The life sciences sector in Australia has always been a strong one – with state-of-the-art research facilities and capabilities, we’ve punched above our weight on the global stage. One positive to come from COVID has been the renewed focus on the sector by policy makers as an area of competitive advantage worth nurturing.
Top trends in Life Sciences
Issues impacting businesses in Life Sciences
Taking Australian life sciences to the world
The Australian Government has identified six priority sectors under the Modern Manufacturing Initiative (MMI) to support companies locally and export globally. Medical products are a particular beneficiary of the policy along with industry collaboration and incentives to support scale-up and commercialisation. The 10 year roadmap provides milestones to achieve at two-, five- and ten-year intervals, which we anticipate to be supported by targeted measures to not only encourage growth, but to keep our IP and manufacturing here in Australia.
Life sciences ready to list
Pre-COVID we were seeing a lot of life sciences companies getting ready to list. While you would think that the threat of a COVID-induced recession would dampen appetite, we very quickly saw a resurgence in life sciences companies wanting to IPO in the lead up to Christmas 2020. If anything, we’ve seen many companies accelerate their plans, and also look at options for listing both here and abroad.
We’ve supported a number of Australian life sciences companies to list or dual-list in other jurisdictions including the US, UK and India. We’ve also worked with a number of US life sciences companies that have listed here in Australia. The compliance involved with a dual or cross jurisdictional listing can be time consuming and the process can be costly, but it opens up new avenues for funding and market access.
Investment and funding remains competitive
Despite the very public race for a COVID vaccine, most medical products and pharmaceuticals are many years in development before hitting the market. While funding is available, it does remain competitive, as many investors are looking for a guaranteed return on a shorter-time frame. It’s one of the inhibitors of growth, but one that can be overcome through modelling and careful management.
R&D and innovation
Life science companies are no strangers to investment in R&D and innovation. The sector is about to have more incentive to innovate as the Government not only pours funds into medical products but also tests out Australia’s new Patent Box on the sector. The finer details have yet to be worked out, however, the Patent Box could be a tax effective tool to invest in additional R&D while also adding an extra layer of certainty to investors.
Employee Share Schemes can help protect your IP
The life sciences sector is increasingly embracing Employee Share Schemes as a way of attracting and retaining talent, but also to protect IP. However, not all employee share schemes are created equal and it’s important to match the kind of scheme you adopt with your business aspirations and the people outcomes you’re looking to achieve.
Global mobility hampers growth
The life sciences sector is highly specialised and skilled – and many of these skills are sourced from all over the world. With international borders closed for the better part of the year, we are at risk of other jurisdictions snapping up the skills that we can’t get into the country until 2022 at the earliest. So when an already competitive environment heats up, how can you innovate or change your approach to attract and retain the best global talent for your business?
There are untapped markets for Australian life sciences companies – some on our doorstep like the populous ASEAN area and others like the US and Europe that have room to maneuver. It’s not quite as simple as shipping your product or devices to another location. It’s important to be across new and emerging trade deals, tariffs and customs protocols to streamline your logistics and help capture new markets. In addition to programs like the Australian Trusted Trader program, we strongly suggest having an international growth strategy that also focuses on international trade compliance.
Collaboration with AusBiotech
We have been partnering with AusBiotech for years on their Industry Position survey, an important piece of research exploring industry performance and trends for the future. While COVID disrupted plans for 2020 research, the 2019 Industry Position report highlights endemic issues that could challenge the sector as they scramble to harness current momentum and interest.
We cut through the complexity of compliance
The life sciences sector is one of the most highly regulated in the world and also one of the most vulnerable to cyber crime, security issues and fraud. The systems and compliance in place can help to mitigate risk and identify vulnerabilities before they become problems. Whether it’s tax, audit or risk, we cut through the compliance and complexity.
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Looking to bring manufacturing onshore
Australia has a history of conducting the research here before the IP goes offshore to be manufactured elsewhere. The tide will slowly turn with Australian life sciences looking to bring manufacturing capabilities back to Australia – supported by the Translation, Integration and Collaboration steams of the MMI and various Federal and State grants to kick start the process. When it’s not feasible, companies are looking at new alternatives for production, including Singapore, India and Europe.Read more about the MMI and grants available
Listen to Michael Cunningham, National Head of Life Sciences, talk about trends and issues facing the sector right now.
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