Aussie biotech getting better at global partnering: report

The Australian biotechnology industry is showing new signs of maturity, evidenced by a substantial increase in international alliance activity, according to a new analysis by industry consultant Innovation Dynamics.

In the six months ending 30 June the company tracked 202 biotech-related alliances of which 135 (66 per cent) were with international organisations. That is 12 per cent higher than July to December 2004, when 183 alliances were announced. Of those, 123, or 66 per cent, were also with international organisations.

"Significantly, there has been a shift upward in international clinical trial collaboration -- this is a good example of companies shifting down the pipeline and heading closer to commercialisation," said Innovation Dynamics managing director Lyndal Thorburn.

"Having an overseas partner means a company is are able to recruit larger and larger numbers of patients in later stages of development. There are not that many companies in phase III -- only about 10 -- but there is an increasing number in phase II with trials in both Australia and overseas.

"There has been a 25 per cent rise in distribution agreements, mainly in the medical device and diagnostics area. This means they are hopefully adding to the number of export items."

Thorburn said she had seen an upward trend in the purchase of overseas companies over the last 18 months, from two in the first half of 2004, up to 13 in the six months to 30 June 2005.

"Purchasing an overseas company makes sense -- it gives you staff with an established network of contacts and skills. If a company purchases a US company it looks like a US company and can attract local investment.

"We are expecting the upward trend to continue, but Australian companies need enough money to purchase overseas companies -- this potentially comes down to a company's ability to raise money to list [on the stock market] and then make an overseas purchase."

But, Thorburn said, there is a downside to international alliances. "We are missing the payoff in terms of growing the pharmaceutical industry in Australia. Because we rely on the US, we are missing the people on the ground and we may never get enough because we are setting up companies overseas. The challenge is to get the industry to build expertise quickly. A problem has been to get the skills and ability to learn to grow.

"We are getting smarter and more globally successful but it all comes down to money -- if they can't get the money it will all come to a grinding halt."

Innovation Dynamics will release more details about international and biotech domestic alliances in its 2006 BioIndustry Review for Australia and New Zealand, due for launch early next year.