PERTH, Australia – The Australian government is making good on its promise to invest in innovation with Prime Minister Malcolm Turnbull announcing nearly A$1 billion (US$744.6 million) in new grants and funds to build stronger national networks in translational science.
Launched last year, the National Innovation and Science Agenda identified barriers to innovation and provided measures for early stage investors and new arrangements for venture capital partnerships.
Those measures included numerous incubator programs and new funding mechanisms.
A new A$200 million CSIRO Innovation Fund will support commercialization of Australian research through co-investment in new startup companies, as well as products created by Australian research institutions.
The joint public-private fund will help Australia's homegrown innovations morph into successful businesses to ultimately create jobs and boost Australia's productivity and exports.
The CSIRO Innovation Fund will be led by VC expert Bill Bartee, co-founder and partner at Blackbird Ventures and an Investment Committee Member of NAB Ventures. Bartee co-founded Southern Cross Venture Partners after helping to build early stage investing at Macquarie Bank.
$A483 MILLION IN NEW RESEARCH GRANTS
More than A$483 million in funding will support more than 600 grants across four National Health and Medical Research Council (NHMRC) funding schemes.
More than 1,900 researchers will share in the funding for a wide range of research projects, including 60 fellowships for future research leaders, laboratory studies of the origins of disease and clinical trials of new therapies.
By disease area, cancer research garnered the largest share of funding at A$123.4 million, followed by cardiovascular disease at A$64.8 million, and mental health coming in third at $35.5 million.
Additional government grants include A$26.2 million toward career development fellowships.
The country made a number of changes to its tax laws this year to incentivize investment in startup companies, and it also is investing via public-private co-investment funds.
To that end, a $500 million Biomedical Translation Fund, announced earlier this year, will provide capital to Australian companies that are ready to turn their research into world-leading products.
The new translation fund is designed as a for-profit co-investment pool of venture capital targeting companies with projects that are through proof of concept or entering phase I/II trials. The fund will provide $250 million matching government funds to private investor funds and will go toward drugs, med-tech or new digital tech services for health delivery or diagnostics. (See BioWorld Today, Oct. 25, 2016.)
R&D TAX INCENTIVE OVERLOOKED?
Ausbiotech's Glenn Cross told BioWorld Asia that the association is pleased to see the recent government initiatives to foster innovation. However, he said that recent cuts to the R&D tax incentive fly in the face of that forward-thinking momentum.
One of the challenges is that, while the Turnbull government is significantly focused on innovation and promoting commercialization, it has cut the value of the popular R&D tax incentive program and is considering further changes that are generating significant concern across the biopharma sectors (See BioWorld Today, Oct. 3, 2016.)
One of the proposed changes is the introduction of a A$2 million cap on cash claims under the program.
According to Ausbiotech, the proposed cap would seriously damage investment in small to medium enterprises (SMEs), particularly local clinical trials activity.
Government remains a stumbling block in that it "seems to see the R&D tax incentive program as some sort of corporate entitlement program, when in reality, it keeps clinical trials in Australia," Cross said.
He praised Health Minister Susan Ley and Innovation Minister Greg Hunt, saying, "They get it," but the leadership of the National Innovation and Science Agenda doesn't understand the needs of SME enterprises in the biomedical research arena.
Roughly 74 percent of companies engaged in R&D are SMEs and would be adversely affected by the 2 percent cap, said Kate Mahady, director of FB Rice R&D Tax Consulting during a recent Ausbiotech briefing in Perth.
"[Innovation Australia Chairman Bill] Ferris said it would only affect 1 percent to 2 percent [of SMEs] but actually it would affect 40 percent to 50 percent of companies," she said, adding that the move "affects long-term planning and innovation and is destabilizing."
Even so, Cross said the association is very encouraged by a number of recent moves such as the Biomedical Translation Fund, MTP Connect funding and the incubator initiatives that have cropped up.
INCUBATORS ON THE RISE
"We're placing an emphasis on collaboration, to increase the level of engagement between businesses, universities and the research sector to commercialize ideas and solve problems," Minister Hunt said.
As part of that effort, a A$23 million Incubator Support Program was launched in September to grow the next generation of innovative Australian companies. The agency also said it plans on introducing new funding arrangements for universities beginning in January 2017 to improve collaboration with industry.
The momentum is catching on, and incubators are cropping up all over the country.
In Western Australia, the Centre for Entrepreneurial Research and Innovation (CERI) was launched to support a national consortium for translational research and training.
CERI was one of 14 grants awarded by the Medical Technologies and Pharmaceuticals Industry Growth Centre (MTP Connect) to help Australian companies compete on an international level. (See BioWorld Today, Oct. 28, 2016.)
Kevin Pfleger, head of Molecular Endocrinology and Pharmacology at the Harry Perkins Institute of Medical Research in Perth, stressed the need for researchers to "pass the baton on to other researchers."
"Discoveries often get left behind on the shelf, so we need to talk to colleagues who can take it on to the next step," he said during a recent Ausbiotech briefing at the CERI institute in Perth.
Pfleger, also chief scientific advisor of Melbourne-based Dimerix Bioscience Ltd. (a spinout from the Perkins Institute and the University of Western Australia), said translating deep tech research requires new skills and knowledge, and the CERI consortium aims to bring together people with different skill sets to help researchers become entrepreneurs.
The consortium already has an initial A$2.5 million cash commitment from public universities, medical research institutes, and biopharma and med-tech companies across Australia.
The larger goal is to break away from Western Australia's reliance on the mining and resource sector to develop the state as a national, or even international, hub of innovation and entrepreneurship.