AusBiotech wraps up a year of delivery for the industry

As we head into Christmas and the New Year, the industry’s ASX-listed market capitalisation sits just over $50 billion and there are signs that the IPO market is at last awakening from hibernation. The year has proven to be another solid period for the Australian biotechnology industry and for AusBiotech. During this time, AusBiotech was steadfast in its advocacy and active in its representation and support of the industry.

After an unusually prolonged federal election campaign, the year has seen us welcome a new government and industry minister, the Hon Ian Macfarlane, and a renewed optimism for the sector. Minister Macfarlane has already earned great respect for his role in developing the biotechnology industry in its earlier years, when he was last the Minister for Industry (2001 to 2007), and we look forward to a productive relationship.

The R&D Tax Incentive began to flow back to the sector, and AusBiotech is proud of the role it has played in a policy that has delivered at least $45 million so far to biotechnology companies with turnover under $20 million.

The R&D Tax Incentive is proving an excellent foundation for innovation to nation-build for Australia, but AusBiotech has commenced advocacy for further tax reform to support innovation and will continue this in the year to come. AusBiotech advocates making tax incentives an asset for innovation and business, with three pillars:

• Retain the R&D Tax Incentive, which is a top priority for the life sciences industry, and seek the legislation to enable quarterly credits;
• Introduce the Australian Innovation and Manufacturing (AIM) Incentive, a ‘patent box’-style incentive to keep home-grown intellectual property (IP) once it reaches commercialisation, as well as associated manufacturing, in Australia; and
• Introduce fiscal incentives for investors in pre-revenue companies.

After commencing advocacy for this new AIM incentive, AusBiotech was pleased to see the Coalition’s pledge to actively consider a patent box tax incentive as noted in their policy document ‘The Coalition’s Policy to Boost the Competitiveness of Australian Manufacturing’. This gives us a great basis for dialogue between the new federal government and the biotechnology industry in the New Year.

In policy terms, 2013 has been a big year. Pre-election, we saw an unprecedented number of government consultations, particularly on intellectual property laws, and AusBiotech contributed to significant federal reviews such as the McKeon Report, the Productivity Commission review on compulsory licensing of patents and the Pharmaceutical Patents Review. The previous Labor government’s (pre-election) policy on Industry Innovation Precincts sparked meetings and collaborations all over the country, and an announcement about ongoing support for the policy from the newly elected government is expected with next week’s Mid-year Economic and Fiscal Outlook - along with news on various other policies.

In this context and with the fundamentals of the industry strong, the work of AusBiotech has delivered and delivered this year and, to ensure this continues, the AusBiotech board has gone through a process of reviewing and reworking the AusBiotech three-year strategic plan, which was launched at AusBiotech 2013.

The new strategic plan 2013-2016 provides a firm foundation from which to build and it addresses the predicted opportunities and challenges. AusBiotech will work to ensure continued global engagement in established markets and look to harness the rising demand and opportunities from Asia. Advocacy will focus on the changing dynamics of the Australian economy and leverage the opportunities provided by the end of the mining boom and the decline of traditional manufacturing to raise biotechnology’s profile and support at a policy level. In order to continue its work, AusBiotech will strengthen its revenues via the expansion of AusEvents.

AusBiotech has a long-held and genuine desire to support the development of boards and directors, the quality of company governance and disclosure, which in turn supports the broader industry’s development and attracts investment by increasing investor confidence.

This year, with the support of the Victorian government, AusBiotech has developed two significant resources for the industry to support life science boards and directors:

• The revised ‘Code of Best Practice for Reporting by Life Science Companies’ with the support of the ASX, which was released in May; and
• The ‘Guide for Life Science Company Directors’, a practical guide for directors of public and private life sciences companies, which was endorsed by the Australian Institute of Company Directors.

Both resources are important to boost confidence in the sector and thereby drive investment. They aim to enhance the governance of boards of directors leading life sciences companies and to guide disclosure. In addition to the ‘best practice’ message that the project’s resulting documents will provide to investors and others, it also, very importantly, seeks to support and build the capability and understanding of less experienced directors or those new to life sciences.

The venture capital community is now looking to life science companies for signs that they are implementing the code and taking the support of the guide seriously. Life science company boards are urged to take advantage of these resources by recommending and distributing them to current and would-be directors and displaying the code’s ‘web button’ on company websites.

The guide, code and the web button can be found at www.ausbiotech.org/biotechboards.

AusBiotech has been working in the Asian region on a small scale for many years and, recognising the importance of this region as a life science growth hub, has this year ramped up efforts. AusBiotech has won a three-year federal grant to conduct the ‘Australian Medical Devices & Diagnostics to China’ project, which aims to facilitate medical devices trade with China by breaking down the major barriers to entry. This activity received funding from the Australian Trade Commission as part of the Asian Century Business Engagement plan and the project application was made with partners FB Rice, Deloitte and the Burnet Institute.

It will result in much-needed information for Australian companies about IP management in China and outline the types of business structures that are possible for Australian companies entering China for the first time. The project will produce an extensive report and a training module for Australian companies seeking to establish markets and/or businesses in China. It will also include an AusBiotech-led business mission to China in 2016 of Australian companies.

AusBiotech will be conducting and scoping a research project initially to determine the more detailed needs of Australian medical device and diagnostic companies. As we resume operations in January this will be a focus, and the annual CEO survey for 2014 will also commence. We conduct it to give a snapshot of industry sentiment, achievement and public policy issues. AusBiotech urges you to contribute to the body of information that will inform the China Project as well as the CEO survey, as it forms the basis of our advocacy work for the year ahead.

In a new development this year, AusBiotech joined with CropLife Australia, Grains Research and Development Corporation and the National Farmers’ Federation to form a new industry group - the Agricultural Biotechnology Council of Australia (ABCA). The council has been established as a national coordinating organisation for the Australian agricultural biotechnology sector to encourage debate on biotechnology through the provision of credible, balanced, science-based information. More on this initiative is contained later in this report.

AusBiotech, CropLife Australia and ABCA jointly put forward the successful bid to host the 15th Agricultural Biotechnology International Conference (ABIC) in Melbourne in 2015. The three organisations will work together to leverage this significant achievement and the many opportunities it presents for the advancement of agricultural biotechnology in Australia.

AusBiotech also supported a bid by CropLife Australia, which won a grant to conduct ‘Agricultural Biotechnology in Asia’ with the aim of developing stronger links and relationships in key Asian markets for Australian agricultural produce and expertise. The project will facilitate the sharing of knowledge and promoting innovation in agricultural bioscience and develop a range of business opportunities.

In a notable development for the AusBiotech Investment program this year, AusBiotech and Beacon Events announced a partnership to deliver biotechnology investor meetings in Hong Kong and Melbourne until 2015. The Hong Kong-based Beacon Events is the organiser of one of the largest resource sector investor events in the Asia-Pacific region - Mines and Money. Our partnership with Beacon Events looks to its expertise in Hong Kong and providing finance and investment events for the resources sector, which is naturally converging with biotechnology as it shares the same investor profile.

The board and team at AusBiotech wish you all a very happy and safe Christmas and look forward to working with you on your behalf to make 2014 the best year for biotechnology yet. 

The AusBiotech office will close for the Christmas/New Year break from 1.00 pm on Friday 20 December and reopen on Monday 6 January 2014 at 9.00 am.

The calendar for major AusBiotech events kicks off in 2014 with the second Australia China Life Science Summit, which is scheduled to be held 18-19 February 2014 in Sydney. Dates for other 2014 major events from AusBiotech and its conference organising arm, AusEVENTS, include:

17-18 March	Science meets Parliament, Canberra, ACT (AusEVENTS)
17-19 March	11th Annual World Congress of the Society for Brain Mapping and Therapeutics, Sydney, NSW (AusEVENTS)
1-2 April	AusMedtech 2014, Melbourne, Vic
4-6 June	Asia Biotech Invest, Hong Kong
20 June	Australian Life Science Investment Showcase 2014, San Francisco, USA
23-26 June	BIO 2014, San Diego, USA
19-21 August	Research Australia’s Philanthropy in Health and Medical Research 2014, Melbourne, Vic (AusEVENTS)
2-3 September	Tech Transfer Summit Australia 2014, Location TBC
27-28 October	Australia Biotech Invest, Melbourne, Vic
28-31 October	AusBiotech 2013 National Conference, Gold Coast, Qld

Please visit www.ausbiotech.org/events for more information.