Biotechs to government: stop mucking with R&D
Over 80% of biotech leaders are concerned about a current review of R&D policy, and are suspicious of the government’s position on the issue.
Australian biotech body AusBiotech released its industry position survey yesterday, which canvassed the thoughts of 44 companies in the sector along with another 60 companies through roundtable discussions.
It found that of 80% of respondents said they were “concerned” about a current review of R&D arrangements being led by Australia’s chair of innovation Bill Ferris, chief scientist Alan Finkel, and secretary to the Treasury John Fraser.
While 80% of respondents were worried about the changes, over 90% said stability on the issue was crucial as capital remains uncomfortably tight for companies in the sector.
“The constant reviews, threats and tweaks to industry support programs are unsettling biotechnology developers, who have long development cycles – and undermine business confidence,” AusBiotech said in its findings.
“The negative impact that uncertainty has on product development/innovation companies is destabilising and program changes cause one of the greatest costs, in practical terms.”
One CEO surveyed even went as far as to say they were “genuinely fearful” over the government’s intentions in the space.
While the R&D review is ongoing, the government has already imposed an expenditure claim threshold of $100 million on R&D funding – but it has also attempted to cut claims by 1.5%, something which it has not yet been successful in doing.
In particular, the companies surveyed said one suggestion that R&D could be linked with greater collaboration with the academic sector.
Biotech leaders suggested that any sort of formal linking could create “phantom partnerships”.
“...if industry is incentivised to work with a public sector partner and is motivated primarily by the incentive, phantom partnerships will eventuate,” AusBiotech wrote in its findings.
“It will also make the R&D Tax Incentive more complex and increase compliance costs.”
Despite ongoing uncertainty about R&D though, the sector cautiously welcomed a greater focus on innovation from the government – and also reported that the R&D spend of 41 respondents was a aggregated $2.5 billion in 2015.
This is up from $889 million from 46 companies in the previous year.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.