杏吧原创

IT鈥橲 been a hot few months for Australia鈥檚 young biotechnology industry. In the last financial quarter to the end of September, stock values surged and the top 25 biotech firms raised A$180 million, almost twice as much as they did in the whole of 2002. As well as an influx of corporate cash, more money has also been provided for public sector projects and institutes, such as a new centre dedicated to developing a vaccine for type 1 diabetes (see 鈥淒iabetes: the fight is on鈥�).

鈥淚t鈥檚 early days, and there are major challenges, but the industry here has a lot of potential,鈥� says Harry Karelis, managing director of Sydney-based investment fund Biotech Capital.

About half of Australia鈥檚 280 or so biotechs are in the medical sector, with core strengths in stem cell research, immunology, medical devices and neuroscience. Agricultural biotech is also important, with research and products covering everything from wine quality to the tenderness of meat. But the vast majority of companies are small, with many still firmly in the research and development stage.

Australian drug discovery is certainly in its early days, but there have been important breakthroughs. For instance, Biota of Melbourne developed the flu drug Relenza, though GlaxoSmithKline has global sales and marketing rights. 鈥淲e don鈥檛 really have any blockbuster drugs coming out of Australia, and we haven鈥檛 had experience of people taking a drug from the early stage of discovery through US Food and Drug Administration approval to marketing. But that鈥檚 coming,鈥� Karelis says. 鈥淚n the next five or ten years, we鈥檒l have a handful of companies that will have gone through that process.鈥�

For most companies, though, the geographical distance from the US market and a lack of major funds in Australia mean overseas partnerships, or at least overseas investment, are vital for them to fulfil their potential. As Karelis explains: 鈥淭here鈥檚 enough venture capital money here to take biotech companies only to a certain level. The message is that people here really need to recognise that Australia is a long way away, and it鈥檚 important they build global links.鈥�

These links are being forged. At BIO 2003, an annual industry meeting held in Washington DC in June, the Amrad Corporation of Melbourne announced that Merck, Sharp and Dohme has bought the licence on its technology to develop new asthma drugs, in a deal worth up to US$112 million. And the Australian states, which traditionally have tried to find their individual place in the overseas market, are beginning to realise that they must work together to promote Australia as a whole and this June, the governments of Victoria, Queensland and New South Wales created the Australian Biotechnology Alliance, which will represent their interests abroad. 鈥淭here is a genuine desire, particularly when talking internationally, to see that there is an Australian-first approach to how we present ourselves,鈥� says Tom Laurie, biotech spokesman for John Brumby, Victoria鈥檚 minister for innovation.

This is a sign of the increasing maturity of the biotech industry here, says Karelis. 鈥淢ost of the major players offshore wouldn鈥檛 know where Brisbane or Melbourne or Sydney are 鈥� they just know where Australia is.鈥�

Within Australia, Victoria 鈥� in particular its capital Melbourne 鈥� has the most developed biotech sector of all the states, especially in biomedicine where it has a long history of world-class research. The state is home to about 38 per cent of the country鈥檚 biotech companies, including the largest, CSL, which makes blood products and vaccines and which also has manufacturing bases in Europe and the US. The brand-new, heavily funded (A$60 million in government and private funds) National Stem Cell Centre is also in Melbourne, and Australia鈥檚 first synchrotron should open in 2007. And in March, US pharmaceutical giant Bristol-Myers Squibb announced it would open its first R&D headquarters outside the US in the city.

Alongside its strengths in stem cell research and immunology, Victoria is also pushing the neurosciences. Three years ago Neurosciences Victoria, a consortium of universities and research institutes, was set up to create a group that would, in theory, be better placed to attract funds from big pharma, as well as from the federal government. The strategy has worked well. Last year, for example, Schering entered into a three-year, A$25 million collaboration to look for novel molecular targets for diseases such as Alzheimer鈥檚 and Parkinson鈥檚.

The UK is now considering whether to set up a similar neurosciences initiative, says Laurie. 鈥淚 think Australia is certainly one step ahead of some other countries in terms of looking at our strengths and how we can improve those strengths by going just one step further,鈥� he says.

But Victoria is not Australia鈥檚 only biotech star. Three of its biggest five outfits, Sonic Healthcare, Resmed and Cochlear, are in the Sydney region.

ResMed and Cochlear are medical device companies that have achieved major international success. ResMed was founded in 1989 to commercialise a facial mask created at the University of Sydney for treating obstructive sleep apnoea. Today, the company has around 500 patents issued and pending on a range of technologies, mostly in the diagnosis and treatment of disordered breathing during sleep. Last year, it notched up sales of more than A$200 million. Cochlear was formed to commercialise the world鈥檚 first cochlear implant, developed by a researcher at the University of Melbourne. It now sells implants in more than 70 countries.

Sonic Healthcare, a diagnostics company and one of the top 100 firms listed on the Australian Stock Exchange, employs more than 10,000 people in Australia, New Zealand, Hong Kong and the UK. Its core business is to provide pathology and radiology testing to general practitioners.

Elsewhere in Australia, other states are looking to build on their existing capabilities. Thanks to companies such as BresaGen, which is best known for its work on embryonic stem cell therapies for Parkinson鈥檚 disease, South Australia has a prominent medical presence. But the state is also strong in agricultural biotechnology 鈥� a field close to the government鈥檚 heart. When Australia鈥檚 prime minister, John Howard, launched a series of scientific research programmes earlier this year, one of the goals was to grow the agriculture and food sector by $3 billion a year over the next 10 years. And one of the centres to benefit is the Waite Campus of Adelaide University.

Located in the Adelaide foothills, 15 minutes by car from the city, the campus, headed by new director Geoff Fincher, contains a number of schools within the faculty of science, as well as other research groups, including the Australian Wine Research Institute, the Cooperative Research Centres for viticulture, molecular plant breeding, weed management and salinity, and the new Australian Centre for Plant Functional Genomics.

The centre is funded by the Australian Research Council and the Grains Research and Development Corporation, and one of its goals is to help boost Australia鈥檚 A$8-billion grain industry by mapping genes involved in responding to environmental stresses such as drought in barley or wheat. 鈥淲e鈥檙e focused on environmental stress tolerance,鈥� says CEO Peter Langridge. 鈥淏ut we鈥檝e been employing people with diverse skills 鈥� one is a theoretical physicist 鈥� as part of the bioinformatics group.鈥�

In addition to bioinformatics, the centre still needs people in crop genetics and stress physiology 鈥� all areas in which Australia has key skills shortages.

Overall, says Langridge, the agricultural biotech industry is in good shape in Australia. 鈥淚 think in many countries, such as the UK, there鈥檚 been a recognition that they have probably focused too much on the fundamental, theoretical side of things and not enough on the delivery of commercially relevant crops. But in Australia we鈥檝e always had a very pragmatic approach. I believe that鈥檚 been our real strength, we鈥檝e been very much better at technological delivery than many overseas groups.鈥�

Langridge also sees advantages to being based close to Adelaide. 鈥淭here鈥檚 a surprisingly strong biotech industry in South Australia, but because the general community is relatively small, there is maybe better interaction between people in different fields of biotech than certainly seems to occur elsewhere,鈥� he says. 鈥淎nd because South Australia is so small we have very approachable politicians. If we need to discuss an issue or a problem we can fairly easily arrange a meeting with the relevant minister.鈥�

The Waite Campus is unique in Australia, if not the world, in having a large number of people working on a range of plant science research, from the very basic to the purely applied, says Langridge. Many of the groups on the campus are not companies. For example, several groups funded by CSIRO, Australia鈥檚 national research organisation, have their headquarters there, including teams working on soil engineering and horticulture. CSIRO spends about $150 million each year on biotechnology. 鈥淲e鈥檙e Australia鈥檚 largest biotech research organisation: we鈥檙e in nearly every aspect of biotech you can be in,鈥� says Mikael Hirsch, CSIRO鈥檚 biotech coordinator.

Western Australia is also building on a strong agricultural biotech base. The Western Australian State Agricultural Biotechnology Centre, based at the Murdoch University campus in Perth, has a range of specialist facilities and leases cheap lab space to growing companies. These include Grain Biotech Australia, which in August launched three new varieties of wheat, bred for their resistance to various diseases.

Plants are also a strong focus for biotechs in Queensland, but more for the bioactive compounds they contain than agricultural research. The state is home to extraordinary biodiversity, with 19 terrestrial bioregions and 17 marine bioregions, making it highly attractive for bioprospectors (see 鈥淏ioprospecting: a natural advantage鈥�). Top-class scientists and facilities come relatively cheap. Ecobiotics, a local bioprospecting company, outsources all its non-core research, using the Queensland Institute of Medical Research in Brisbane to do anti-cancer testing and CSIRO Molecular Sciences in Melbourne for chemical analysis. 鈥淲e access world-class facilities at a much lower cost than somewhere like the US,鈥� says co-founder Victoria Gordon. 鈥淲ithin Australia we have the infrastructure to support these sorts of activities, and at a cheaper rate.鈥�

Queensland was the first state to launch a concerted biotech push, in 1999. It continues to provide strong support for its local businesses, partly through funding programmes such as BioStart, and the Queensland Investment Corporation, which is wholly owned by the state government.

Proteome Systems, the largest private biotech in the country, is just one company that has received a cash boost from the Queensland Investment Corporation. The company is concentrating on advancing proteomics technology, and on developing diagnostics, biomarkers and drugs. Its biggest sales at the moment are in technology, but its first tests 鈥� for wheat quality, for instance 鈥� only hit the market last year. The company plans to float on the Australian Stock Exchange early next year, and expects to raise around $50 million. 鈥淲e鈥檙e unusual among Australian biotechs in that we have substantial revenue, and we鈥檙e not a long way from being cash flow positive,鈥� says Proteome鈥檚 CEO Keith Williams.

Venture capitalists鈥� recently increased interest in Australian biotech has been accompanied by a spate of flotations. The pioneer was Select Vaccines, which floated on the stock exchange in July and doubled its share price within the first two days, despite having no commercial contracts. Investor confidence was buoyed up by the company鈥檚 prospects for developing rapid-test kits for a variety of diseases. 鈥淲e have a system that allows a test to be done on just a small drop of blood, and we think we can apply it to a range of diseases,鈥� explains CEO Martin Soust. Select is now finalising a licensing agreement for a diagnostic kit for hepatitis E. The company, which employs 11 people in R&D, is also working on vaccines and therapeutics.

Soust, who is also CEO of a small medical devices company called Premier Bionics, sees a bright future for Australian biotechs. 鈥淭he financial markets have opened their arms to biotech, generally speaking, and the Australian financial markets have a pretty strong appetite for the life sciences,鈥� he says. 鈥淭he sector is well supported, and I think that will continue.鈥�

Karelis is less sure about the prospects of some of the small companies. 鈥淵ou see a whole pile of very small companies listed on the stock exchange here that really shouldn鈥檛 be there,鈥� he says. 鈥淭heir technology might not even be world class or protected.鈥�

But there are certainly enough strong companies, and the promise of more to come, to make him optimistic about the overall future of Australia鈥檚 biotech industry. 鈥淭here鈥檚 a lot of work to do in order for Australia to generate a whole stable of biotech companies and become a leading world hub, but it certainly has a good chance,鈥� he says.