Thursday, 24 July 2014 Sydney
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Australia - Biotech Sector::

OVERVIEW

 

Australia has a well-established reputation for biotechnology and is now the world’s fifth largest biotech centre. Australia has key capabilities in human therapeutics, agricultural biotechnology, diagnostics, medical devices and bio-discovery. There’s also emerging strong focus on the environment and clean technology. Other growth areas for the Australian biotech industry include intensive agriculture for biofuels, food and aquaculture, biosecurity, therapeutics targeting the aging population and issues such as obesity, regenerative medicine and wellness. The global credit crisis is putting increasing pressure on biotechnology companies seeking funding as investors seek lower risk opportunities.  Increasing consolidation is likely among the smaller and unlisted companies as funding becomes more difficult to obtain. Most major international pharmaceutical companies and agribusinesses are represented in Australia. There are also a number of mining and food processing companies with specialist interests in biotechnology.

 

TRENDS


  • An aging population: The Australian population is aging quickly and greater life expectancy has increased the incidence of age-related illnesses, which will increase the demand for medical treatments. Moreover, as the resources available to the public sector fall, governments will seek to reduce the cost of treatment by utilizing drugs and preventative treatments developed by the industry.

 

  • Other demographic trends: Increasing demand for not only curative treatments, but also for preventive treatments. Also, increasing demand for elective surgeries and treatments spurring demand for safer and less invasive medical technologies.

 

  • A growing acceptance of biotechnology by the community, including therapeutic cloning and genetically modified food crops: Research conducted by Biotechnology Australia in 2007 into attitudes on biotech found a substantial increase in the level of support for the use of gene technology in both medical and agricultural applications.


KEY FORECASTS


The existing biotech business infrastructure and expertise and the burgeoning health care market in Australia make the future of biotech very lucrative. Australia is the most attractive market for pharmaceutical investment in the Asia-Pacific region, which is primarily due to its growing and aging population, excellent access to medicines, and fast-recovering economy. Life expectancy in Australia is 79.2 years for males and 84.1 years for females, which is among the highest in the world. High life expectancy amongst Australians has led to an increase in lifestyle diseases resulting in an increase in healthcare spending.

 

 

INDUSTRY DEVELOPMENTS

 

Australia is home to a thriving network of 470 biotechnology companies. Of these, 49 per cent are involved in therapeutics, 15 percent in agricultural biotechnology and 13 per cent in diagnostics. Australia has a well-established medical device industry, a strong position in nano-biotechnology and is internationally regarded for its expertise in stem cell research. Australian biotechnology companies continue to develop and bring drugs to market, including:

 

  • CSL – the cervical cancer vaccine – Gardasil – marketed by Merck & Co.

 

  • Biota – the influenza drug Relenza – marketed by GlaxoSmithKline.

 

  • Sirtex Medical – the liver cancer treatment – SIR-Spheres

 

  • Peptech (now Arana Therapeutics) – IP related to anti-tumor necrosis factor (TNF) drugs – Remicade – marketed by Centocor, and Humira – marketed by Abbott Laboratories.

 

 

MARKET SIZE

 

Australia’s key industry figures for the biotechnology market (2009) are as follows:

 

Key Industry Figures

2009

Industry Revenue 

1,606.8  $ million

Revenue Growth

.9 %

Industry Gross Product

956.5 $ million

Number of Establishments

520 Units

Number of Enterprises

510 Units

Employment

7,025 People

Exports

--

Imports

--

Total Wages

787.3

             

KEY PLAYERS

 

CSL Limited 

Commonwealth Scientific & Industrial Research Organisation

Biota Holdings Limited


GROWTH FIGURES AND FDI FIGURES

 

The global credit crisis is putting increased pressure on biotechnology companies seeking funding as investors seek lower risk opportunities. Increasing consolidation is likely among the smaller and unlisted companies as funding becomes more difficult to obtain.

 

The Asia Pacific region has the potential to account for 28.5% of the total global pharmaceutical market and generate $260 billion revenue by the end of 2012, according to a forecast by Simranjit Singh, director of market research firm Frost & Sullivan. Charting a solid 12.9% compound annual growth rate (CAGR) throughout 2009-2012, the Asia Pacific pharmaceutical market is looking at the next wave in evolution. Long term usage of multiple and specialized drugs, ever increasing aging population, shorter life expectancy, early chronic disease diagnosis and major drug patent expiries are key contributing factors leading governments to favor production and prescription of generics.

 

The healthcare market in Australia will continue to grow at a CAGR of 6.2 percent to reach approximately $16 bn by 2012 and this bodes well for biotech. The pharma sector alone is expected to grow at CAGR of 4.7 percent with $10 bn revenue by 2012. “Growth will be largely driven by increasing demand for lifestyle disease drugs among aging population; the uptake of new, expensive drugs; and strong government support for generics,” said Mr Simranjit Singh, Director, Frost & Sullivan.

 

Stock of Foreign Direct Investment in Australia by Industry:


Industry

$ million

% share of total

 

Agriculture, forestry and fishing

 

700

 

0.2

 

Mining

 

99,659

 

25.4

 

Manufacturing

 

73,848

 

18.8

 

Electricity, gas and water

 

16,105

 

4.1

 

Construction

 

13,037

 

3.3

 

Wholesale and retail trade

 

57,093

 

14.5

 

Accommodation, cafes and restaurants  

 

914

 

0.2

 

Transport and communication

 

25,929

 

6.6

 

Finance and insurance

 

53,143

 

13.5

 

Property and business services

 

33,830

 

8.6

 

Other services

 

6,105

 

1.6

 

Unallocated

 

12,500

 

3.2

 

Total

 

392,862

 

100

 

RECENT DEALS

The Australian Federal Government has announced a range of new funding programs as part of its “Clean Business Australia” initiative. This includes A$75 million over four years under the “Climate Ready” program aimed at developing solutions to climate change challenges.

 

The Japanese pharmaceutical company, Daiichi Sankyo, has entered into a deal with Australian ASX-listed Australian biotech company Biota Holdings. Diichi Sankyo received approval in Japan to manufacture and market a new treatment for influenza developed by Biota Holdings. As part of the agreement, Daiichi Sankyo will undertake extensive Japanese clinical trials and pay Biota a royalty on all sales in Japan. The Biota product - Inavir® (laninamivir octanoate) - is the first drug of a new class of long acting neuraminidase inhibitors to address the limitations of current products which require daily or more frequent dosing.

 

INVESTMENT OPPORTUNITIES

 

Opportunities exist across a wide range of areas from supplying inputs to the sector to highly specialized products for sectors such as medical devices, the environment and agribusiness. Enabling technologies are also in demand such as diagnostic equipment, along with industry-related products such as edible coatings, novel foods and packaging and foodstuffs with added therapeutic value. Areas of potential collaboration include: clean technology, bio-prospecting, bio-security, environment, human therapeutics and devices and regenerative medicine.

 

The Australian Government places a premium on world-class innovation and actively promotes R&D. Multinational enterprises that conduct R&D in Australia, but hold the associated IP in their home jurisdictions, can gain access to an R&D tax concession worth 175 per cent of their R&D investment.

 

RESOURCES: INDUSTRY GROUPS AND ORGANIZATIONS

 

Ausbiotech is Australia's biotechnology industry organization, which represents over 3,000 members, covering the human health, agricultural, medical device, bioinformatics, environmental and industrial sectors in biotechnology. http://www.ausbiotech.org

 

Australian Biotechnology Association (ABA) is a national body of companies and individuals dedicated to the development and prosperity of the Australian biotechnology industry, http://www.aba.asn.au.

 

Current Investment Opportunities in Australia:

 

For current investment opportunities in Australia, please click here  :   http://investinaustralia.com/current-opportunities

 

 

 

 

 

REFERENCES

  1. Unknown, "Biotechnology market in Australia," New Zealand Trade & Enterprise, 2008, http://www.wineaustralia.com/USA/LinkClick.aspx?fileticket=0uzw2QA33DQ=&tabid=3833.
  2. Unknown, “Biotechnology, a powerhouse for science and innovation”, Australian Trade Commission, 2010, http://www.austrade.gov.au/Invest/Opportunities-by-Sector/Biotechnology/default.aspx.
  3. Editors, “The Australian Pharmaceutical Market Outlook to 2015: Policy environment, market analysis, key trends, growth opportunities and competitive landscape”, ReportLInker, July 2010, http://www.prnewswire.com/news-releases/reportlinker-adds-the-australian-pharmaceutical-market-outlook-to-2015-policy-environment-market-analysis-key-trends-growth-opportunities-and-competitive-landscape-97845719.html.
  4. Unknown, “Biotechnology, a powerhouse for science and innovation”, Australian Trade Commission, 2010, http://www.austrade.gov.au/Invest/Opportunities-by-Sector/Biotechnology/default.aspx.
  5. Editors, “Biotechnology in Australia: Australian Industry Report”, IbisWorld, June 2010, http://www.ibisworld.com.au/industry/default.aspx?indid=1901.
  6. Editors, “Biotechnology in Australia: Australian Industry Report”, IbisWorld, June 2010, http://www.ibisworld.com.au/industry/default.aspx?indid=1901.
  7. Editors, “Asia-Pacific region pharma market set for near 13% CAGR, making up 28.5% of global sales by 2012; strong prospects in Australia”, The Pharma Letter, July 2010, http://www.thepharmaletter.com/file/96613/asia-pacific-region-pharma-market-set-for-near-13-cagr-making-up-285-of-global-sales-by-2012-strong-prospects-in-australia.html.
  8. Editors, “Pharma market in Australia to touch $10 billion by 2010”, BioSpectrum: Asia Edition, July 2010, http://www.biospectrumasia.com/content/150710AUS13093.asp.
  9. Unknown, "Biotechnology market in Australia," New Zealand Trade & Enterprise, 2008, http://www.wineaustralia.com/USA/LinkClick.aspx?fileticket=0uzw2QA33DQ=&tabid=3833.
  10. Editors, “Japanese pharma in deal with Australian biotech”, Australian Trade Commission, October 2010, http://www.austrade.gov.au/Invest/Investor-Updates/101008-Japanese-pharma-in-deal-with-Australian-biotech/default.aspx.
  11. Editors, "Biotechnology market in Australia," New Zealand Trade & Enterprise, 2008, http://www.wineaustralia.com/USA/LinkClick.aspx?fileticket=0uzw2QA33DQ=&tabid=3833.
  12. Editors, "Biotechnology market in Australia," New Zealand Trade & Enterprise, 2008, http://www.wineaustralia.com/USA/LinkClick.aspx?fileticket=0uzw2QA33DQ=&tabid=3833.
  13. Unknown, “Biotechnology, a powerhouse for science and innovation”, Australian Trade Commission, 2010, http://www.austrade.gov.au/Invest/Opportunities-by-Sector/Biotechnology/default.aspx.