‘Life sci­ences sec­tor is a sig­nif­i­cant eco­nomic driver for Aus­tralia’

BioSpectrum (Asia) - - Front Page - Lor­raine Chi­roiu, Chief Ex­ec­u­tive Of­fi­cer, AusBiotech

Aus­tralia is one world’s lead­ing des­ti­na­tion for the life sci­ences sec­tor and has been ranked among the top five cen­ters for biotech­nol­ogy in­no­va­tion. Life sci­ence in­no­va­tion in Aus­tralia has a proven track-record, with a vac­cine to present cer­vi­cal cancer and a med­i­cal de­vice en­abling deaf pa­tients to hear among the most-of­ten-cited ex­am­ples. Aus­tralian gov­ern­ment pol­icy and fund­ing pro­grammes seek to ad­vance Aus­tralia’s strength in med­i­cal tech­nol­ogy, dig­i­tal health, agritech and foodtech, ther­a­peu­tics, re­gen­er­a­tive medicine and other key ar­eas of the life sci­ences.

Aus­tralia is a world-lead­ing lo­ca­tion for biotech­nol­ogy, is an at­trac­tive des­ti­na­tion for for­eign life sci­ence in­vest­ment and is nur­tured by a re­fresh­ing fo­cus on in­no­va­tion in pub­lic pol­icy. To fur­ther en­cour­age in­no­va­tion, the fed­eral gov­ern­ment has in­tro­duced sev­eral re­forms and re­cently re­vealed a com­pre­hen­sive plan for “bet­ter tar­get­ing the re­search and de­vel­op­ment tax in­cen­tive” (R&DTI). These in­clude clin­i­cal tri­als ex­empted from a $4 mil­lion cap for the re­fund­able com­po­nent; no life­time cap for the re­funds; a cou­pling of the in­cen­tive to each com­pany’s tax rate; and for larger com­pa­nies, a grad­u­at­ing re­ward pre­mium for higher in­ten­sity and an in­creased cap. AusBiotech is an Aus­tralian life sci­ences or­ga­ni­za­tion, with a well­con­nected network of over 3,000 mem­bers in the life sci­ences, in­clud­ing ther­a­peu­tics, med­i­cal tech­nol­ogy (de­vices and di­ag­nos­tics), dig­i­tal health, food tech­nol­ogy and agri­cul­tural, en­vi­ron­men­tal and in­dus­trial sec­tors. Ac­cord­ing to its re­cent re­port there are more than 232,000 peo­ple em­ployed in the Aus­tralian life sci­ences sec­tor, across 1,653 or­gan­i­sa­tions.

AusBiotech re­cently an­nounced lead­er­ship changes fol­low­ing the re­tire­ment of Glenn Cross. Lor­raine Chi­roiu is ap­pointed as AusBiotech Chief Ex­ec­u­tive Of­fi­cer. She has worked as a ded­i­cated ad­vo­cate for the life sci­ences sec­tor, in­clud­ing al­most a decade of con­tri­bu­tion to AusBiotech, work­ing closely with pub­lic pol­icy im­pact­ing sec­tor at state and Fed­eral lev­els. Her ad­vo­cacy has tra­versed reg­u­la­tion, tax in­cen­tives, patent pro­tec­tion, med­i­cal re­search and its com­mer­cial­iza­tion.

Chi­roiu has pre­vi­ously held the roles of Chief In­dus­try Af­fairs Of­fi­cer and Na­tional Com­mu­ni­ca­tions and Me­dia Man­ager at AusBiotech and prior to join­ing, worked in cor­po­rate and pub­lic af­fairs roles for a multi­na­tional bio­phar­ma­ceu­ti­cal com­pany, the Phar­macy Guild of Aus­tralia, the Univer­sity of Mel­bourne and for a health con­sumer or­gan­i­sa­tion. In­ter­act­ing with BioSpec­trum Asia mag­a­zine, Lor­raine Chi­roiu elab­o­rates on AusBiotech’s plans, aims and goals for the biotech sec­tor un­der her lead­er­ship.

Edited ex­cerpts;

As the new CEO of AusBiotech, what are the key pri­or­i­ties on your list for pro­pel­ling the growth of Aus­tralian biotech sec­tor?

Build­ing on the work on pre­vi­ous CEOs and Di­rec­tors, I feel truly priv­i­leged and ex­cited to be ap­pointed to lead AusBiotech into its next phase of growth and evolution.

My key goal is to con­tinue to ac­cel­er­ate the growth of the life sci­ences sec­tor in Aus­tralia through ad­dress­ing gaps and re­mov­ing bar­ri­ers to in­no­va­tion, to en­cour­age com­mer­cial­i­sa­tion of our world-class re­search, as well as demon­strat­ing our com­petive­ness in the global mar­ket. Per­son­ally, I am driven to po­si­tion the biotech­nol­ogy sec­tor as one of the most sig­nif­i­cant eco­nomic and so­cial con­trib­u­tors to Aus­tralia’s long term eco­nomic growth.

Please high­light some of the key ini­tia­tives made by AusBiotech to

fos­ter the growth of biotech­nol­ogy in Aus­tralia?

Be­cause our key goal has been to fos­ter a grow­ing, strong and sus­tain­able life sci­ences in­dus­try in Aus­tralia, our ini­tia­tives fo­cus on at­tract­ing in­vest­ment to the sec­tor, ad­vo­cat­ing on be­half of the in­dus­try and pro­mot­ing in­creased global en­gage­ment.

To achieve these goals we have man­aged key in­dus­try events both do­mes­ti­cally and off­shore, im­ple­mented a Global In­vest­ment Pro­gramme – we are one of only two in­dus­tries in Aus­tralia that take com­pa­nies around the world to pitch their value to in­vestors - and de­vel­oped new re­sources and ed­u­ca­tional ma­te­rial. The study con­firms that the life sci­ences sec­tor is a sig­nif­i­cant eco­nomic driver for Aus­tralia; it is a ma­jor em­ployer of high-value jobs and Aus­tralia is glob­ally com­pet­i­tive in the life sci­ences. Po­si­tioned con­sis­tently in the world’s top coun­tries in biotech­nol­ogy in­no­va­tion, the re­search shows that 53 per cent of life sci­ences or­gan­i­sa­tions in Aus­tralia are in­dus­try-based, with 875 com­pa­nies and ap­prox­i­mately 30 per cent of the work­force in the sec­tor is em­ployed by in­dus­try, just over 69,000 peo­ple. A crit­i­cal fo­cus area is as a co-or­di­nated in­dus­try rep­re­sen­ta­tive to the Fed­eral Gov­ern­ment as we work to re­duce bar­ri­ers and in­crease in­cen­tives. We feel this work is ex­tremely im­por­tant for the on­go­ing vi­a­bil­ity of the sec­tor in Aus­tralia and were very pleased that we con­tinue to be ‘heard’ by gov­ern­ments.

Will the re­cent pol­icy changes and re­forms by the Fed­eral Gov­ern­ment help in fur­ther fu­elling the sec­tor’s growth?

We be­lieve the R&D Tax In­cen­tive is the most crit­i­cal cen­tre-piece pro­gramme that sup­ports Aus­tralia’s world-class re­search to tran­si­tion to a vi­able com­mer­cial prod­uct and tech­nol­ogy pipe­line. We were very re­as­sured that the Fed­eral Gov­ern­ment’s ap­proach in the lat­est Fed­eral Bud­get to the “bet­ter tar­get­ing of the re­search and de­vel­op­ment tax in­cen­tive” in the 2018 Bud­get will ex­empt clin­i­cal tri­als from the newly in­tro­duced $4 mil­lion cap for the re­fund­able R&D Tax In­cen­tive, and that a life­time cap on re­funds, as was widely spec­u­lated, was not in­tro­duced. We are pleased that the Gov­ern­ment recog­nises the crit­i­cal role R&D ex­pen­di­ture plays in the de­vel­op­ment of world class tech­nolo­gies, and fos­ter­ing the growth of a lead­ing and in­no­va­tive Aus­tralian biotech sec­tor.

Where do you see the largest de­mand for Aus­tralian prod­ucts and ser­vices?

Age­ing pop­u­la­tions, com­plex dis­eases and es­ca­lat­ing health­care bud­gets are well recog­nised and have been highly re­ported on. These is­sues are global and are be­ing ex­pe­ri­enced world­wide. It is the po­ten­tial for the Aus­tralian biotech­nol­ogy sec­tor to de­liver in­no­va­tive so­lu­tions to many of these com­plex is­sues that will un­der­pin the con­tin­ued de­mand for our prod­ucts and ser­vices in the sec­tor. Our abil­ity to pro­duce some of the world’s lead­ing sci­en­tists, con­duct high qual­ity clin­i­cal tri­als as well as pro­vide sta­ble in­vest­ment com­mu­nity sup­port for early stage com­pa­nies will con­tinue to en­sure global de­mand for many com­pa­nies within our sec­tor. The op­por­tu­ni­ties aren’t just lim­ited to hu­man health – but also ex­tend to agri­cul­ture, food sup­ply and cli­mate change tech­nolo­gies as well.

From your per­sonal per­spec­tive ex­pe­ri­ence of the Aus­tralian in­dus­try in which sec­tors of health­care (pharma/biotech/medtech) are the Aus­tralian play­ers strong­est?

Aus­tralia has a strong track record of suc­cess across the whole health­care spec­trum. CSL, our largest and most suc­cess­ful biotech com­pany, hav­ing built its A$88 bil­lion mar­ket cap­i­tal­i­sa­tion from its spe­cial­ity blood plasma biotech­nol­ogy, and cochlear im­plant com­pany, Cochlear Lim­ited, which was es­tab­lished in 1981 and has since led to pro­foundly changed lives for more than 350,000 peo­ple are per­haps the best known ex­am­ple of Aus­tralian suc­cess. How­ever there are many other suc­cess­ful ex­am­ples within each of the sub-sec­tors and each are char­ac­terised by dif­fer­ent struc­tural driv­ers. Medtech com­pa­nies for ex­am­ple may gen­er­ate rev­enues on a faster time­line than biotech or phar­ma­ceu­ti­cal com­pa­nies given less strin­gent reg­u­la­tory ap­provals are re­quired for a med­i­cal tech­nol­ogy and di­ag­nos­tics ver­sus a drug in­tended for hu­man con­sump­tion.

Nanoson­ics is an ex­am­ple of a very suc­cess­ful med­i­cal tech­nol­ogy player, with its pro­pri­etary dis­in­fec­tion tech­nol­ogy, that was founded in Aus­tralia

in 2001 and now has a mar­ket cap of over A$900 mil­lion. Just re­cently, de­vel­oper of a liver cancer treat­ment, Sir­tex Med­i­cal, has ac­cepted a $1.87 bil­lion takeover bid from China’s CDH Genetech, mark­ing the big­gest deal in biotech his­tory.

What ac­cord­ing to you is the se­cret sauce for the Aus­tralian biotech in­dus­try be­ing able to con­sis­tently per­form well?

Ac­cess to cap­i­tal is the top-of-mind re­sponse to this ques­tion, how­ever, while crit­i­cal, the more com­plex an­swer is a finely-bal­anced and healthy ecosys­tem, that in­cludes sym­pa­thetic pol­icy, ac­cess to global skills, qual­ity re­search, com­pet­i­tive tech­nol­ogy, in­tel­li­gent reg­u­la­tion, a favourable macroe­co­nomic en­vi­ron­ment and ac­cess to cap­i­tal.

What, ac­cord­ing to you, are some of the chal­lenges faced by Aus­tralian com­pa­nies in biotech­nol­ogy space?

Ac­cess to cap­i­tal is the life-blood of the in­dus­try, and a key chal­lenge AusBiotech seeks to ad­dress in its role. Build­ing on the pre­vi­ous ques­tion, our chal­lenge is to work to­ward the ideal, finely-bal­anced and healthy ecosys­tem; iden­ti­fy­ing and seek­ing re­dress for the gaps and hur­dles.

What has the gov­ern­ment done to ad­dress these chal­lenges?

The goal of suc­ces­sive Fed­eral Gov­ern­ments to de­velop a suc­cess­ful in­no­va­tion eco-sys­tem for the biotech­nol­ogy sec­tor re­quires the main­te­nance of a sta­ble, sup­port­ive and con­sis­tent pol­icy en­vi­ron­ment that en­cour­ages com­pa­nies to make de­ci­sions that at­tract in­vest­ment and grow R&D ac­tiv­ity. The sec­tor wel­comed changes to the R&D Tax In­cen­tive, which pro­tected many of its most im­por­tant fea­tures, along with gov­ern­ment work­ing with the in­vest­ment com­mu­nity on the cre­ation of the $500 mil­lion Bio­med­i­cal Trans­la­tion Fund. In late 2015, the Gov­ern­ment launched MTP Con­nect, an in­dus­try-led ini­ti­ate to ac­cel­er­ate the rate of growth and com­mer­cial­i­sa­tion of med­i­cal tech­nol­ogy, biotech­nol­ogy and phar­ma­ceu­ti­cal (MTP) sec­tors. This has been a suc­cess­ful ini­tia­tive, and AusBiotech has work­ing jointly with MTP Con­nect on sev­eral projects and pol­icy is­sues.

How is the biotech startup land­scape in Aus­tralia? How is the gov­ern­ment en­cour­ag­ing in­no­va­tion in the coun­try?

The de­sire to tran­si­tion Aus­tralia to an “in­no­va­tion” econ­omy over the past decade has cre­ated a favourable lo­ca­tion for biotech­nol­ogy start-ups. We have wit­nessed a ma­tur­ing of the sec­tor, both with re­gard to early stage com­pa­nies but also the in­vestors, as so­phis­ti­cated and pro­fes­sional ven­ture cap­i­tal firms have in­creas­ingly en­tered the mar­ket. Ad­di­tion­ally the listed mar­ket is more re­cep­tive to biotech­nol­ogy com­pa­nies with an es­ti­mated 140 listed life sci­ences com­pa­nies cur­rently trad­ing on the ASX. Gov­ern­ment poli­cies have been favourable and en­cour­aged the foun­da­tions of in­no­va­tion and a strong biotech­nol­ogy sec­tor.

Busi­ness sen­ti­ment across the in­dus­try is the strong­est on record. The sur­vey shows an­other jump, to 77 per cent, in the num­ber of com­pa­nies reporting that last year (2017) was an ‘ex­cel­lent’ or ‘good’ year. The vast ma­jor­ity (87 per cent) ex­pect their busi­ness to grow in 2018, a sig­nif­i­cant jump on last year’s re­sult and no re­spon­dent ex­pected their busi­ness to con­tract. A record 37 per cent be­lieve the Aus­tralian op­er­at­ing en­vi­ron­ment re­mains con­ducive to grow­ing a biotech­nol­ogy busi­ness, adding to 47 per cent that felt the en­vi­ron­ment was neu­tral. The em­ploy­ment out­look for 2018 has strength­ened to the high­est on record, with 73 per cent of com­pa­nies indi­cat­ing an in­ten­tion to hire, up from 64 per cent in 2017.

Where do you see Aus­tralia’s biotech sec­tor five years from now?

A con­ver­gence of in­dus­try ma­tu­rity, deal flow, reg­u­la­tory ad­vances, in­creased cap­i­tal and de­vel­op­ment pro­grammes, makes this the most buoy­ant I’ve seen the sec­tor in my near-decade-long ten­ure at AusBiotech. The op­por­tu­nity is ours to fur­ther build this in­dus­try to­wards its po­ten­tial as a driver of our econ­omy and qual­ity of life.

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