About Biotechnology - Industry Overview
“Biology is likely to become the greatest single driver of the global economy...The life code is a lever and perhaps the most powerful instrument human beings have ever used. It will make the Industrial Revolution seem simple, even quaint. It will become the world’s dominant language, and all of us will have to be literate to thrive.”
– Juan Enriquez
Respected commentators and intellectuals agree that biotechnological innovation is the foundation-stone of our future, and a ‘game changer’. It is anticipated that it will underpin our economy and provide solutions to intractable problems of human and animal diseases, climate change, fuel alternatives, food security – as well as improving our quality of life.
Juan Enriquez also coined the term ‘bio-economy’ which is closely linked the biotechnology industry. The term was first defined by Enriquez and Rodrigo Martine, Life Sciences Chief Strategist at IDEO. Enriquez was the founding director of the Harvard Business School Life Sciences Project, and was a member of Craig Venter's marine-based team to collect genetic data from the world's oceans, which he later used to map the human genome.
The OECD describes the bio-economy, from a broad economic perspective, as “the set of economic activities relating to the invention, development, production and use of biological products and processes. If it continues on course, the bio-economy could make major socioeconomic contributions... These benefits are expected to improve health outcomes, boost the productivity of agriculture and industrial processes, and enhance environmental sustainability.”
For our part, Australia is well on its way to achieving this vision of a successful bio-economy. The latest Scientific American, Worldview Scorecard 2013 ranked Australia number seven in biotechnology in the world up from number ten in last year. We ranked best in the world for the “Best growth in public markets” and second globally for “Greatest public company revenues” and the “Most public companies”. Australia’s 88 ASX-listed biotechnology companies are valued at more that $51 billion (BioForum, April 2014) – a great contribution to the bio-economy.
Despite the challenges of the global economy and the degree of difficulty in building a biotechnology and life sciences sector from scratch, Australia is doing very well by any comparative measure, with an impressive return on investment from a maturing stock of quality companies. Australian biotechnology boasts a raft of success stories and a world-class industry.
Since its emergence in the early to mid-nineties, the biotechnology industry in Australia has achieved a great deal. The year 2014 dawned with news that biotechnology has become a ‘20-year overnight success’ with The Age and Sydney Morning Herald (4 Jan 14) reporting that “biotech has finally boomed”. The article reported the array of successes of 2013, which included IPOs, four to nine-fold surges in share prices for a number of companies, high profile investors turning their attention to biotech and a steady flow of capital raisings that totalled $739.1 million (Biotech Daily, 2 Jan 14), the highest amount since 2007.
Biotech Daily reported that its ‘Top 40’ Index of listed biotechnology companies ended 2013 up 18.1% for 2013, compared to the benchmark S&P ASX 200 15.1% up for the year and the majors (Cochlear, CSL and ResMed) up 17.9%.
News from Western Australia (The Australian, 23 Dec 13) details a shift in financier’s choices from mining to biotech companies, including Andrew Forrest taking a million-dollar stake in Admedus.
The PricewaterhouseCoopers (PwC) ten year report was released in October 2012, showing the PwC Australian Life Sciences Index had consistently outperformed the NASDAQ Composite Index and the All Ordinaries since mid-2006. Excluding the three majors (CSL, ResMed and Cochlear) from the Life Sciences Index, in 2008 the Index parted ways with the All Ordinaries and dramatically outperformed it in the reporting period, almost quadrupling its performance. In four years (2008 – 212) the often-cited All Ordinaries Index had failed to come anywhere close to biotechnology’s performance. The NASDAQ Biotech Index, perhaps the best comparative measure of US biotechs, hit a 12-year high in July 2012, but nevertheless still trailed behind the Australian Life Sciences Index.
Australia’s comparative advantage comes from its world-class science and medical research, its capacity for international partnerships, cost effectiveness, and a transparent and effective regulatory system. Jobs of the future will be found in the biotech and pharmaceuticals sector, and the medical technology sector. In addition, there are many thousands of direct jobs in the agricultural and industrial biotechnology sectors and indirect jobs in dependent areas such as clinical trial teams, high-tech manufacturing, medical research and supplies to the medical technology sector and in services such as those provided by patent attorneys. Innovative industries provide high-skilled jobs with long-term prospects.
• CSL is Australia’s largest biotechnology company.
• The emerging trends of foodtech and cleantech have gained momentum, and the medtech sector is surging forward, to follow in the footsteps of medtech industry pioneers, Cochlear and ResMed.
• Australia is home to numerous world class medical research organisations, including the Garvan Institute, Institute for Molecular BioScience, Menzies Research Institute, John Curtin School of Medical Research, Walter and Eliza Hall Institute of Medical Research (WEHI), Australian Institute of Bioengineering and nanotechnology, Brain Insititute, Diamentina Institute, The Lowy Research Centre, Victor Chang Cardiac Research Institute, Baker Medical Research Institute, The Burnett Centre and South Australian Research & Development Institute.
• Most states of Australia’s mainland are now able to commercially cultivate 3 types of GM crops that have been approved by the GM regulator.
• Australian state governments are developing and implementing independent regional initiatives. Each has strong medical research programs, some having specialist expertise in areas including tropical medicine, bio-discovery, regenerative medicine, bioremediation, agricultural/industrial biotech and medical devices.