, while they wait for a fresh flow of capital from a 45c in $1 refund.

The cohort of strong and more mature biotechs in Australia, will be largely unaffected by the outcome of the Tax Credit legislation. However the crop of small and medium start up biotech companies with turnover under $20 million, will greatly benefit from the support the Tax Credit promises.

With the Senate due to resume in February 2011, this will be the next opportunity the Bills have to pass into law. If passed, the Bills will finally bring critical and long-overdue financial relief, albeit with inadequate preparation time. We understand that it is very likely the fate of the Tax Credit lies with one vote, independent Senator Fielding, and we urge him to support it. Anecdotally we know company?s plans for R&D in the next few years are being seriously and adversely impacted by the uncertainty, as some are resorting to mothballing projects while they wait.

This may cause a loss of momentum for a burgeoning industry that promises valuable spill over benefits to the community in its delivery of life saving and enhancing medicines, diagnostics and devices, as well as solutions to food security and climate change.

Respected biotech venture capitalist and commentator, Steve Burril, says 2011 will be a good year for the industry that will see no major slow down in big pharma seeking to partner with biotechs and an increase in merger and acquisition activity. ?Both big pharma and big biotech will again compete for companies with advanced product pipelines, as well as important land grabs of technology Partnership deals will reflect 'shared risk' by smaller upfront payments and larger ones on achievement of milestones,? he said.

Meanwhile the gene patent debate has and will continue to demand our critical attention after the November 2010 introduction of a private member?s bill that if progressed in its current form, would exclude "biological materials which are identical or substantially identical to such materials as they exist in nature, however made" from patent protection. This would have far-reaching and possibly dire consequences for patient access, medical research and the biotechnology and medicines industry.

AusBiotech has worked assertively in 2010 to bring perspective to the gene patent debate that was reignited with the introduction of the private member?s bill to the federal parliament and its immediate referral to a second Senate Inquiry, with the Senate Legal and Constitutional Affairs Legislation Committee. AusBiotech is urging those affected to contribute their views directly by 25 February 2011 or during this month to be included in the AusBiotech submission.

The legislative amendment proposed in the bill, is a major concern for the future of the industry. AusBiotech strongly supports the view that all Australians should have access to world-class medical science. However, the amendments proposed in the private members? bill for a ban on patents for all biological materials may result in potentially life-altering products simply never being developed.

As noted above, public policy issues could be the big ?game changers? for Australia?s biotech sector this year.

Emerging sectors to watch in 2011 are medtech, cleantech and functional foods, which are all likely to thrive in the coming years. The medtech sector has been steadily advancing for some years now and has seen the establishment of a strong community of companies, particularly in Victoria and New South Wales. The cleantech boom is likely to be consumer-driven in non-food crops such as next generation of biofuels. As our ageing population becomes more health conscious, functional food and nutraceuticals will experience expanding markets and opportunities.

Contact AusBiotech?s Communications Manager, Lorraine Chiroiu ([email protected]), for further details about how you can support the passage of the R&D Tax Credit legislation or contribute to the gene patent debate.