Australia's biotech boom to continue
The Australian life sciences and biotech industry is witnessing a resurgence in activity, which is expected to continue over the next 12 months.
To get some insights on the state of the Australian biotech industry, Mansi Gandhi interviewed Dr Katharine Giles*, Brandon Capital Investment Manager. Dr Giles was recently recognised in the 2018 40under40 Business News Awards for her work in the medical and investment fields, and for educating and inspiring the medical innovation community of Western Australia.
Lab+Life Scientist: What are your thoughts on the current state of the Australian life sciences and biotech industry?
Dr Katherine Giles: The Australian life sciences industry is in a really strong position. There is plenty of world-class science and research being conducted and there is greater access to local venture capital than ever before, strengthening the whole ecosystem. MTPConnect has been great at fostering collaboration and connectivity. Through its Project Fund Program scheme, they’re helping institutes get over the key early-stage barriers involved in commercialisation, such as building clinical trial capability by providing funding grants.
While Australia has a strong tradition of conducting great science, traditionally the ecosystem for supporting commercialisation and connecting researchers pursuing this pathway to impact was fragmented — there was an opportunity for greater coordination of Australia’s medical research talent and capabilities. There is a lot more cohesion and support within the community now and researchers have multiple options available to upskill in the commercialisation process and engage with industry.
The Medical Research Commercialisation Fund (MRCF), a collaboration between major Australian superannuation funds, over 50 medical research institutes and research hospitals in Australia and New Zealand, has been working to bridge the gap between science and translation for over 10 years. The MRCF is managed by Brandon Capital. Our collaboration is one way we contribute to the ecosystem.
The R&D Tax incentive scheme is invaluable for encouraging companies to carry out work in Australia. It also attracts overseas companies, particularly from the UK and US, to Australia for advanced clinical development.
A key challenge, but also something that is positive and results from a surge in activity, is accessing experienced management talent.
LLS: What are currently the most exciting areas in biotech?
KG: The MRCF research members are continuing to conduct great research so exciting opportunities are coming to us all the time, covering an extremely wide range of disease areas and technologies.
In particular, the application of technology from outside the life science sector is an exciting and growing area. Technological advancements are bringing a lot more opportunities to the biomedical sector, with potential for new applications.
In Western Australia, there are a number of medical device companies being established. At OncoRes Medical, one of the MRCF’s portfolio companies, we’re developing a handheld imaging probe and console which will provide real-time intraoperative guidance to surgeons by assisting to delineate tumour from a healthy tissue, with the aim of improving the outcome of breast cancer surgery.
In breast cancer surgery, it’s often difficult to remove the entire tumour. Around 25% of patients undergoing breast-conserving surgery will need another surgery to remove residual malignant tissue not removed in the first operation. The technology being developed at OncoRes will help surgeons identify residual cancerous tissue remaining within the breast so it can be removed during surgery, reducing the need for repeat surgery.
These additional surgeries are a $1 billion-a-year cost to the healthcare system in the US and Europe, creating a huge need for a tool that can provide real-time information on whether cancerous tissue remains, increasing the likelihood that it is completely removed during the first operation.
In life sciences, you never know where you’re going to find inspiration and solutions, so you need to be open-minded.
LLS: What do you expect to be the main themes/trends for the next 3–5 years?
KG: We will see continued maturing of the sector. As the sector develops further there will be an increased need for collaboration between multidisciplinary teams. For example, if you are a scientist in the lab, and you have an idea you’re trying to commercialise, having a clinician on your team is essential. With Australia’s life science ecosystem becoming more cohesive, there will be more opportunities for scientists to work with those clinicians, and clinicians will also be looking for ways to collaborate.
In the next few years, more companies will successfully take products into clinical development. As Australian start-ups successfully develop therapies, tools and treatments that positively impact patient care, we will see more mid-stage, maturing companies with larger teams emerge. We also expect to see a steady flow of larger exits. Australia is likely to see more corporate activity from global companies as we are very much on everybody’s radar at present.
LLS: What are some of the challenges facing the Australian life sciences industry?
KG: Australia has great fundamental research, and now has more capital for development than ever before. The $500 million Biomedical Translation Fund, which was created by the Australian Government in 2016, has been a game changer. It’s a once-in-a-generation initiative to make Australia a global leader in commercialisation of biomedical discoveries. Under the initiative the government has made $250 million available, with the remainder coming from private investors, managed by three venture capital firms. Brandon Capital has been appointed to manage the $230 million MRCF BTF fund.
Access to human capital is a key issue. We’re facing a skill shortage and we want to attract experienced biotech and medtech management and R&D experts to return or move to Australia to help us grow emerging companies.
LLS: What advice would you offer to emerging biotech companies looking at funding/commercialisation?
KG: Prepare yourself for a long journey and get access to as much expertise as possible — you can never have too much in this industry.
It’s important to understand the clinical need you’re trying to meet is vital and also have knowledge of what’s already happening in the field. It’s critical to know things like “Do other treatments or products exist for this area?”, “Who’s developing what?”, “What methods are being used?”, “Why is my solution better than others?” and “Who will pay for this treatment?” I’d also suggest seeking advice from intellectual property experts at an early stage during the development process in order ensure all work is protected by a patent.
To get a foot in the door with investors, try and get a warm introduction as opposed to cold calling. If you are working or studying in biotech, there will be someone who can make an introduction to an investor and it’s an automatic way in.
It is never too early to start a dialogue with us. Whilst our head office — co-located with 13 of our companies — is in Melbourne, we also have team members in Perth, Sydney, Brisbane, Adelaide and Auckland.
LLS: Where are you at with MCRF 3 and MCRF BTF? How much money do you have left to invest?
KG: We are really excited by the prospects of MRCF3’s portfolio. MRCF3, a fund of $200 million, was started in May 2015 and will be three years old at the end of April. So far, 18 investments have been made. Of the 18 companies, 12 are new start-ups, with the MRCF investment being the first funding round provided to the companies.
It is early days for the MRCF BTF, a $230 million fund which started in January 2017 and is focused on Australian companies developing clinical stage technologies. Through the MRCF BTF, we’ve been reviewing some really interesting companies and we will be making announcements on investments from this fund over the coming months.
LLS: What attributes do you look for in a potential investment?
KG: When making an investment, we look for world-class technology that has the potential to make a significant difference to patients if brought to market.
It needs a strong intellectual property position and needs to have long-term relevance, because by the time it’s gone through all the research, development, trial and manufacturing phases to get to market, it may have been 10 or more years. We also look for investments where we can make a difference and add value as the manager, and where our funding will help the company progress to the next stage.
As Brandon Capital has started 32 companies of the 37 it has invested in over the last 10 years, we are very happy to work up a business plan with the entrepreneur and to even help manage the company in its early days, including recruiting the management team. Professional relationships play a large part in a company’s success and one of the key competitive advantages at Brandon Capital is the networks we’ve established and maintained in the commercial, technical and clinical fields both here and overseas.
LLS: Tell us about the five most exciting investments in your portfolio?
KG: There are 25 active companies in the Brandon Capital’s MRCF portfolio at the moment and we are excited about them all.
A few of particular note are:
- PolyActiva, a biotech company based in Melbourne, has developed a unique drug-polymer conjugate technology that enables slow release, site-specific drug delivery from medical device components directly at the site of action.
- OccuRx, a Melbourne-based company founded and led by Professor Darren Kelly, one of Australia's top life sciences entrepreneurs, is developing a drug aimed at curing retinal blindness.
- QueOncology, a University of Queensland spin-out, is creating a non-hormonal therapy for the treatment of host flushes in women undergoing endocrine therapy for breast cancer. The company also has preclinical programs in the areas of cancer-related pain, as well as two novel targeted anticancer therapies.
- Osprey Medical is developing the CINCOR System for advanced kidney protection during cardiovascular procedures. The system is designed to remove dye (contrast) from the heart before it can enter the kidneys and cause damage.
- Global Kinetics Corporation (GKC) provides point-of-care measurement and reporting of Parkinson’s disease (PD) motor symptoms so that neurologists and professional carers can better manage the symptoms of PD, leading to better quality-of-life outcomes.
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