Investment summit supports Australian biotech industry to attract investment and grow

Transcription

1 Investment summit supports Australian biotech industry to attract investment and grow During 2014, more than $500 million in investment was raised for Australian biotech. A Scientific American survey of the international biotechnology industry ranked Australia fourth among industrialised nations for biotechnology innovation. Australia Biotech Invest 2014, held 3-4 December in Melbourne, celebrated the innovation and positive momentum happening in the Australian life sciences sector and set the stage for further growth in investment and partnering opportunities. Two days of intensive discussion at the Crown Conference Centre reflected the strong interest in the biotech sector among investors and the general public. The industry has become more mature and sophisticated in the past half-decade, with a better understanding of capital markets and of what today s investors want. The continuing achievements of the biotech sector are vital to patients, investors and to the Australian economy. Australia s biotechnology industry is growing steadily and its trajectory, despite the global financial crisis (GFC), has become one of the standout performers in the national economy. For a long time, the GFC chilled speculative investment as people looked for safe options. However, investors now recognise the need to diversify their portfolios, and see investment in the life sciences as a key component because the sector s fundamentals have been so consistently robust. Recognising the importance of connecting companies to sources of investment, AusBiotech has been hosting investment meetings for several years. Alongside presenting investment events, AusBiotech also advocates strongly to influence tax and government policies to help life sciences companies get access to development funds in Australia and globally. Investment meetings held during 2014 included Australia Biotech Invest in Melbourne, Asia Biotech Invest in Hong Kong, the Australian Life Science Investment Showcase in San Francisco, USA, and the Broker Meets Biotech series of events held in Perth, Brisbane and Adelaide. Australia Biotech Invest was Australia s largest life science investor meeting for The event was co-organised by AusBiotech and Hong Kong-based Beacon, with the Victorian Government Department of State Development, Business and Innovation as Host State Sponsor. It attracted around 30 presenting companies and 310 investors, including many international delegates. Australia Biotech Invest 2014 featured company presentations, investor panels, industry keynotes and expert presentations on topics such as global biotech investment trends and opportunities, challenges, international partnering and licensing, intellectual property and building win-win partnerships in China.

2 AusBiotech s BioInvest Partnering system facilitated one-on-one meetings between attendees at the event and the Biotech Showcase booklet provided an overview of the presenting companies and the types of collaborations sought. International delegates at Australia Biotech Invest 2014 included: China Renaissance Partners, China BlueSky Partners, Zhejiang Beta Pharma Inc, WuXi AppTec Shanghai Co Ltd from China; Hong Kong Polytechnic University; A.Menarini Asia Pacific Pte Ltd, Biotech Gate, Lonza Biologics from Singapore; the Department of State Business & Innovation from Indonesia; Aptuit Verona Srl, Torreya Partners, Borson Law Group PC, Platinum Road, Fountain Medical Development Ltd, Sanofi Pasteur, Blueprint Life Science Group from the US; CVC Ltd from Afganistan; Aptuit Verona Srl, Menarini Ricerche from Italy; Roche from Switzerland; UK Trade & Investment and GlaxoSmithkline from the UK; and BioPacific Partners from New Zealand. Big pharma representatives such as CSL Limited, AstraZeneca, Bristol-Myers Squibb, Pfizer and Sanofi also attended. Spotlight presentations by biotech companies provided an insight into the innovation driving the biotech industry, the diversity of the sector and the passion of its people as they strive for health solutions that will also benefit the Australian economy. Investors and other stakeholders heard presentations on the therapies, diagnostics and medical devices in the pipeline. In sessions led by analysts, brokers and investors including venture capitalists, private equity firms, investment bankers, as well as governments, the following issues and trends were discussed. Factors currently influencing investment in the Australian biotech sector Global investment trends: What areas are exciting investors? Key investment trends identified at Australia Biotech Invest 2014 included: Immunotherapy; Orphan diseases; e-health, especially apps; Oncology; and Animal health. Areas such as infectious diseases, chronic pain, diabetes, heart disease, diseases of the central nervous system, respiratory disease and regenerative medicine were also highlighted. Appetite for risk higher in the US and in WA, Australia US investors have a greater appetite for risk and a larger pool of capital, which is one of the reasons valuations of US companies are larger than in Australia. Most speakers thought the US biotech bubble was sustainable. The entrepreneurial spirit in Western Australia and the experience gained via the mining industry have contributed to there being speculative investors in WA who have considerable appetite for risk, as they search for high returns. Increased interest in drugs for orphan diseases It was noted that the huge China population means that orphan drugs, for diseases or disorders that are rare, have the potential to reach many people there. In Europe, 60% of biotech public company

3 listings were involved in drugs for orphan diseases. The biotech industry s interest in orphan diseases and their treatment is a worldwide trend. The movement of capital from the mining sector: Is this flowing into biotech? The downturn in capital investment in the mining sector offers potential for increased investment in biotech. There is a natural synergy between mining and biotech, both attract risk capital. It was noted that biotech investment can grow even if the resources sector also returns to growth. In investment terms it would be helpful to biotech should the resources sector remain stagnant, as the current flow of capital is welcome. Brian Leedman, Chair of the AusBiotech WA Branch Committee reported that AusBiotech s Broker Meets Biotech events, held in WA since 2011, have helped brokers to improve their knowledge of the biotech industry and consider investing in biotech. It is important to educate younger brokers and those predisposed to high-risk investment and more open to trying investments other than mining, said Mr Leedman. There has been a surge of biotech investment activity in WA in the last months and the sector would benefit from good news in the coming months to maintain the investor interest. It was noted that some of the Chinese investment coming into Australia is moving from the resources sector to biotech, in WA particularly. Company presentations to investors Speakers noted that the Australian biotech sector could improve how it presents the investor opportunity to sophisticated investors. Brian Leedman, Chair of the AusBiotech WA Branch Committee and initiator of the Broker Meets Biotech series, said that when presenting to investors, companies should not be too scientific or give just a medically-focused presentation. Companies need to show their point of differentiation to the competition, the commercial potential and how long this will take to reach. Anton Uvarov, Healthcare Analyst, Forrest Captial, added, Make sure there is solid science, with data in humans. The sector will benefit from continuing to educating investors about what to look for in companies. The need for preparation in the biotech space US investors noted that when assessing a company for investment, they prefer a mature company that is not too early-stage. Be well-advised in what you re doing and partner with the assistance of experts, said Matt McNamara, Chief Executive Officer, BioScience Managers, in his opening remarks on day two. Doors are opening up and biotech companies now have more of an audience. Tell the broker a story, simply and slowly, enable them to get comfortable with you. Deliver on your company s promises, said Richard Hopkins, Chief Executive Officer, Phylogica.

4 It was noted that AusBiotech has produced two resources to support biotechnology boards: The Code of Best Practice for Reporting Life Sciences Companies (the Code) and the Guide for Life Science Company Directors (the Guide). Equally the resources are excellent information sources for investors, who may favour companies using them for guidance. Impact of harmonisation and the growth of China IP protection in China is now quite mainstream, with China moving very quickly to have its IP arrangements consistent and integrated with the rest of world. China is harmonising patent law and Australian companies can have increasing confidence filing a patent in China. From 1995 to now, things have changed dramatically. With China increasingly researching and developing their own IP, they understand that having protection worldwide is very important. It enables Chinese companies to be protected elsewhere, as well as foreign companies to be protected in China, thereby attracting technologies. When making connections in China, companies need to get through to the decision-makers and find out what they re seeking. Building relationship and trust is essential. Having an expert mediator to educate both sides about IP helps. Be aware that a signed document by both parties doesn t guarantee results and culturally different business practices exist. In China there is major unmet medical need in the areas of lung and gastrointestinal cancers, hospital healthcare delivery (hospital governance, physicians, allied health) and pharmaceuticals. Competition is fierce to get the right kind of technologies to market. Cardiovascular and orthopaedic areas need collaborations, and international collaborative grants (open to companies outside of China) are available in China. There are 55,000 new hospitals scheduled to be built in China. Access, the ageing population and the changing lifestyle and diet are impacting health in China. Be aware of the priority areas in the current China five-year plan and have an understanding of the quality of science that now exists in China. Future opportunities for Australian biotech Australia Biotech Invest 2014 further lifted the profile of the Australian biotechnology industry and created access to greater funding sources for local companies to develop world-class science into therapies, diagnostics and medical devices. The sector has a highly-skilled, passionate and innovative workforce, whose innovation this annual event helps support. To coincide with Australia Biotech Invest, a 2014 edition of Ahead of the Curve, Future Proof: The investment case for biotech, was produced to highlight the compelling investment thesis of the biotechnology and life sciences sector. In this special edition available at (download on the Invest in Biotech page), 15 companies that exemplify the diversity and innovation of Australia s biomedical sciences industry were profiled: Universal Biosensors (UBI), dorsavi, Benitec, Patrys, Elastagen, Analytic, Virax, CSL, Orthocell, Novogen, Cytomatri, Gordagen Pharmaceutical, Biovite Australia, Bionic Vision Australia and IQx Investments. In 2015, Asia Biotech Invest will be held May in Hong Kong, and Australia Biotech Invest will return to Melbourne on 6-7 October. The Broker Meets Biotech series will also return, with events in Perth, Adelaide, Brisbane, and for the first time Sydney.

5 In 2015 AusBiotech will also co-host Biotech Invest Korea and the related Invest fair, with the Korea Health Department Institute (KHIDI). These events will be held as part of the BIOKorea International Convention in April Along with these exciting advances, AusBiotech will be working with AusTrade to manage the Australian delegation to BIO 2015 in Philadelphia, USA, and to the China International Medical Equipment Fair (CMEF) 2015 in Shanghai. The prominent Australia Pavilion at these events will highlight Australian biotechnology to a global audience of potential partners and investors. The biotech industry is vitally important to Australia s economic development and to the wellness of our people and to other patients around the world. Already rated fourth in the world for innovation, the impact and profile of the life sciences sector will continue to grow with support from support from investors, government and AusBiotech. To learn more about Biotech Invest events visit