Market Information
Asia Pacific

The Biotechnology Industry
in Australia

April 2002

© Department of Foreign Affairs and International Trade
FaxLink # 42577

Report prepared by the Market Research Centre
Market Support Division (TCM)
Department of Foreign Affairs and International Trade
125 Sussex Drive, Ottawa K1A 0G2
Fax: (613) 943-1103
E-mail: mrc@dfait-maeci.gc.ca

The Market Research Centre produces a wide range of market reports by region and sector for Canadian exporters. These reports are available from:
- DFAIT's InfoExport Internet site (http://www.infoexport.gc.ca).

The Government of Canada has prepared this report based on primary and secondary sources of information. Readers should take note that the Government of Canada does not guarantee the accuracy of any of the information contained in this report, nor does it necessarily endorse the organizations listed herein. Readers should independently verify the accuracy and reliability of the information.

Quick Facts

• The Australian biotechnology industry is made up of190 core biotechnology companies. Most are small or medium-sized, with a small number of larger international players.
• There are approximately 450 non-core or biotechnology related companies.
• The three main areas of product development in the industry are human health, equipment and services, and agricultural biotechnology.

Opportunities

• The maturity of the Australian market, and similarities with Canadian firms in structure and funding, make Canadian biotechnology companies obvious partners for Australian companies. Partnerships, licensing agreements and strategicalliances drive the industry, and Canadian and Australian companies have similar strengths inhuman health and agricultural biotechnology.

Key Players

• Key players in the Australian biotechnology marketare CSL Limited, FH Faulding and Co., Mayne Health Cochlear, Resmed, Amrad, Biota, Circadian and Gradipore with another 20 companies gaining importance within the industry.

Most major pharmaceutical and agricultural biotechnology multinationals have established operations in Australia.

Regulatory Environment

• The Gene Technology Act 2000 created the Office of the Gene Technology Regulator (GTR) which came into effect June 2001 to monitor and regulate the use of genetically modified organisms (GMOs) in Australia.
• All pharmaceutical products must pass through regulatory requirements set out by the Therapeutic Goods Administration (TGA) located in Australia's capital, Canberra.

Quick Facts

• The Australian biotechnology industry is made up of 190 core biotechnology companies, representing an increase of approximately 70 core companies since 1999. An additional 450 companies are involved in biotechnology processes,services and applications. Most companies are considered small or medium sized,with a small number of larger international players. The industry employs almost 6000 people.
• There are approximately 60 biotechnology companies listed on the Australian Stock Exchange, 35 of which are considered core biotechnology companies.
• Product development in the industry focuses on human health, equipment and services, and agricultural biotechnology. The key areas of focus for the agricultural biotechnology industry is genetically improved livestock and improved aquaculture practices.
• Aquaculture, in collaboration with marine biology institutions, is fast becoming an industry of importance in order to sustain seafood export markets in the Asia-Pacific region.
• Industries not typically associated with biotechnology, such as Australia's world renowned wine industry (with exports of over $2.5 billion annually) is one of many industrial/commercial areas open to biotechnology research and development.

Source: Australian Biotechnology Report, 2001

• Australia has a small but dynamic biotechnology industry and has entered a strong growth phase. Although the industry has approximately 35% fewer companies than Canada in relative terms, the maturity of the Australian industryresembles the Canadian industry. There are a number of promising start-up companies and an increasing number of companies successfully floated on the Australian Stock Exchange (ASX) and other world stock exchanges. Thesetrends look set to continue while the investment climate remains positive.
• Australian biotechnology companies generated more than $800 million¹ inrevenue in 2000-2001 and there are over 150 products in clinical or field trials.The most significant sources of increased revenue from 1999 were in contract research, royalties, licensing fees and milestone payments. Company investment in research and development in 1999-2000 was approximately $130 million.
• The Australian biotechnology industry is supported by a large manufacturing base, owned by both Australian companies and multinational corporations. Most facilities produce pharmaceutical chemicals. A small number are involved in contract production of human biopharmaceuticals.
• There is strong government support for biotechnology in Australia, at both the federal and state levels. In 1999 the federal government established the Commonwealth Biotechnology Ministerial Council to co-ordinate biotechnology activity. The Council produced the National Biotechnology Strategy in July 2000 with an emphasis on creating the Biotechnology Innovation Fund (BIF) for startup and concept-level companies, stimulating public debate, and ensuring the necessary regulatory environment is in place for the industry to flourish. An additional $25 million from 2001 to 2004 was announced in the 2000-2001 Budget Statement to support initiatives under the National Biotechnology Strategy.
• Research and development in biotechnology receives government supportthrough a new program called Backing Australia's Ability, which funded a new Biotechnology Centre of Excellence, and provided additional funding to the BIF. Publically supported research for biotechnology is focused on the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the Co-operative Research Centres (CRCs).
• CSIRO has over 70 research laboratories covering various fields of scientific inquiry throughout Australia, employs more than 6000 people and has linkages to industry and other international research institutions. CSIRO research centres receive upward of $850 million in annual funding from public and private sources.Currently CSIRO is developing a commercialization division to accelerate R&D into production of marketable products.
• The role of the CRCs is to bring together university researchers with public sector businesses for collaborative research ventures. Funding is provided every two years, typically for a seven-year period.
• Approximately 30% of the country's biotechnology companies are located in New South Wales, 38% in Victoria, 11% in Queensland, and 8% in South Australia. Victoria, however, has the largest concentration of core biotechnology companies.
• In June 2001, the premier of the State of Victoria announced a $250 million plan to expand the state's biotechnology industry. The plan includes the construction of a synchrotron microscope facility. Other state-level support for biotechnology include Queensland's investment in the Institute for Molecular Biosciences. State funding is focused primarily on infrastructure development and business support.

Medical Biotechnology

• The Australian Pharmaceutical Manufacturers Association estimated that 45% of all new pharmaceuticals developed in 2000 were based on genomics or molecular biology, indicating the strong ties between the pharmaceutical and biotechnology industries.
• Non-government funding on research and development in the pharmaceuticalindustry totalled $250 million in 2000, and Australian drug exports totalled $1.5 billion in 1999-2000.

Agricultural Biotechnology

• Australia does not yet have any commercially grown genetically modified (GM)food crops, although field trials, primarily in canola, have been carried out in a number of regions of the country. There has been approval, however, for the commercial release of Roundup Ready/INGARD cotton. The Gene Technology Act 2000 requires that the location of all field trials be disclosed to the public through an Internet-accessible database.
• The Ministry of Agriculture announced in July 2001 a three-year study to determine if GM crops could be grown in Australia while preserving the GM-free identity of traditional crops. The investigation will consider everything from crops grown in neighbouring fields, through processing and existing systems to segregate crops.
• Public acceptance of GM food products has improved in recent years, with 49% in 2001 saying they would eat genetically modified foods, up from 25% in 1999. The same study indicated that 60% would eat GM foods if the foods had been modified to taste better.
• Tasmania instituted a moratorium on growing GM crops in 2000 by declaring them to be noxious weeds under state quarantine regulations. State government officials announced a two-year extension of the moratorium in July 2001 and are contemplating a complete ban in order to protect export markets for non-GM crops. The moratorium is not likely to extend to non-food crops, including trails of GM opium poppies for the pharmaceutical industry.

Opportunities

• There is an increasing emphasis on out sourced research and development from research institutions and universities among Australian biotechnology companies. This represents an opportunity for Canadian research centres to work collaboratively with Australians or act as a contract research organization with Australian companies.
• Australian companies continue to rely on international alliances as a route to international markets. Public funding and policies recognize this reality and have created a receptive environment for partnerships. Canadian companies represent valuable partners because of similar business practices and proximity to large markets.
• The maturity of the Australian market, and similarities in structure and funding make Canadian biotechnology companies obvious partners for Australian companies. Partnerships, licensing agreements and strategic alliances drive the industry, and Canadian and Australian companies have similar strengths in human health and agricultural biotechnology. Particular areas of opportunity include grain and oil seed crops, meat and dairy production, and aquaculture.

The Australian Biotechnology Report 2001 indicates that international alliances are increasingly important for Australian companies compared to domestic alliances. Since the preparation of a bio-partnering report in 2000 and the Australian/Canadian bio-partnering event at BIO 2001 in San Diego, joint ventures and alliances between Canada and Australia have doubled in number.

• Recent changes to corporate tax laws in Australia and changes set to take effect in 2002 will add additional incentives for Canadian biotechnology companies to work with Australians.

Key Players

• Dominant local players in the Australian biotechnology market are CSL Limited, Cochlear and FH Faulding and Co., although this former company has since fallen under the ownership of Mayne Health, Australia's largest hospital and pathology services operator.

Source: Australian Biotechnology Report, 2001

• Most major pharmaceutical and agricultural biotechnology multinationals have established operations in Australia. Investment in research and development by these large players is supplemented by the Pharmaceutical Industry Investment Program, which provides federal support when research and manufacturing operations are established in Australia.
• The Australian biotechnology association - AusBiotech - has established itself asa leading organization for biotechnology coordination in Australia. Canadian companies interested in the Australian market are encouraged to contact AusBiotech and take advantage of their services.

Regulatory Environment

• The Australian government supports the development of biotechnology as a key economic driver for the future and is working to maintain an open and transparent regulatory environment. The federal government is, however, proceeding with caution to ensure that a strong regulatory system is in place prior to the widespread release of GMOs into the environment. The Gene Technology Act 2000 created the Office of the Gene Technology Regulator(GTR) to monitor and regulate the use of GMOs in Australia, to assist with policy and guidelines, and to provide information to the public and other government agencies. A Technical Advisory Committee, a Community Consultative Committee and an Ethics Committee all support the work of the GTR.
• All GM crop trials must receive a licence from the GTR and all field trail locations are made public through the regulator's Web site. Companies may apply for private trials in order to protect corporate privacy; however, the criteria are quite strict, and to-date, very few requests for privacy have been accepted.
• Genetically modified food products must receive assessment and approval from the Australia New Zealand Food Authority (ANZFA). As of December 2001, GM food products must be labeled as such where:
• novel DNA or novel protein from the approved GMO is present in the final food. Those that have been highly refined to the point where no novel proteins are present do not need to be labeled; or
• the food has altered characteristics when compared to the conventional food, including altered nutrients and allergens.
• Foods derived from GMOs do not require labels if they are prepared at a point of sale (e.g. restaurants or caterers) or if the processing aid or additive does not leave additional proteins in the final food.
• All pharmaceutical products must pass through regulatory requirements set out by the Therapeutic Goods Administration (TGA). Approval times for human health products are on par with Canada and European approvals, but tend to be longer than U.S. Food and Drug Agency approvals. Approval standards are comparable internationally and there has been some discussion about continuing to harmonize approval procedures across jurisdictions.
• The signing of a Mutual Recognition Agreement on pharmaceuticals between Canada and Australia in March 2001 will assist in the regulatory processing through the TGA.

Venture Financing in Australia

• Growth in venture capital (VC) investment in life science companies has been exponential. In 1998-99 VC made nine investments in life science companies and by 1999-00 this figure reached 59 investments. This growth reflects both an increase in the supply of capital and the number of VC investors interested in lifesciences. It also reveals an increase in the number of high quality life science investment opportunities in Australia.
• In 2000, eighteen life science companies went public on the ASX, many at valuations of less than $30 million and raising less than $10 million, amounts that in a less exuberant public market would be the preserve of VC investors. As the public market appetite for very small under-capitalised life science companies dries up in 2001-02, we anticipate that the bigger VC investors will invest larger amounts in private companies.
• The venture capital market in Australia has access to approximately $4 billion of funds. Of this $2 billion is committed for future investments. The extent to which this future commitment is accessible by the biotechnology and closely related industries is not clear. However from the fund-raising achieved in the last year, it is reasonable to predict that good investments will continue to attract funding as required.
• Opportunities for joint venture partnerships between Australian and Canadian venture capital companies is a strong option in order to combine R&D expertise of companies in both countries as an alternate entry into both markets.

Key Events

BIO 2002 Toronto, Ontario
June 9-14, 2002
Major participation by Australia will see visitation by over 500 delegates.
Contact: Geoff Fox, Business Development Manager
Bio Industries Division, Canadian Consulate General, Sydney
or
Lynne Thomson, Trade and Investment,
Korea and Oceania Division, DFAIT Ottawa

AusBiotech 2002 Melbourne, Victoria
August 18-22, 2002
The largest national biotechnology event in Australia.
Contact: Geoff Fox, Business Development Manager
Bio Industries Division, Canadian Consulate General, Sydney

Pacific Rim Conference Auckland, New Zealand
November 17-29, 2002
Contact: Geoff Fox, Business Development Manager
Bio Industries Division, Canadian Consulate General, Sydney
or
Pierre-Andre Cusson, Senior Trade Commissioner
Canadian Government Trade Office, Auckland, New Zealand
Tel.: (64-9) 309-3690
Fax: (64-9) 307-3111
E-mail: pierre-andre.cusson@dfait-maeci.gc.ca
or
Paul Stinson, Executive Director
BC Biotech Alliance, Vancouver, British Columbia
Tel.: (604) 221-3026
Fax: (604) 221-3027
E-mail: pstinson@bcbiotech.ca

Key Contacts

Canadian Government Contacts

Canadian Consulate General
Level 5, Quay West
111 Harrington St.
Sydney, NSW, 2000 Australia
Tel.: (61-2) 9364-3000
Fax: (61-2) 9364-3097
Contact: Geoff Fox, Commercial Officer
E-mail: geoff.fox@dfait-maeci.gc.ca

Agriculture and Agri-Food Canada
Market and Industry Services Branch
Sir John Carling Building
930 Carling Avenue
Ottawa, ON K1A 0C5
Tel.: (613) 759-7744
Fax: (613) 759-7499
Contact: Jo-Anne Stewart
E-mail: stewartja@agr.gc.ca
Internet: http://www.agr.ca

Canadian Food Inspection Agency
Office of Biotechnology
59 Camelot Dr.
Nepean, ON K1A 0Y9
Tel.: (613) 225-2342
Fax: (613) 228-6653
E-mail: cfiamaster@agr.gc.ca
Internet: http://www.cfia-acia.agr.ca

Health Canada
International Affairs Directorate
Brooke Claxton Building, Room 814A
Postal Locator 0908A
Tunney's Pasture
Ottawa, ON K1A 0K9
Tel.: (613) 941-3136
Fax: (613) 952-7417
Internet: http://www.hc-sc.gc.ca

Department of Foreign Affairs and International Trade (DFAIT)
125 Sussex Dr.
Ottawa, ON K1A 0G2
Internet: http://www.dfait-maeci.gc.ca
Korea and Oceania Division (PKE)
Tel.: (613) 995-8744
Fax: (613) 996-1248
Contact: Lynne Thomson, Trade Commissioner
E-mail: lynne.thomson@dfait-maeci.gc.ca
Market Research Centre (TCM)
Tel.: (613) 996-3535
Fax: (613) 943-1103
Contact: Michelle Van Dyk, International Market
Research Officer
E-mail: michelle.van-dyk@dfati-maeci.gc.ca
Market Support Division (TCM)
Tel.: (613) 996-1431
Fax: (613) 943-8820
Contact: Patricia Filteau, Trade Commissioner
E-mail: patricia.filteau@dfait-maeci.gc.ca
Internet: http://www.dfait-maeci.gc.ca

Industry Canada
Life Sciences Branch
1505 Barrington St., 16th Floor
PO Box 940 Station M
Halifax, NS B3J 2V9
Tel.: (902) 426-9958
Fax: (902) 426-6094
Contact: Mark Craig, Sector Officer
E-mail: craig.mark@ic.gc.ca
Internet: http://strategis.ic.gc.ca

Australian Government, Regulatory Departments and Agencies

Australia New Zealand Food Authority
PO Box 7186
Canberra Mail Centre, ACT 2610, Australia
Tel.: (61-2) 271-2222
Fax: (61-2) 271-2278
Contact: Simon Brooke-Taylor
E-mail: s.brooke-taylor@anzfa.gov.au
Internet: http://www.anzfa.gov.au

Biotechnology Australia
GPO Box 9839
Canberra, ACT 2601, Australia
Tel.: (61-2) 6213-6000
Fax: (61-2) 6213-6952
E-mail: ba@isr.gov.au
Internet: http://www.biotechnology.gov.au

Commonwealth Scientific and Industrial Research Organization
Head Office and Government Business and
International Scientific Liaison
PO Box 225
Dickson, ACT 2602, Australia
Tel.: (61-2) 6276-6467
Fax: (61-2) 6276-6292
E-mail: mlo@its.csiro.au
Internet: http://www.csiro.au

Department of Health and Aged Care
GPO Box 9848
Canberra City, ACT 2601, Australia
Tel.: (61-2) 6289-1555
Fax: (61-2) 6281 6946
Internet: http://www.health.gov.au

Foreign Investment Review Board (FIRB)
c/o The Treasury Building
Parkes Place, Parkes
Canberra, ACT 2600, Australia
Tel.: (61-6) 263-3755
Fax: (61-6) 273-2614
Internet: http://www.treasury.gov.au/
FIRB/DEFAULT.asp

National Health and Medical Research Council
PO Box 9848
Canberra, ACT 2600, Australia
Tel.: (61-2) 289-7019
Fax: (61-2) 289-3111
Internet: http://www.health.gov.au/nhmre

Office of the Gene Technology Regulator
Department of Health and Aged Care
MDP54 PO Box 100
Woden, ACT 2606, Australia
Tel.: 1-800-181-030
Fax: (61-2) 6271-4202
E-mail: ogtr@health.gov.au
Internet: http://www.ogtr.gov.au

Therapeutic Goods Administration
PO Box 100
Woden, ACT 2606, Australia
Tel.: (61-2) 6232-8444
Fax: (61-2) 6232-8241
Internet: http://www.health.gov.au/tga

Australian Biotechnology Associations
AusBiotech Ltd
576 Swan St.
Richmond, Victoria 3121, Australia
Tel.: (61-3) 9208-4200
Fax: (61-3) 9208-4201
E-mail: admin@ausbiotech.org
Internet: http://www.aba.asn.au

Australian Society for Biochemistry and Molecular Biology
PO Box 2331
Kent Town, SA 5071, Australia
Tel.: (61-8) 8362-0009
Fax: (61-8) 8362-0038
E-mail: asbmb@camtech.net.au
Internet: http://www.asbmb.org.au

Australian Pharmaceutical Manufacturers Association
88 Walker St., Level 2
North Sydney, NSW 2060, Australia
Tel.: (61-2) 9922-2699
Fax: (61-2) 9959-4860
E-mail: info@apma.com.au
Internet: http://www.apma.com.au

Australian Society for Medical Research
145 Macquarie St.
Sydney, NSW 2000, Australia
Tel.: (61-2) 9256-5450
Fax: (61-2) 9252-0294
E-mail: asmr@world.net
Internet: http://www.asmr.org.au

Australian Venture Capital Association Ltd.
Level 5, 88 Phillip St.
Sydney, NSW 2000, Australia
Tel.: (61-2) 9251-3888
Fax: (61-2) 9251-3808
Internet: http://www.avcal.com.au

Medical Industry Association of Australia (MIAA)
PO Box 497
Roseville, NSW 2069, Australia
Tel.: (61-2) 9415-1151
Fax: (61-2) 9415-2130
Internet: http://www.miaa.org.au

Pharmaceutical Society of Australia
Pharmacy House
44 Thesiger Court
Deakin, ACT 2600, Australia
Tel.: (61-2) 6281-1366
Fax: (61-2) 6285-2869
E-mail: psa.nat@psa.org.au
Internet: http://www.psa.org.au

Ag-West Biotech
101 - 111 Research Drive
Saskatoon, SK S7N 3R2
Tel.: (306) 975-1939
Fax: (306) 975-1966
E-mail: agwest@agwest.sk.ca
Internet: http://www.agwest.sk.ca

Canadian Biotechnology Associations

Canada's Research-Based Pharmaceutical Companies
302-1111 Prince of Wales Dr.
Ottawa, ON K2C 3T2
Tel.: (613) 727-1380
Fax: (613) 727-1407
Internet: http://www.canadapharma.org

Alberta Biotechnology Association
1150, 10180 - 101 St.
Edmonton, AB T5J 3S4
Tel.: (780) 425-3815
Fax: (780) 423-3893
Contact: Myka Osinchuk, Executive Director
E-mail: myka@bioalberta.com
Internet: http://www.bioalberta.com

BioAtlantech
PO Box 636, Station A
Fredericton, NB E3B 5A6
Tel.: (506) 444-2444
Fax: (506) 444-5662
Contact: John Argall, Executive Director
E-mail: jargall@fundy.net
Internet: http://www.bioatlantech.nb.ca

BioEast
2nd Floor, Spencer Hall
220 Prince Philip Dr.
St. John's, NF A1B 3X5
Tel.: (709) 737-2682
Fax: (709) 737-4029
Contact: Margaret Miller, Managing Director
Internet: http://www.bioeast.ca

BIONova
c/o Innovacorp
101 Research Dr.
PO Box 790
Dartmouth, NS B2Y 3Z7
Tel.: (902) 424-8670
Fax: (902) 424-4679
Contact: Bill Mills, Executive Director
E-mail: bmills@innovacorp.ns.ca

Bio Quebec
6100 Avenue Royalmount
Montreal, QC H4P 2R2
Tel.: (514) 733-8411
Fax: (514) 733-8272
E-mail: info@bioquebec.com
Internet: http://www.bioquebec.com

BIOTECanada
130 Albert St., Suite 420
Ottawa, ON K1P 5G2
Tel.: (613) 230-5585
Fax: (613) 563-8850
E-mail: info@biotech.ca
Internet: http://www.biotech.ca

British Columbia Biotechnology Alliance
3250 East Mall, Suite 225
Vancouver, BC V6T 1W5
Tel.: (604) 221-3020
Fax: (604) 221-3027
Contact: Paul Stinson, Executive Director
Internet: http://www.bcbiotech.ca

Canadian Drug Manufacturers Association
4120 Young St., Suite 606
North York, ON M2P 2B8
Tel.: (416) 223-2333
Fax: (416) 223-2425
Internet: http://www.cdma-acfpp.org

References

Canberra Times. "Little Fanfare As Australia Sets 'Benchmark' On GM Regulation," June 2001.

Commonwealth Biotechnology Ministerial Council. "Australian Biotechnology: A National Strategy," July 2000. Available in PDF format on-line at http://www.biotechnology.gov.au.

Darby, Andrew. "Tasmania Wants to be GM-free Apple of World's Eye," Sydney Morning Herald, July 2001.

Ernst and Young, and Freehills. "Australian Biotechnology Report," 2001. Available on-line at http://www.biotechnology.gov.au/
industry_research/reports/reports.asp.

Food Institute Report. "A Survey Has Found that Australians are Becoming More Accepting of Certain Kinds of GM Foods," July 2001.

M2 Presswire. "Victoria to Establish Australia's First Synchrotron," June 2001.

Marketletter. "Australia: Pharma Industry Contribution," July 2001.

Reuters English New Service. "Australia Probes Costs, Risks of Growing GM Crops," July 2001.

¹ All monetary amounts are expressed in Canadian dollars, unless otherwise indicated. The conversion rate to Canadian dollars is based on IDD Information Services, Tradeline, July 2001.