AusBiotech report: Second generation biotech

Biotechnology companies are increasingly generating their own original research rather than relying on the university sector, a new report from Research Australia has found.

While in 2004 universities provided 66 per cent of original research being developed by biotech companies, this dropped to 35 per cent in 2007.

Private and listed companies were now generating 44 per cent of their own original research, up from 21 per cent three years ago. Private inventors, hospitals, medical research institutes and the CSIRO contributed 12 per cent of original research each.

One interpretation of this finding is the emergence of second generation biotechs, or new companies being spun out of existing ones, the chairman of the report's review panel, Monash University's Professor Michael Vitale, said.

"This phenomenon would be an indication of increasing maturity across the biotech sector," Vitale said.

The report, Beyond Discovery 2007, is a follow up to a similar 2004 report conducted by Research Australia, a national alliance of 190 organisations who aim to increase the priority given to health and medical research in Australia.

It was launched at the AusBiotech conference in Brisbane today by the Queensland Chief Scientist, Professor Peter Andrews.

The survey of 68 health-related biotech companies found that while 25 per cent of respondents had revenues of between $2 and $10 million, 32 per cent are in the start-up phase with revenues below $2 million. Only 10 per cent had revenues in excess of $10 million.

Worryingly, only 10 per cent of biotech companies survey were profitable. They reported that a significant hurdle was the need for funding to advance discovery but an increased number (from 17 per cent in 2004 to 26 per cent in 2007) had access to funding from state and federal governments.

In other findings, almost half the companies derived income from selling products and services and one-third from licensing intellectual property. Forty-one per cent are currently exporting and 60 per cent are planning to export in the next year.

"While it is still early days for Australian biotechnology, there are promising signs of growth and maturity," Research Australia's CEO, Rebecca James, said in a statement.

The report is available from Research Australia