Australia ‘most prominent’ in Asia-Pacific biotechnology, but times may be changing

The Australian biotechnology industry comes sixth in the world when ranked by number of biotech companies, according to ‘On the Threshold’, an Ernst and Young report released today.

Australia has 228 public and private companies, the report calculates. Elsewhere in the Asia-Pacific region China -- including Hong Kong -- ranked second with 136, and India, Taiwan, and Korea round out the top five with 96, 52 and 41 respectively.

Worldwide, the US remained in first place with 1473 public and private companies, followed by Canada, Germany, the UK, and France.

The report predicts that Australia’s prominence in Asia-Pacific biotechnology will soon be challenged by Japan, which enjoys rapid growth boosted by both government funding and domestic investors.

“Across Asia-Pacific, biotech companies also enjoyed a surge in financing and market valuations,” it states.

“If the European biotech industry is 10 years behind the US, the Asia-Pacific industry would be considered less mature than Europe. But Asia-Pacific has strength in numbers (one-third of the world’s population lives in China and India), and its research prowess is growing.”

In 2003, the Asia-Pacific industry outperformed Europe, whose biotech industry registered drops in revenues, R&D expenses, number of companies, and number of employees. Overall, however, Europe’s fortunes were turning, as the region experienced its second-best financing year ever.

Asia-Pacific company revenues increased by 9 per cent in 2003 over 2002, whilst R&D expenses jumped 10 per cent and the number of companies 11 per cent.

Australia’s biotech industry in 2003 experienced increases in revenues, R&D expenses, and number of companies. The industry’s total market capitalisation also surged 21 per cent -- or nearly $1 billion -- over 2002.

Circadian Technologies CEO Leon Serry, profiled in the report, attributed Australian investors’ willingness to fund biotechnology companies to their familiarity with the similar risk-reward profile in the mining sector.

According to Serry, this “fills the gap left by the small risk averse venture capital market, enabling biotech companies to list at a very early stage.”