Beyond Borders: Global biotechnology report 2010

of today’s increasingly pragmatic industry.
For example, Comvita, a biotech business
created to exploit the health benefits of
manuka honey, is continually researching
and bringing new products to market.
Partnerships and alliances
Many New Zealand biotechnology
companies partner and share information
with other local and foreign organizations
for product, process development or
research. Aquaflow Bionomic Corporation
is working with US-based Honeywell to
develop technology that enables the
harvesting and refining of wild algae to
create biofuels (For more on biofuels,
see the roundtable article “Embracing the
future” on page 98). Other applications of
the innovative technology, such as carbon
sequestration, are also being explored.
The growing trend of partnering is gathering
momentum, particularly with universities
and research institutions. The University
of Auckland Institute for Innovation in
Biotechnology — built in 2009 and the
first such incubator in New Zealand
brings together academics and industry
partners from biotech and pharma in one
location. Partners draw on the expertise
of internationally recognized academics
through collaborations or contract research.
The Government-supported institute aims to
increase collaboration between universities
and industry, lower entry barriers for
newcomers and advance New Zealand’s
biotechnology workforce. A number of
venture-backed businesses are already
based in the institute or planning to set up
operations, including CoDa Therapeutics and
Androgenix.
Government support
A new Government was elected in 2008,
and despite eliminating the R&D tax credit,
it maintains a significant focus on innovation
and biotechnology. The challenge is to
identify ways to improve the effectiveness of
ongoing investment in science, technology
and innovation, particularly biosciences.
In encouraging development, the
Government not only gave Living Cell
Technologies (LCT) approval to enter
Phase II trials of DIABECELL-encapsulated
porcine islets for treating insulin-dependent
diabetes, but also provided NZ$7.8 million
(US$5 million) in grants to the company to
fund the clinical trials. Interestingly, LCT
has also licensed its patented encapsulated
technology to non-competing partners to
help fund ongoing trials.
In March 2010, a Government-appointed
taskforce issued recommendations
for improving the performance of the
Government-funded Crown Research
Institutes (CRIs). The report recommended
significant changes to the way CRIs are
operated to provide greater funding
certainty for long-term projects. It also
included measures to encourage technology
transfer and boost spin-offs of businesses
from CRIs, particularly in health care,
agricultural biotech and food technology.
Outlook
While the Government interest in the
industry is a positive step, the growth
of New Zealand biotechnology will also
be driven by better offshore product
marketing, growth in sectors such as
biofuels and foods, and the ability to serve
the needs of other emerging markets.
46 Beyond borders Global biotechnology report 2010
For example, China — a country that has
been actively investing in New Zealand
agriculture — is showing an interest in New
Zealand biotech, attracted by the country’s
high standards of education and strong
product/food safety systems.
New Zealand biotech companies are taking
a fresh look at business models, deal
structures, financing, partnering and joint
ventures. They are looking for investors
to develop their products further and
provide market entry into Europe and the
US. They are also working to get products
to market sooner. Many pipeline products
are at a stage in the life cycle where they
can be licensed to offshore organizations
to create a revenue stream to fund further
R&D. Continued growth will depend on
companies’ abilities to follow through on
these creative and pragmatic solutions.