Last week's National Innovation and Science
Statement committed over $1 billion to improve Australia's
It included a commitment from the Federal Government to
establish a Biomedical Translation Fund in 2016. A new $250 million
body will independently invest in promising biomedical discoveries
and assist their commercialisation in the global market place.
The Fund is based on a recommendation of the 2013
McKeon Review. It will be managed by an external manager and is
designed to be self-sustaining in the long term.
NAVIGATING THE "VALLEY OF DEATH"
The McKeon Review identified a gap in support for research from
the endpoint of the ARC Linkage Projects scheme (or the NHMRC
Matching Development Grants program) through to the early clinical
stages of biomedical research.
This period of development, known in industry as the
"valley of death", will be better managed by the Fund
through average investments of $10 million per project or portfolio
It is common for many potentially valuable projects to fail at
these early stages when the necessary funding is not obtained.
These "invisible ideas" are not developed and the health
and economic benefits are never realised.
Although the details have not been released, the Fund is
intended to encourage private sector investment during these early
stages of commercialisation. The ultimate aim is to accelerate the
commercialisation of Australia's cutting edge medical research,
retain the intellectual property in Australia, and stop the flow of
talented Australian researchers(and their research) going overseas
to find funding.
MEDICAL TECHNOLOGIES AND PHARMACEUTICALS GROWTH CENTRE
It has also been
suggested that the Fund will contribute to the
newly-established Medical Technologies and Pharmaceuticals Growth
The Centre is expected to establish a national presence through
additional "nodes" located within key universities across
Australia. It will play an important role in connecting the
country's best researchers with businesses working on the
development of medical technologies and pharmaceuticals.
In the long run, the Centre will try to pull research through to
market development by improving coordination between industry,
public and private research organisations as well as state and
federal government initiatives.
The Centre will also accelerate industry initiatives which have
a strong impact on supporting SMEs.
The McKeon Review proposed that the Federal Government would
provide half of the contributions for the Fund with the other half
contributed by institutional investors on terms designed to
recognise the high risks involved in early-stage investing.
The Federal Government has instead elected to reserve the $250
million from the landmark Medical Research Future Fund (MRFF) which
is expected to reach $20 billion by 2019-20.
The Fund will receive its funding by reducing the capital
contributions to the MRFF by $125 million in 2015-16 and 2016-17.
The MRFF will still be fully capitalised in 2019-20 meaning that
investment will be available for medical innovation almost
immediately rather than waiting for the MRFF to be fully
The Federal Government intends the Fund to operate alongside the
MRFF to expedite investments in biomedical innovations to promote
the progress of commercialisation.
Industry associations, such as the Association of Australian
Medical Research Institutes, have
responded positively to the Fund's announcement.
The value of Australian publicly listed life-sciences companies
was $31.4 billion in 2012. With over 2000 companies,
Australia's health and biomedical hub is the largest in the
With a small number of significant commercialisation success
stories (including CSL Limited, Resmed and Cochlear), the
Biomedical Translation Fund has the potential to improve
Australia's track record. The Fund has also been welcomed by
CSL which, the Australian Financial Review
reports, is trying to understand how it can participate in the
We will provide further analysis once more details are released
on the Fund's implementation and operation and eligibility
criteria for funding.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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