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

Queensland Life Sciences Industry Report 2012
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were international companies, Bioniche from Canada,
which is cross-listed on the ASX and TSX, and US company,
GI Dynamics.
Across the biotechnology industry globally, the number of
IPOs dropped in FY2011. The median ‘age’ of companies
at IPO has increased from five years (1999–2001) to
nine years (2008–2010), making exits more difficult and
putting pressure on VCs, whose funds often have 10 year
timeframes. 97
Figure 32: Life Sciences company IPOs on the ASX, 2007-2011 98
According to the Australian Private Equity & Venture Capital
Association, total private equity and VC funds raised during
FY2011 grew by 72% compared to FY2010. 99 However, new
funding commitments to Australian VCs continued a decline
that commenced in FY2008. Three VC funds raised a total
of $120 million in FY2011, down 35% from FY2010 (13 funds
raised $158 million) and 40% from FY2009 (7 funds raised
$299 million). In both 2010 and 2011, the majority of VC
commitments were from Government-backed innovation
funding programmes e.g. Innovation Investment Fund. In
Australia, Life Sciences (including healthcare) 100 companies
received 58% of all VC amounts invested and accounted for
51% of all investee companies. 101
These investment trends have significant implications
for Life Sciences companies, particularly because VC
funding is often critical for early stage development of new
technologies. Investments tended to favour later stage
companies, later stage funding rounds and existing investee
companies, with follow-on rounds accounting for 70% of
total VC amounts invested in FY2010. 102 Data from the OECD
also showed that the majority of VC investments in Australia
(68%) were devoted to later stage investments rather than
pre-seed/seed/start-up investments. 103 This trend across
the Australian Life Sciences Industry is mirrored in the
results from the current survey: 88.7% of reported capital
was sourced from existing shareholders and ‘other private
equity’, whilst venture capital and business angel funding
provided less than 4% of finance raised.
According to the Ernst & Young Beyond Borders report,
large debt financings by mature, profitable biotechnology
companies in the US grew by 150% in 2010. However, once
debt financings by mature companies were removed from
the dataset, a 20% decline in the amount of the remaining
‘innovation capital’ was evident. The majority of this funding
(82.6%) was received by 20% of companies, while the bottom
20% of companies raised 0.4% of total funds. As in previous
years, Ernst & Young described an industry divided by the
‘haves’ and ‘have nots’, with funds concentrated into a
smaller group of companies. 104
In Australia, BioShares reported that the publicly-listed
biotechnology industry raised $630 million in 2011, up 14%
on the $554 million in 2010. 105 However, Ernst & Young
noted that medical devices companies rather than core
biotechnology companies were increasingly benefiting from
capital raised. 106
10.3 Intellectual Property
Patent application filings are one parameter used to indicate
innovation activity and the importance placed on patents
is evidenced by the estimated 7.3 million that were in force
worldwide in 2010. 107
The number of patent filings globally declined by 3.6% in
2009 but increased by 7.2% in 2010 to 1.98 million, driven
by applications from China and the US. The number
of PCT patent filings globally fell by 4.8% in 2009 and
this decline is likely a consequence of the GFC and its
impact on the availability of capital to fund innovation and
commercialisation, leading to reduced R&D expenditure and
more selective expenditure on IP protection. The number
of PCT filings grew by 5.7% in 2010, with applications
from China, Japan and Korea accounting for 94% of this
increase. 108
The number of patent applications where Australia is listed
as the country of origin, declined in 2009 for the first time
since 1999 (Figure 33 – opposite).
An analysis was done of the number of published patents
originating in Australia across four main technology areas
relevant to the Life Sciences sector (i.e. biotechnology,
pharmaceuticals, environmental technology and food
chemistry). This analysis revealed that, with the exception
of pharmaceutical patents, the steady increase in patent
applications across all sectors between 2002 and 2005
97 Ernst & Young, Beyond Borders, 2011
98 PwC BioForum Publication Edition 36, Quarter 4 FY11, August 2011, PwC BioForum, Edition 25, Quarter 4 FY08, August 2008.
99 Australian Private Equity & Venture Capital Association
100 Note: AVCAL’s Life Sciences definition includes healthcare
101 Australian Private Equity & Venture Capital Association, Yearbook, 2011
102 Australian Private Equity & Venture Capital Association, Yearbook, 2011
103 OECD (2011), Entrepreneurship at a Glance 2011, based on OECD Entrepreneurship Financing Database, June 2011.
104 Ernst & Young, Beyond Borders 2011
105 Australian Life Scientist, ‘A new year, a new look and good news is rolling in already’, 12 January, 2012
106 Ernst & Young, Beyond Borders, 2011
107 World Intellectual Property Organisation, World Intellectual Property Indicators, 2011, http://www.wipo.int/export/sites/www/freepublications/en/
intproperty/941/wipo_pub_941_2011.pdf
108 World Intellectual Property Organisation, World Intellectual Property Indicators, 2011.