Chinese companies invest in Melbourne

Melbourne biotech is benefiting from a recent business mission to China led by the city's Lord Mayor John So.

The mission visited Beijing, Tianjin, Guangzhou and Hong Kong from September 12 to 21 and included delegates from the BioMelbourne Network, Committee for Melbourne, Centre for Clinical Studies, Neurosciences Victoria, RMIT University, Monash University, Howard Florey Institute, and Melbourne-based drug developer Starpharma (ASX:SPL).

Following the trade delegation, a deal worth at least AUD$170 million has been signed for a clinical trial program to develop Chinese medicine in Australia and other western markets. The deal brings together Chinese-based Tianjin Pharmaceutical, the China Development Bank's Tianjin Branch and Melbourne-based International Program Funds of Australia (IPFA).

The multi-centre clinical trial will test Chinese medicines developed and manufactured by Tianjin Pharmaceutical. IPFA will facilitate the trials and registration process which will be conducted in Melbourne and London.

"Traditional Chinese herbal medicine has been in existence over thousands of years. If we can combine the modern Western technology, there can be further breakthroughs in scientific research," said So. "That is how I see the collaboration can be beneficial to both nations. And I think that Melbourne has to capitalise on the opportunities and move ahead."

A research and development agreement has also been signed between RMIT University's Division of Chinese Medicine and Guangdong New South Co Ltd.

The $3 million Chinese investment will help RMIT establish its proposed Victorian Centre for Evidence Based Herbal Medicine. The Centre is intended to be commercially viable, offering fee-for-service and contractual therapeutic product development services to local and overseas companies and institutes.

"The Centre will provide comprehensive pre-clinical and clinical capabilities for the development of herbal therapeutic products which satisfy the rigorous safety and efficacy criteria required for marketing approval in Australia and western regions," said RMIT professor of therapeutic sciences David Story in a statement.

"The centre is the only one of its kind," said So. "It's good for Melbourne, to have that centre here in our city. I can see that this will be a really good foundation, a base, for further collaborations."

BioMelbourne Network executive director Tim Murphy, who was a member of the mission, said that the scale of opportunity in China is "breathtaking".

He said that these opportunities are twofold. Firstly, Australian companies can outsource to China which has "great medicinal chemistry capability".

For example, Avexa (ASX:AVX) has had an outsourcing relationship with the Shanghai Institute of Organic Chemistry for approximately two years, said Murphy.

The second is in traditional Chinese medicine, or complementary medicine, and the desire for Chinese companies to access global markets.

"We have a really strong competitive advantage in helping Chinese companies find out their active ingredients and optimise them for the Western markets," said Murphy.

"China and India are the two most populated nations, in our region," said So. "They're undergoing these phenomenal economical changes. People are looking for better quality of life, with the strong back up of information technology and computation making the research much easier."

"Melbourne has been leading that field for many years. I can see that by working together, on projects like the ones from Tianjin and Guangzhou, Melbourne can be the centre for some of the clinical trials and research into traditional Chinese, or herbal, medicine," said So.