R&D Tax Credit positions Australian biotechs for Asian boom

Cook Medical is looking forward to capitalising on the growth taking place in the Asia Pacific region with the help of the R&D Tax Credit, which the Federal Government recently announced will pass in to law this year.

Barry Thomas, Managing Director of Cook Medical Australia, says the R&D Tax Credit will help direct more research funding to Australia, particularly for research into technologies to cater for the Asia Pacific market.

Cook Medical is a US-headquartered medical company that specialises in a range of areas, including endovascular therapy, diagnostics and gastroenterology and endoscopy procedures, with a division based in Australia, in Queensland.

According to Thomas, R&D is a significant part of the company culture and philosophy, with it investing around $90 million each year of its own money in research rather than calling on external sources of funding.

As such, the R&D Tax Credit provides a good incentive and reduces the risk of performing more research and bringing more research dollars from overseas in to Australia.

And this is particularly good as Australia is ideally located to cater for the Asian market, says Thomas. “The question is: how do we take advantage of our position in the world. The major growth is in the Asia Pacific region, so we’re ideally placed,” he told ALS.

“So how can we benefit from that and use our expertise in R&D to look at products that would specifically apply to Asian populations?”

Thomas reckons the R&D Tax Credit should see greater research dollars directed towards the Australian division, with the company already planning to begin a number of programmes, including one that will see graduates hired to specifically work on R&D.

For Thomas, the R&D Tax Credit is even a superior alternative to the Commercial Ready scheme, which was scrapped by Labor under Kevin Rudd, particularly for privately owned companies.

Where Commercial Ready required companies to disclose significant amounts of information about the company and its plans in order to receive funding, the R&D Tax Credit is easier to apply without the same information requirements.

Thomas did express some reserved optimism when it came to the as yet untested definitions of what research qualifies for the Tax Credit, but he’s happy to work with the government to clarify these definitions.

“Many people are negative about these definitions,” he told ALS. “But let’s participate and work our way through these things.”