Govt pledges $66m for COVID-19 research — but will it save the sector?
As the federal government announces further funding for research into COVID-19, some members of Australia’s biotech community feel like they’re missing out on much-needed support.
The Australian Government has announced it is investing $66 million into finding a vaccine and treatments for COVID-19, as well as better preparing for future pandemics. The funding is available through the Medical Research Future Fund (MRFF), extending the $30 million already pledged for the Coronavirus Research Response, and seeks to target four areas of research:
- Investing in a vaccine for COVID-19.
- Investing in antiviral therapies for COVID-19.
- Clinical trials of potential treatments for COVID-19.
- Improving the health system’s response to COVID-19 and future pandemics.
Investing in a vaccine for COVID-19
The University of Queensland (UQ) will receive a further $2 million for its innovative ‘molecular clamp’ technology, which allows new vaccines to be developed within months, rather than years, in response to emerging diseases. This brings the total Australian Government investment in this to $5 million.
The government is also announcing a further $13.6 million to support promising COVID-19 vaccine development projects in 2020–21. Through an open competitive grant opportunity, an independent panel of experts will assess expressions of interest and invite formal applications from the most promising projects. The grant opportunity will be open between 15 June 2020 and 15 March 2021, with expressions of interest assessed from 15 July 2020, 15 November 2020 and 15 March 2021.
Investing in antiviral therapies for COVID-19
The government is providing $7.3 million to nine research teams to support the development of promising antiviral therapies for COVID-19, of which there are currently none.
The Walter and Eliza Hall Institute will receive $1 million for the VirDUB research project, which aims to develop medicines that stop COVID-19 from hijacking human cells and disabling their anti-viral defences. By targeting a viral system that is found in a range of coronaviruses, VirDUB may lead to new medicines that could be instantly available to tackle potential future coronavirus disease outbreaks.
The most successful of the projects awarded under this round will have an opportunity to seek additional funding of up to $10 million to accelerate their therapy to clinical practice, including for human trials.
In addition, $2 million is being provided to an innovative project using stem cell-derived tissues to rapidly test drugs already approved for use in humans for activity against COVID-19. In the early stages of the program, the Peter Doherty Institute for Infection and Immunity and the Queensland Institute of Medical Research Berghofer will commence this important work. Other laboratories will be able to join in coming months.
Clinical trials of potential treatments for COVID-19
The government is providing $6.8 million to support seven clinical trials investigating treatments for the severe respiratory symptoms of COVID-19. The clinical trials supported by this funding will investigate treatments for critically ill patients, healthcare workers and vulnerable cancer patients.
Improving the health system’s response to COVID-19 and future pandemics
UNSW will receive $3.3 million from the government for genomics research into the behaviour, spread and evolution of the SARS-CoV-2 virus. Genomics essentially barcodes every virus so we know who is infected with the same virus — as people in a cluster will have an identical barcode. This is critical to supporting public health responses to outbreaks as restrictions on gatherings are lifted.
Further investment in a national health system response to COVID-19 includes:
- $4 million for digital health research infrastructure to help health systems respond faster to high-need emerging challenges. This competitive grant opportunity opened on 2 June 2020.
- $2 million for research into the human immune response to COVID-19 infection, particularly in at-risk people. This competitive grant opportunity will open on 12 June 2020.
- $600,000 for research to understand the community’s information needs and behavioural drivers during outbreaks, and strategies to address these. This competitive grant opportunity opened on 2 June 2020.
These and other projects build on $14.4 million of previously announced COVID-19 research investment, including into improving the way we diagnose the virus and how we care for patients with COVID-19.
Call to support the life sciences sector
But while funding for individual projects is welcome, it is claimed that a COVID-19 response package is required to support the Australian life sciences sector as a whole, which is valued at over $170 billion. That’s according to Dr Chris Nave, CEO of Australia’s largest life science investment fund: the Medical Research Commercialisation Fund (MRCF).
With the majority of the county’s biotech and medtech companies not eligible for the JobKeeper wage subsidy, coupled with vital investment capital rapidly drying up, Dr Nave said R&D companies are in trouble and many will struggle to survive the current crisis without access to government support.
“While the JobKeeper policy is vitally important for so many sectors, it does not support pre-revenue innovation companies still in the product development phase for their technology,” Dr Nave said.
“While I’m confident this is not a deliberate omission by the government, biotechnology is a unique sector and therefore requires a unique response. If a lifeline is extended quickly, the sector will be in a position to deliver on its potential of providing significant wealth and medical benefits to Australia in the years after this crisis has passed.”
The MRCF thus proposes the following initiatives to support the life sciences sector:
- Change the eligibility of the JobKeeper wage subsidy scheme so that pre-revenue companies, with genuine R&D programs that have been disrupted by COVID-19 can access the wage subsidy scheme and keep staff employed. Under current rules, companies are only eligible if they can demonstrate a 30% loss of income, which does not apply to pre-revenue R&D companies.
- Fast-track R&D Tax Incentive (RDTI) payments for the 2019–2020 financial year or provide quarterly instalments based on projections from July 2020. Under the scheme, which provides a 43.5% rebate for investment in R&D made by businesses with a turnover of less than $20 million, companies must have pre-registered R&D activities for this year which are offset in their annual tax return for the year ending 30 June. Most companies will not receive the cash rebate for this year until October to December, or early 2021.
- Scrap controversial legislative changes to the RDTI agreed in the April 2019 Federal Budget, which would cut $1.35 billion to the program and were due to be passed into law before 30 June this year. Because of the current economic turmoil, this is unlikely to happen and is an opportunity for a rethink by the current Senate committee tasked with making changes to the RDTI Bill.
- Free up a proportion of the MRFF to make it available to fund the commercialisation of promising Australian discoveries, in recognition that capital availability to the sector is rapidly evaporating due to COVID-19.
“For the next 6–12 months it’s going to be challenging for biotech and all innovation companies to raise capital from their traditional sources — super funds, venture capital, private equity and high-net-worth individuals — as all have experienced financial challenges due to COVID-19,” Dr Nave said. “To overcome this short-term credit crunch, government-backed capital should be used to bridge the funding gap, and accessing capital from the MRFF and RDTI scheme seems an obvious choice. Both could pivot for this purpose with little required in additional funding or policy change.”
Industry body AusBiotech is currently seeking a class ruling on the JobKeeper wage subsidy scheme from the Tax Commissioner, formally requesting that biotech companies be included. In addition, leading Australian tech figures are supporting a petition to suspend the senate inquiry into the RDTI changes for at least six months and introduce a six-month moratorium on tax office claw-backs against recipients for the scheme. Over 3700 have signed the petition.
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