Biotechs: no cure without government help in form of Medical Research Future Fund
AUSTRALIA may lack the funds to spawn successors to biomedical high-flyers like Cochlear, CSL and Gardasil.
AUSTRALIA may not see successors to biomedical high-flyers like Cochlear, CSL and Gardasil unless the Medical Research Future Fund delivers substantial resources, scientists have warned.
Bryce Vissel, a neuroscientist with the Garvan Institute in Sydney, said the proposed fund was a rare bright spot in a “very tough picture” for the biotech sector.
“The depth of the market is insufficient to evaluate value, and the funding is often below what is required. You’ve got companies trying to achieve serious milestones in a profoundly underfunded way,” he said.
A Parliamentary Library analysis this week showed that government research funding had slipped to 0.56 per cent of GDP, the lowest level since 1989-90. With pharmaceutical companies no longer investing in early stage medical research, Dr Vissel said scarce capital was shackling a medical research sector rich in ideas and ability.
“You’ve got this perennial problem of underfunding at the front end. It is extremely difficult for Australian biotech companies to taste success (even though) many have a strong scientific underpinning.” Dr Vissel said companies like CSL and Cochlear had “a wonderful product and a fantastic business model”.
But CSL began life as a commonwealth agency; federal funding helped bring the first commercial cochlear implant to market; and Ian Frazer, who developed the Gardasil cervical cancer vaccine, benefited heavily from Queensland government funding under the now abandoned Smart State scheme.
“They had enormous funding at a time when the government was putting money in,” Dr Vissel said. “They paid it all back and more through taxes. We really should have learnt from those successes and realised that we need the government to provide potent investment upfront.”
He said the proposed MRFF could prove crucial, but would take a while to get off the ground.
The government has indicated that it will proceed with the fund even if it cannot get the Medicare co-payment through the Senate. Scientists have welcomed the fund so long as it is allocated generously enough to facilitate large-scale research, and flexibly enough to support the full range of disciplines that contribute to medical research.
Monash University physiologist Michael Cowley, who had an obesity drug approved by the US Food and Drug Administration last month, said pharmaceutical companies had moved away from supporting early stage research over the past 15 years. “From a pharmaceutic company’s perspective, it’s about managing risk,” he said.
However, former Business Council of Australia president Graham Bradley, who has floated Australian biotech companies, said the weakening Australian dollar could help resuscitate research investment. “Four or five years ago, when our dollar was much weaker, Australia was quite an attractive place for international companies to do their medical research,” he said.
