BIO profile: Jurgen Michaelis, Bio Innovation SA

Start-ups are the easy bit -- it's the quality and consistency of post-natal care that determines whether young biotechnology companies will survive, according to Dr Jurgen Michaelis, the man behind the rapid rise of South Australia's biotechnology industry.

When the young German-born biocrat took on the job of CEO of the state government's biotech development agency Bio Innovation SA in June 2001, he set a target that raised eyebrows: 50 new biotechnology companies by 2010.

There are few doubters today. Just three years on, there have been 25 new start-ups, and the SA government is hard-pressed to keep up with the demand for accommodation.

In a relatively brief but impressive career, Michaelis has acquired first-hand experience in research, the research management and commercialisation, and in what it takes to build a biotechnology business.

He graduated from the University of Bielefeld in Germany in 1985 with an MSc, and completed a PhD in biochemistry from the same university in 1988. Michaelis won a research fellowship from the German government that allowed him to work anywhere in the world, so in 1988 he took a job in cancer research at the Christchurch School of Medicine in New Zealand. In 1990, Sydney biotech Peptech advertised for a scientist. Michaelis felt his qualifications were a good match, and couriered his CV across to Sydney the same day. The next day he received a fax from Peptech asking if he could be in Sydney the following Monday. He spent five years at Peptech, moving from the bench into running clinical trials and managing its research into the role of TNF-1 in inflammatory diseases.

By 1995 he had decided to make biotechnology management his career, and left Peptech to work at the Cooperative Research Centre for Vaccine Technology in Brisbane. He was involved in spinning out one of the CRC's first companies, Vaccine Solutions, and then became involved in licensing some of its technology to Danish biotech Bavarian Nordic. In 1998 Bavarian Nordic offered him a job, and Michaelis moved back to Germany, where he helped the company to list on the stock exchange. Its IPO raised $55 million in its IPO, and it is now valued at several hundred million dollars.

In November 2001, Michaelis received a call from Adelaide -- would he be interested in a job as CEO of the SA Government biotechnology agency?

After "a very close look" at Adelaide, and its bioscience research community, Michaelis accepted. "I could see it had many of the right ingredients to build a substantial biotech industry.

"It has quite a history in life sciences. There are some commercial successes, but it really hadn't ridden on what we call the biotech wave. There was an opportunity there.''

From the start, he aimed not just to build companies, but a vibrant biotechnology industry with a critical mass -- he set a target of 50 companies by 2010, and went to work with a team of 10.

The SA government was looking to diversify the state's economy -- and particularly that of the state capital, Adelaide, which is heavily reliant on the automotive industry for employment, and vulnerable to the uncertainties of the global car market.

Michaelis says the world's richest regions are net technology exporters, like California and Ireland.

Biotechnology companies are generally small to medium-sized, labour-intensive and attract venture capital, so they offer strong potential for increasing regional wealth.

Michaelis was also attracted by the fact that Adelaide has most of the attributes of the world's most successful biotechnology centres. It's a medium-sized city; house prices and living costs are relatively low, and commuting is easier than in Sydney and Melbourne. The climate and lifestyle are also big attractions for young people looking to pursue careers in the industry.

The government is building a $9 million biotechnology incubator at its Thebarton bioscience precinct, a 10-minute drive from Adelaide's city centre, Michaelis says the project will be capable of housing 16 new companies and 300 staff.

Bio Innovation SA will lease new companies modular office and laboratory space, at subsidised rental rates, and will locate its own team of commercial bioscience business mentors in the complex to provide hands-on support and advice in areas such as investor relations, marketing, business development and infrastructure management.

The new companies will have up to four years to grow to independence in this protected environment. Michaelis expects the most dynamic of them won't need that long, but all will be given the maximum opportunity to thrive.

When they leave, they won't need to go far -- and they'll be among friends. The SA government is razing old industrial buildings nearby to create room for companies to build their own offices and production facilities. Such protective pipelines between nursery and greenfield growth are essential, says Michaelis.

"The hardest thing, after the start-up, is to grow companies from five to 20 staff," he said. "Once they grow from 20 to 40 staff, they've made it, and they grow rapidly."

Michaelis says Bio Innovation SA was established by the previous Liberal government, but has the full backing of premier Mike Rann's Labor administration. With this bipartisan support, all of the policy settings to foster the biotechnology industry's rapid growth are in place, and Bio Innovation SA is on top of the game. "When the companies are ready, we're ready, and that really distinguishes us from the other states," he says. "We're also being supported by the business community, which ultimately will provide mentoring and will be a source of CEOs and CFOs to help grow these companies."

He says the first companies to co-locate in the Thebarton precinct have now been there four years, and a sense of community has emerged. "In some aspects, they're competing, but they're also assisting each other, and friendships are developing."

Thebarton's biotech community is being built largely around medical advances sourced from a cluster of long-established research institutions in the city's inner north -- the University of Adelaide, the Women's and Children's Hospital. There are strengths in areas like cancer, neuroscience, stem cell and reproduction research.

Meanwhile, out at Glen Osmond, 15 minutes from the city, a similar cluster of old and new plant research institutes are laying the groundwork for agbiotech business community. Around the University of Adelaide's Waite Agricultural Research Institute are laboratories of the CSIRO, the South Australian Research and Development Institute (SARDI), the Australian Wine Research institute, and the brand new, $60 million Australian Centre for Plant Functional Genomics.

Bio Innovation SA has recently made several key appointments of senior research managers in the plant biotech and winemaking areas, and is already planning to develop an agbiotech business precinct in the area as the Waite cluster begins to fizz with commercial opportunities. Michaelis says SA is now working actively to remedy a shortage of biotech business expertise -- people with PhDs in the life sciences, who have a track record in business.

The excitement and optimism in the state's biotechnology community are palpable. Michaelis says the potential for growth is "tremendous".