Queensland Life Sciences Industry Report 2012 (PDF, 3.5MB)

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Queensland Life Sciences Industry Report 2012 44 Figure 11 shows the projections for revenue set in a 2005 strategic plan for the industry (Queensland Biotechnology Strategic Plan: 2005–2015). Overlaid onto this is the estimated income attributed to Queensland Biotechnology companies (i.e. excluding research organisations) from surveys in 2005, 2007, 2009 and 2011. This data reveals a CAGR of 12.7% over six years. The estimated income for Queensland Biotechnology companies in 2011, at $597 million, aligns with the 2010 projection of $600 million. 7.1.4 Income Growth in 2011 The average income reported in 2011 ($19.9 million; Table 34) was up by 45% compared with 2009 ($13.7 million) and the majority of companies (56.3%) and research organisations (63.0%) reported income growth in 2011 (Figure 12). 24.1% of companies and 29.6% of research organisations reported no change in income. A higher proportion of companies (19%) relative to research organisations (7.4%), reported a decline in income. For those that did report a fall in income, the average decline was about 23% (Table 38 and Figure 12). It should be noted that one fifth of companies that provided income data, did not respond to this question on income growth. Across all respondents (114), an average increase in income of 15.8% (median 4%) was reported for 2011. The average increase for companies was 14.9% (median 3%) and for research organisations it was 19% (median 4%). In 2009, an average increase in income of 22% was reported for all respondents. The average increase for companies was 21% and for research organisations, 26%. Table 38 shows the average change in income amongst those that reported an increase or fall over the 2011 year. 44 Ernst & Young, Beyond Borders, 2011 45 Ibid 2005 $292m 2007 $395m 2009 $1.1b 2010 Projection $600m 2011 $597m 2015 Projection $1.5b SURVEY ESTIMATES STRATEGIC PLAN PROJECTIONS Figure 11: Progress against revenue projections set in the Queensland Biotechnology Strategic Plan 2005 — 2025 (figure is not to scale) 2025 Projection $4.0b Figure 12: Estimated income growth for respondents, 2011 (114 respondents) TABLE 38: Income change in the 2011 year (112 respondents) Number of respondents nominating Average Those reporting no growth 29 N/A Companies 21 N/A Research Organisations 8 N/A Those reporting a fall in income 19 -22.8% Companies 17 -23.5% Research Organisations 2 -33.0% Those reporting income growth 65 34.4% Companies 49 34.7% Research Organisations N/A - not available 16 33.6% Ernst & Young reported that across the listed sectors in the US, Europe, Canada and Australia, revenue grew by 8% in both 2009 and 2010 (Table 39). Listed US companies reported 10% income growth in 2009 and 2010, while listed Canadian Biotechnology companies reported 1% growth in 2010 and 9% in 2010. 44 The Australian listed Biotechnology sector reported growth in revenue of 17% in 2010. 45
TABLE 39: Growth in income in the listed biotechnology sectors in different regions 46 Region Year 2009 2010 US, Europe, Canada and Australia 8% 8% European companies 8% 12% US companies* 10% 10% Canadian companies + 9% 1% Australian companies N/A - not available * USA figures excluding Genentech acquired by Roche N/A 17% + Canadian figures excluding Biovail acquired by Valeant Pharmaceuticals According to the BioSpectrum Asia-Pacific Industry Survey, the Life Sciences Industry in Asia-Pacific grew 3.4% in 2009 with revenues of $110.9 billion. The highest growth Asia-Pacific countries in 2009 were China, India, South Korea, Australia and Singapore. The same survey in 2010 indicated industry growth of 16.6% and revenue of $128.3 billion. The scope of this survey was limited to core Life Sciences companies (pharmaceuticals, biotechnology and medical devices) across Australia, New Zealand, China, India, Malaysia, Singapore, South Korea and Taiwan. 47 7.2 Grant Income Federal and State government and non-government grant programs are an important source of funding in high-technology and high-risk industries. For research organisations, grants represent the most significant source of income for basic and applied research. For companies, grants and other funding programs can provide valuable funding to support business expansion, R&D, innovation and exporting. The 2012/2013 Federal Budget provided some ongoing support for business innovation. 48 The Innovation Investment Fund received $100 million to develop fund managers with experience in the early stage venture capital industry and encourage the development of new companies which are commercialising R&D. Commercialisation Australia was allocated $294 million over the five years to 2014, with ongoing funding of $82 million per year after 2014, to support innovative Australian companies and entrepreneurs through four main grant programs. The R&D Tax Incentive, which applied from 1 July 2011, includes a 45% refundable tax offset for SMEs (aggregated turnover of less than $20 million) and a 40% non-refundable tax offset for all other companies. The R&D Tax Incentive is expected to provide support for small and medium-sized enterprises to the value of approximately $1.8 billion. 7.2.1 Total Grant Income Total reported grant income in 2011 across 93 respondents was $594 million (companies $14 million; research organisations $580 million). Companies (38) reported $27.2 million in new grant funding during 2011 with an average grant size of $716,000. Of the funds awarded, $13.6 million was drawn down in 2011. Research organisations reported a total of $168.8 million in new grant funding during 2011. Reporting the average grant size is not possible as the majority of research organisations reported funding from granting bodies, such as NHMRC and ARC, in aggregate. 7.2.2 Grant Programs COMPANIES Twenty-seven companies nominated 27 grant programs (see full list in the Appendices) from which funds were awarded in 2011. Commonwealth Government grant programs provided the greatest number of grants for companies (60.5%). The Queensland Government, across several programs, accounted for 27.9% of grants awarded to companies. The top three individual grant schemes accessed by companies (by number of grants reported) were: 1. Commonwealth R&D Tax Concession/Offset (18.6%) 2. Queensland Government Smart Futures Fund (14.0%) 3. AusTrade Export Market Development Grant (7.0%) RESEARCH ORGANISATIONS 14 research organisations nominated 49 grant programs (see full list in the Appendices) from which funds were awarded in 2011. The top three grant programs accessed by research organisations (by amount of funding awarded) were: 1. NHMRC (48.5%) 2. ARC (20.0%) 3. Queensland Health (8.2%) 7.3 Federal Funding for Institutional Medical and Biotechnology Research In 2010, Commonwealth Government expenditure on health and medical research was approximately 0.09% of gross domestic product (GDP), down from 0.11% in 2006. In 2006, Australia was ranked fourth amongst OECD countries for health R&D as a percentage of GDP. However, by 2010, Australia had fallen to tenth position, behind the USA, Norway, UK, Canada, Portugal, Estonia, Korea, Luxembourg and Spain, and now invests 18% less than the OECD average (Figure 13 — overleaf). 49 Federal Government grants administered by the NHMRC and the ARC are a significant source of funding for medical and biotechnology research conducted at research institutions. Other significant Federal funding programs for health and medical research include the Cooperative Research Centres (CRC) program (supporting end user driven research collaborations) and the Health and Hospitals Fund (for building and upgrading health and medical research and training facilities across Australia). 46 Ernst & Young, Beyond Borders, 2011. 47 BioSpectrum Asia-Pacific Life Sciences Industry Survey 2009 and 2010, www.biospectrumasia.com; accessed 29 May 2012 48 The Hon Greg Combet AM MP, Media Releases Innovation the key to driving productive industries 08 May 2012 http://minister.innovation.gov.au/gregcombet/ MediaReleases/Pages/InnovationTheKeyToDrivingProductiveIndustries.aspx; accessed 29 May 2012. 49 OECD Science, Technology and Industry Scoreboard 2011, Targeting New Growth Areas , Health innovation. 45
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Page 7 and 8: TABLE OF CONTENTS IMPORTANT NOTICE
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Page 65 and 66: 10.2 Finance 10.2.1 Debt and Equity
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Page 69 and 70: By Anne-Marie Birkill, Partner at O
Page 71 and 72: 11.1.2 Contract Manufacturing Half
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