BioWorld International Correspondent
SYDNEY, Australia - Melbourne-based Amrad Ltd. has emerged as a major winner from a change in government policy for supporting research and development by gaining a A$24.6 million (US$15.2 million) grant.
The Australian government announced on Friday that Amrad will be given the money over a five-year period, and the news pushed the company's share price up A$0.12 to A$1.52.
Also, earlier last week, Amrad received a query from the Australian Stock Exchange when its stock price jumped A$0.20 to A$1.40.
In response to the routine query about whether it knew of any undisclosed reason why its share price had increased, the company replied it had no additional information.
Amrad's latest share price is still well down from its 1998 high of A$2.18, and one company source commented that the stock's price increase may be due to the recent completion of a large sell order by one investor.
During the week, the company also announced an agreement with the small Australian company Ambri Pty. Ltd. to work jointly on ways to use Ambri's sensing technology in Amrad's active bioscreening operations.
The announcement on Friday pertained to a new government program called the Pharmaceutical Industry Investment Program (PIIP), which in turn is a replacement for another government program called the factor (f) scheme.
Both schemes are aimed at encouraging Australian research and development, but the amount of money handed out for factor (f) is linked to pharmaceutical sales. To get money under the PIIP scheme, companies must apply for it and, among other criteria, show how much they are spending on research and development.
Another crucial difference is that a lot less money will be handed out under PIIP - A$300 million over five years, compared to more than $1 billion handed out in the seven years of the factor (f) scheme.
Most of the companies that received factor (f) funding are local offshoots of pharmaceutical multinationals, with the grant being largely an inducement to maintain Australian research and development or manufacturing facilities.
Amrad managing director John Grace said his company had received all the funds it asked for from the PIIP scheme, and considerably more than the A$19 million it received over seven years under the old factor (f) scheme.
Amrad has a substantial portfolio of research projects, including an oral retrovirus vaccine that has just completed Phase IIa clinical trials and a A$10 million mass bioscreening project to look for new lead molecules to treat a range of conditions.
In addition, the company has pharmaceutical operations turning over A$13 million a year.
Two other listed Australian companies to gain grants under PIIP were FH Faulding & Co. and CSL Ltd., both of which are pharmaceutical companies with some biotechnology operations.
Faulding will receive A$40.4 million, about what it asked for, and has announced it will use the money to develop injectable and oral products. The announcement had little impact on the company's share price, which slipped A$0.15 to A$7.21 in a weaker overall market.
The government announced that CSL will receive A$60 million over five years, but the company later announced that the money is less than it would have received under factor (f). CSL's share price remained unchanged. n