The Federal Government should introduce more incentives to boost investment in biotechnology, a major industry player has argued, despite some recent high-profile deals in the high-risk sector.
According to Dr Jackie Fairley, chief executive of Starpharma Holdings, existing government incentives are not yet enough.
Starpharma has grown into a $440 million company in the past decade. Its lead product is condoms coated with the antimicrobial VivaGel, and it has partnered with names such as Ansell.
Fairley told the Australian Financial Review that while programs such as Commercialisation Australia have helped, there remains a gap in incentives for investors.
Fairley said the government should make early-stage funding more attractive to investors, saying the industry would benefit greatly from incentives for investors in the form of tax breaks.
“This is done by providing incentives for professional investors to invest as opposed to a government as an industry policy allocating funds,” Fairley said.
“My belief is the government should provide an environment where the venture capital industry can develop and allow companies to flourish.”
“In the United States, the incentives for people to invest in technology are far higher.”
Fairley’s comments echo the sentiments of former Queensland premier Peter Beattie, who recently urged investors to support emerging industries in the health and life sciences sector.
According to Beattie, supporting early-stage development is crucial to ensure innovative ideas become viable before “they were lost to someone else”.
Indeed, it seems some biotech companies are opting to do deals outside of Australia.
For example, Melbourne-based company Cardia Bioplastics – a market leader in sustainable and renewable bioplastics technology – has signed a deal with the US-based Sealed Air Corporation.
Cardia Bioplastics has announced it will supply the global packaging leader with its Biohybrid sustainable resin to produce Sealed Air’s Fill-Air R5 inflatable packaging.
The financial details of the supply remain confidential; although the directors of Cardia Bioplastics are confident the supply will “materially contribute” to Cardia’s sales revenues.
Of course, not every deal in the biotech sector is happening offshore.
Last month, a $15 million investment in an Australian biotech start-up was judged the Best Venture Capital Investment at the 2012 Vaccine Industry Excellence Awards in Washington.
Australian venture capital firm OneVentures led a $15 million investment in Vaxxas, which developed a needle-free vaccine system under the direction of Dr Mark Kendall.
The investment, which included co-investors Brandon Capital Partners, the Medical Research Commercialisation Fund and US-based HealthCare Ventures, was made just seven months ago.
It enabled Dr Kendall – and his team at the University of Queensland’s Australian Institute for Bioengineering and Nanotechnology – to take Nanopatch into commercial development.
Dr Paul Kelly, OneVentures partner and chairman of Vaxxas, accepted the award on behalf of the investors and the company.
“The investment is significant because of its size, which ensures the company has appropriate initial funding to achieve key development and commercial milestones,” he said in a statement.
“These resources are not just financial but expertise, networks and the experience in… taking novel technologies through to innovative products.”