AusBiotech: Anna Lavelle. Dedicated to the development, growth and prosperity of the Australian biotechnology industry




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Video title: AusBiotech: Anna Lavelle. Dedicated to the development, growth and prosperity of the Australian biotechnology industry
Released on: December 05, 2012. © PharmaTelevision Ltd
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In this episode of PharmaTelevision News Review, filmed at AusBio 2012 in Melbourne, Australia, Fintan Walton talks to Anna Lavelle, CEO at AusBiotech
Perspective and overview of Australian biotechnology industry
Fintan Walton:
Hello and welcome to PharmaTelevision News Review here at AusBiotech in Melbourne, in 2012. On this show I have Anna Lavelle, who is CEO of AusBiotech, welcome.
Anna Lavelle:
Good to see you Fintan.
Fintan Walton:
It's good to have you again Anna, obviously AusBiotech is not just a conference it's an organization, an important organization for the biotech industry in Australia, and you've been at the helm of AusBiotech for some time?
Anna Lavelle:
Seven-years.
Fintan Walton:
Seven-years indeed.
Anna Lavelle:
How time flies.
Fintan Walton:
And but also it flies but also it changes, time changes and events change, so I suppose the first thing we want to know is from your perspective how is Australian biotechnology?
Anna Lavelle:
It's a great question, I've seen a lot of changes in seven-years. I remember when I started the pharmaceutical industry was not nearly as engaged with SME's as they are now so that's been a significant shift over that time and also the maturing of the sector of course, I mean you'd expect that over a seven-year period, but it has been quite dramatic and we see that the Australian companies are doing very, very well on the share market as well. So they are out performing in NASDAQ, outperforming the all Ordinaries and since about the GFC, since the global financial crisis 2007/8 really the small biotech's have been returning for investors, so that's good to see too.
Tax credits by Australian Government for biotech industry
Fintan Walton:
Right, you know we talk about the maturing of biotech over the last few years, it's not without its challenges, obviously one of the important roles that AusBiotech has is to make sure that the environment for biotech is thriving let's say in Australia, and there are several levers that you, that can be pulled through government, one of those is for an example tax, and obviously the government here introduced this tax credit, I think it was last year, and how is that going and is that likely to be threatened in the future?
Anna Lavelle:
We do an annual survey and we survey the CEO's, and one of the areas of the survey is about the business environment, and not surprisingly that was the one that scored the poorest over all. So people were very optimistic about their company, about their technology, even talking about hiring staff, growing, but when we talked about the environment they were concerned about tax, they were concerned about regulation, concerned about a lot of red tape in processes that they had to go through, compliance costs, all of those things that make doing business difficult, but make doing an innovation business even more difficult. To question about tax, we were delighted to see it finally come through as you would appreciate, having argued for so long, but not yet a year later there a treasurer set up a Business Tax Working Group and asked the question can we get a lower corporate tax rate across Australia, and can we do that in a cost neutral way that is, can we take the money from other tax benefits or other tax programs. So here we are not even one-year down the track and the corporate, the company tax, R&D tax initiative was threatened and I was aghast as you can imagine, flabbergasted that we were at that place and when we spoke to the individuals that made up that committee, they were very unaware of the importance of a directed tax like that, R&D tax, very unaware of what the impact was, not only on the company, but eventually on the community and on the patient groups, and that has been explained now and we've heard that that threat has been removed.
Fintan Walton:
How important is the tax credit in terms of long-term planning, because obviously if there are changes happening every year people can't plan against that, can they?
Anna Lavelle:
Absolutely, and one of the things that we have expressed our concern about, and I know others have as well, is the reform fatigue that everybody has. Governments seem to think it's a great idea to talk about reforming, reviewing, looking at things, opening up things and see it as a healthy thing, and to a certain extent it is, but for the business community it's very difficult to keep readjusting your long-term business plan around regular change. So we have been talking in the last 12 months a lot about stability, predictability and also this issue of sovereign risk, if investors see that something that was attractive, that they've actually geared toward, is now no longer available or threatened then there may be a different decision that's taken by investor group and we don't want to see that.
Fintan Walton:
Sure and the world is unstable enough without, with that they have been jolted by government?
Anna Lavelle:
Indeed.
Current fundraising environment for biotech companies
Fintan Walton:
So the other element of course of all of this is creating the environment which allows companies to raise finance, to raise money, how would you describe the current environment?
Anna Lavelle:
For Australia very positive actually. I know it's difficult globally, I know there is less VC money available, but if you look at the Australian share of that we are doing quite well and as you know AusBiotech over the last few years has really focused on the investor community and we have put together investment summits, not only in Australia but in other places, in New York, San Francisco, Amsterdam, Hong Kong and we will be continuing to do that in the future and we know that companies have met new potential investors and being invested in by people that they didn't necessarily have a relationship with before. So we know that's made a really good contribution. If we look at the public registers and we look at the amount of money that listed companies are bringing in from, you know non-retail investors, it's very encouraging and the amount of direct foreign investment that's coming into Australian companies has been significant since the global financial crisis, so it would seem to me that despite the environment the companies are doing very well and I think it's because they are value for money, they are very capital efficient, they don't have a lot of fat, they are used to working with a little and making it go a long way and of course that's what investors are looking for.
Impact of global financial crisis on ASX and growth of biotech companies
Fintan Walton:
Right, the other element of that is what's going on with the ASX, because obviously the ASX is, has been a traditional way for biotech's quite early on in their life cycle to get listed on the ASX, but equally important is the fact that recently that has been, you know, obviously declined because of the global financial crisis, some part, so what effect does that had and what comments would you make about the ASX right now?
Anna Lavelle:
The IPO window is closed as you know and that is a concern, and also a couple of companies that did list didn't do as well as they've thought post listing so that's also a concern.
Fintan Walton:
Yes, definitely.
Anna Lavelle:
But one of the things we have noticed over the last year or so is that companies that are listing on the ASX are not Australian companies they are US companies.
Fintan Walton:
These are biotech companies?
Anna Lavelle:
Yes and medtech companies, so that's been really an interesting development I guess, we can't yet call it a trend, because it's happened over two-years but it's a small number of companies, but that's something worth watching and asking why is it that American companies are attracted to listing on the ASX versus listing on the NASDAQ. So we have noted that and there has been some interesting conversations about why that so with the companies themselves and with investors who are speculating on this.
Fintan Walton:
Right, and what are the, what are their conclusions?
Anna Lavelle:
Well compliance costs in the US, also the drying up of capital in the US, the fact that the ASX is less onerous, lets say more accessible if you like, that they can become a liquid faster, so there are some practical reasons for it but also I think that what we can take away from that is that there seems to be for these companies and their investors no sense of risk in doing so, and I think that's the take home message.
Future prospectus in economic conditions and biotech industry
Fintan Walton:
Sure, so then Anna how would you describe looking at the environment as we look at it both from what government has been able to do, the economic conditions and the industry itself, how would you describe it now, and what you expect in the future?
Anna Lavelle:
I think we are in a very good place, especially for the mid-size companies that have come through in the last decade, there are a number of them who have hit a really interesting milestone, for example we now have the first molecule that came from a twinkle in someone's eye to being listed on the PBS in Australia and that's a good milestone, that's Pharmaxis. We have a very rich Phase I deal which is Bionomics $345 US million with Ironwood [PharmaDeals ID = 44749] and that's a healthy Phase I deal. And we have also got other companies that are waiting on FDA approvals that I think will eventually come through like QRxPharma and others. So we do have companies that are moving inextricably to market, despite all of the challenges and all of the hurdles that people do have, and that gives me a great confidence. We also, I think, say, I have seen in companies like Starpharma a significant increase in the market capitalization which is also encouraging, so that the top end are doing very, very well, what I am concerned about is the birth of companies.
Fintan Walton:
Right.
Anna Lavelle:
You know the spin-out companies, the young companies, they are struggling more, it's difficult for them to find access to well priced capital, or indeed any capital and so though that end is not as vibrant as perhaps it should be.
Fintan Walton:
And would you mean that, does that ultimately you mean you are going to just have less biotech?
Anna Lavelle:
It could do, it could do. I am an optimist like everybody in biotechnology, you have to be an optimist, it's one of the genetic requirements, but I think that what governments now realizing with recent reviews looking at translational work is that we cannot justify putting significant money into basic research, never to expect it to be commercialized into something for their community, and I think that more and more policy makers are understanding they have to become better schooled, better self-informed about the commercialization process, what it means and how to engage with that, especially at the early stage.
Fintan Walton:
Anna Lavelle, thank you very much indeed for coming on the show.
Anna Lavelle:
My pleasure Fintan.
Fintan Walton
Dr Fintan Walton is the Founder and CEO of PharmaVentures . After completing his doctoral research on the genetics of cell proliferation at the University of Michigan(US)and Trinity College (Dublin, Ireland), Dr Walton gained broad commercial experience in biotechnology in management positions at Bass and Celltech plc (1982-1992).
Anna Lavelle
Chief Executive Officer
At the time of this PTV interview Anna Lavelle serves as Chief Executive Officer of AusBiotech. Dr Anna Lavelle was appointed inaugural Chief Executive Officer and Executive Director of AusBiotech Ltd in June 2005. AusBiotech is the peak industry body for biotechnology with over 3,000 members. AusBiotech is part of the Pharmaceutical Industry Council and Chairs the Asia/Pacific biotechnology network. Dr Lavelle also Chairs or is a member of, various Federal and State government committees associated with biotechnology. Previously Dr Lavelle was a Senior Executive with the Australian Red Cross Blood Service (ARCBS), commencing in 1998 as Director responsible for Strategic Planning and Business Development. Prior to joining ARCBS, Dr Lavelle held positions of Chief Executive Officer of a public health organization, Industry Lobbyist for a member organization and commenced employment as an academic at Monash University, Melbourne. Dr Lavelle holds a Doctor of Philosophy in Genetics from the University of Melbourne and is a graduate of the Australian Institute of Company Directors.
PharmaVentures
PharmaVentures is a corporate finance and transactions advisory firm that has served hundreds of clients worldwide in relation to their strategic deal making in the pharmaceutical, life science and healthcare sectors. Our key offerings include: Transactions / deal negotiations; Product / technology valuations; Deal term advice; Due diligence &expert reports; Strategy formulation; Alliance management; and Expert opinion for litigation/arbitration cases. PharmaVentures provides the global expertise to ensure our clients generate the highest possible return on investment from all their deal making activities. We have experience of all therapeutic areas and can offer advice on both product and technology commercialization.
AusBiotech
AusBiotech is Australia's biotechnology industry organization, which represents over 3,000 members, covering the human health, agricultural, medical device, bioinformatics, environmental and industrial sectors in biotechnology. AusBiotech is dedicated to the development, growth and prosperity of the Australian biotechnology industry, by providing initiatives to drive sustainability and growth, outreach and access to markets, and representation and support for members nationally and around the world. AusBiotech has representation in each Australian state providing a national network to support members and promote the commercialization of Australian bioscience in the national and international marketplaces. The structure is a not-for-profit limited guarantee company managed by a Board elected by members in line with its constitution. AusBiotech membership base includes biotechnology companies, ranging from start-ups to mature multinationals, research institutes and universities, specialist service professionals, corporate, institutional, individual and student members from Australia and overseas. In assessing the current needs and issues faced by Australia's core biotechnology companies, AusBiotech's Strategic Business Plan addresses the requirements to build a favorable environment to enable companies to grow, help them globalize and position Australia as a significant biotechnology industry for increasing international investment and interest.