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‘Australia has potential to spur more biotech success stories’

The Australian

February 9, 2016 12:00AM

Sarah-Jane Tasker

Australia has the potential to produce more global companies like bionic ear developer Cochlear on the back of the federal government’s new biomedical translation fund but first it needs private investors, and super funds are the target.

Brandon Capital managing director Chris Nave said the opportunity was now here for more commercial biomedical successes out of Australia, adding that Australians needed to recognise that innovation was the future. “As a country we are united in recognising that iron ore at $US25 a tonne is not a sustainable long-term future for the country,” he said yesterday at a briefing on the new fund.
“I hope that by the end of the 15-year program we would have created companies that are starting to invest back in the sector looking for their next pipeline.
“Wouldn’t it be great if at the end of this we have three or four more Cochlears to point towards that will start investing back in the sector?”
Innovation and Science Australia chairman Bill Ferris yesterday outlined to industry experts in Sydney and Melbourne some initial details on the fund, which is expected to start investing later this year.
The fund will receive $250 million from the government, which will be matched by private investors. It is intended that the subscribed capital and realised profits will be returned to the government, and investors, over the 10 to 15-year expected life of the fund.
Jeremy Curnock Cook, managing director of Bioscience Managers, said Wales had run a similar fund over the past few years to what Australia was introducing. He said it had since made 10 investments and was sitting on around a 2.5 multiple on the initial investment.
The target for Australia’s investment fund will be in later-stage biotechs — companies whose projects have already moved beyond proof of concept and are ready for clinical trials.
The bio and medical technology sectors have struggled over recent years to attract funding to develop Australian research. Capital flow into the sector peaked at $90m in 2007 and by last year that figure had halved.
Yasser El-Ansary, chief executive of Australian Private Equity and Venture Capital Association, said he had worked with super funds and the government to understand how to remove the barriers that were stopping super funds allocating greater amounts of capital into the sector.
“There is a tremendous opportunity in front of us,” he said.
“There’s a lot of work to do but I do see a bright future in terms of our capacity to tap into more and more of that capital from the superannuation sector.”
Mr El-Ansary said that in Australia both science and technology were now embracing opportunities.
“It’s not always the case you have both sides of politics try and outdo each other on policy ... in this area at this point in time you do have that dynamic,” he said.
“That gives me confidence that the message in Canberra has been heard loud and clear.”