Bullish biotech industry set to increase staffing

The annual Biotechnology Industry Position Survey shows the bullish sentiment for the industry’s future continues, while the operating environment (economic and public policy) remains a concern.

The industry’s confidence, reported in 2011, continues with 82% of respondents expecting their business to grow in the coming year, while 68% characterised last year as a good or excellent year. The expansionary approach to employment that emerged during 2009 persists with a majority of companies (58%) indicating they will increase staffing numbers in the coming year.

However, the Australian operating environment (economic and public policy) remains a concern for the growth of biotechnology companies, with two in five companies (38%) saying it was working against their growth.

Dr Anna Lavelle, CEO of AusBiotech, says: “The Australian biotechnology industry has performed strongly despite an unpredictable economic market and Australia continues to be a leading location for biotechnology in the Asia-Pacific region and the world, ranked the fifth most innovative in the world.

“The Australian industry has received a major boost with the 2011 passing of the R&D Tax Incentive legislation which was a significant event with 65% of companies confident it will have a positive impact on their business. However, the federal government is urged to consider: further incentives for investment; a greater quanta of targeted funding support; and provide predictability for policy and programs.”

Collectively, the 50 responding biotechnology companies plan to spend at least $610 million on research and development in 2012. With the industry estimated to encompass 1000 companies (400 biotechnology and 600 medtech), the industry is making a significant contribution to research and innovation in Australia.

Michael Cunningham, Head of Life Sciences, Grant Thornton Australia, said: “There are currently in excess of 100 ASX-listed life sciences companies: almost 40 in medtech and more than 60 in biotechnology, after three IPO listings in the past year.”

Despite 54% of respondents raising capital during 2011, funding remains a significant industry issue with 34% of companies indicating they have less than 12 months’ cash on hand at current burn rates. Almost half (46%) intend to raise capital in the coming year.

The industry is also making a contribution to manufacturing, with the majority of responding companies (62%) manufacturing in Australia, overseas or both.

The survey, undertaken by AusBiotech and Grant Thornton Australia, provides an industry snapshot, direct from the industry’s CEOs and senior managers on three topics: sentiment, funding and public policy.