The Australian biotechnology industry

Friday, 01 June 2001


    ‘We may have been last out of the blocks in the biotechnology race but we can overtake in the straight,” says AusBiotech executive director Tony Coulepis. AusBiotech is the newly-constituted organisation that replaces the Australian Biotechnology Association.

    His comments come in the wake of recent statements by Professor Dick Wettenhall, director of the $400 million Victorian Government-backed Bio21 Institute in a Melbourne Age article that said countries such as Singapore no longer look to Australia as a scientific partner. "The initiatives that the federal and state governments have taken in recent times may fall short of the large investments being made in Singapore, Taiwan and Korea, but they are certainly in the right direction and the momentum is increasing (see chart)," says Coulepis. The government provided a $450,000 grant in March to enable ABA to build interstate and international networks among the country's leading biotech industry and scientific groups. AusBiotech is also implementing a three-year business plan aimed at making Australia a significant player in the international biotechnology industry.

    The plan "Growing Australian Biotechnology" aims to:

    • facilitate the expansion of the biotechnology industry by nurturing sustainable biotechnology enterprises and creating access to appropriate professionals;

    • increase links between the biotechnology industry and key stakeholder groups;

    • increase awareness of the Australian biotechnology industry with potential investors in the corporate and public sectors, the research community, governments and the Australian public; and,

    • stimulate competitive and financial environments for Australian biotechnology companies.

    There is global recognition that Australia is a smart country and that it produces first class research in the biotechnology area. What Australia is not good at is commercialising this research itself. The result is a brain drain as leading researchers are enticed away by cashed-up US corporations or research institutes. AusBiotech warned about this in a submission to the Government four years ago. While Monsanto and Dupont were investing billions in 1997 to develop new businesses, the ABA was finding it difficult to find any new companies that had biotechnology as its main business.

    "This lack of activity in generating and developing new businesses is confirmation that the Australian based industry is suffering from a severe lack of investment. Indeed, one is tempted to assert that Australia is not just performing poorly in biotechnology but that we are in fact in crisis". According to AusBiotech, biotechnology investment in Australia has grown rapidly in the past 18 months, generally outperforming the All Ordinaries and high technology sector. "What is needed is a concerted effort from academics, researchers and companies already involved in the industry to send the message that Australia is serious about building a position in the global biotechnology industry," says Coulepis. "In discussions with investment managers and various business groups, I get the message that there is smoke in the biotechnology industry but no fire. The reason for these statements is that the Australian biotechnology industry is active but fragmented.

    It is our job to bind the various elements together into a powerful voice that will lobby government and facilitate the networking links between research, development and commercialisation. But there are barriers. A recent PricewaterhouseCoopers survey of the global and Australian biotechnology industries paints a depressingly common scenario of the gap between research and commercialisation. The key finding from the survey is that local biotechnology and research institutes prefer to partner with international pharmaceutical companies rather than with venture capitalists to commercialise new research. Local pharmaceutical companies were considered to have a credibility gap and it was also considered a real challenge to gain access to the right people at head office level.

    PWC identifies four main challenges facing Australian biotech companies

    • international competitiveness and reputation;

    • access to funds to add value to IP;

    • geographical location – isolation from know-how and timely market knowledge;

    • investor reaction to the sector's intrinsically high technology failure rate and long lead times.

    Other barriers to the development of a biotechnology industry were:

    • Investor short termism;

    • lack of credibility to gain access to the right people;

    • lack of market awareness/credibility about the technological advantage of the product;

    • the need to establish scientific credibility by proving product performance, versus the early stage of much of the technology.

    Biotechnology fast facts


    • World class (and cost-effective) biomedical, biopharmaceutical and agribiotech research.

    • A rapidly developing, globally-focused, biotechnology industry.

    • Strong government support for innovation with specific biotechnology policies and programs.


    • Australia has a strong record of world-class scientific achievement, with four Nobel Prizes (drug development, immunology and neuroscience), initial mapping of the enzyme neurominidase, and gene shears discovery.

    • Australia has internationally renowned research capabilities in medical research, bioinformatics, genomics, and bioinformatics.

    • Biotechnology research in Australia includes health, medical, agriculture and environmental applications. • Australian biotechnology patents taken out in the US have increased 250 percent in recent years – more than double the increase of such patents from the rest of the world.

    • Australia has more graduates in relevant areas of science and technology per 1000 graduates than the USA – providing a strong supply of highly qualified and innovative scientists.

    • Australia is the most cost-effective location to conduct high quality biotech research compared to 26 countries in Europe, North America and Asia.

    • Australia is one of only 12 mega diverse countries – and the only developed one – with a unique proportion of botanical diversity – 80 percent – found nowhere else in the world. Bioprospecting is continuing in Australia.


    • Australia's intellectual property regime is robust – with a patent system well-suited for protection of biotech inventions and a very wide range of biological materials and technical processes can be and are patented in Australia.

    • Australia's regulatory environment is mature, open and consistent with the regulatory environments of the major markets of biotechnology products around the world.


    • Australia's biotech industry features some 170 biotechnology companies – more per capita than the US.

    • In 2000, there were 26 new ASX biotech listings, bringing the total to 78 public companies involved in drug discovery, pharmaceuticals, health products and health services – with a strong pipeline of future listings.

    • Australia biotech stocks gained 19 percent in the five months to February 2001 while the Nasdaq Biotech Index in the US fell 27 percent over the same period.

    • There is an increasing trend of spin-off companies from Australian universities, research institutes and cooperative research centres (CRCs) – reflecting the link between new enterprises and the strong local research base.

    • Biotechnology "clusters" have developed in strategic locations around world class research centres, featuring necessary key infrastructure, and fostering collaboration in particular biotech niches.

    • The Australian Biotechnology report (1999) confirmed that Australian companies were active in intellectual property transactions – of 90 companies surveyed, 1400 patents were held, with 176 being approved in the preceding 12 months and a further 86 applications.


    • Despite dynamic industry growth in Australia, an imbalance between research output and commercial development continues – creating opportunities for investors interested in biotechnology.


    • Australia's federal and state governments have active policies and programs in place to foster Australian biotechnology excellence.

    • Innovative government programs have been established to increase

    the level of commercially relevant R&D, encourage greater expenditure, increase capital flows and enhance entrepreneurship in biotechnology.

    • All State Governments actively encourage value-adding industries to locate in their region – through infrastructure support, tax exemptions, relocation grants and subsidies on a case-by-case basis.

    • Invest Australia is front-line service for international investment enquiries, offering investment promotion, attraction and facilitation services.


    The purpose of this database is to provide a full-text record of all articles that have appeared in the CDJ since February 1997. It is aimed to assist in the research and reference process. The database has a full-text index and will enable articles to be easily retrieved.It should be noted that information contained in this database is in pre-publication format only - IT IS NOT THE FINAL PRINTED VERSION OF THE CDJ - therefore there might be slight discrepancies between the contents of this database and the printed CDJ.

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