Australia has grown a busy biotech sector, but what awaits bioentrepreneurs in this small, geographically isolated country.
pace with this global revolution.
Another mistake concerned going public too early. The Australian Stock Exchange (ASX) has a low bar for listing, and thus is amenable to smaller companies. A company with a post-IPO market cap ofA$10 million can list, something unseen in the US where a firm needs to be worth $100 million before listing. This sounds like a positive – a more forgiving public market – but Australian firms are forced to go public early because of a weak venture capital (VC) environment in Australia. As of 2014, Australia’s 88 ASX-listed biotechnology companies were valued at more than A$51 billion. Without suitable market caps, many of these companies are unable to raise additional funds.
or our part, Australia is well on its way to achieving this vision of a successful bio-economy. The latest Scientific American, Worldview Scorecard 2013 ranked Australia number seven in biotechnology in the world up from number ten in last year. We ranked best in the world for the “Best growth in public markets” and second globally for “Greatest public company revenues” and the “Most public companies”. Australia’s 88 ASX-listed biotechnology companies are valued at more that $51 billion (BioForum, April 2014) – a great contribution to the bio-economy.Despite the challenges of the global economy and the degree of difficulty in building a biotechnology and life sciences sector from scratch, Australia is doing very well by any comparative measure, with an impressive return on investment from a maturing stock of quality companies. Australian biotechnology boasts a raft of success stories and a world-class industry.
Since its emergence in the early to mid-nineties, the biotechnology industry in Australia has achieved a great deal. The year 2014 dawned with news that biotechnology has become a ‘20-year overnight success’ with The Age and Sydney Morning Herald (4 Jan 14) reporting that “biotech has finally boomed”. The article reported the array of successes of 2013, which included IPOs, four to nine-fold surges in share prices for a number of companies, high profile investors turning their attention to biotech and a steady flow of capital raisings that totalled $739.1 million (Biotech Daily, 2 Jan 14), the highest amount since 2007.
Biotech Daily reported that its ‘Top 40’ Index of listed biotechnology companies ended 2013 up 18.1% for 2013, compared to the benchmark S&P ASX 200 15.1% up for the year and the majors (Cochlear, CSL and ResMed) up 17.9%.
It’s true there are a handful of good firms with nice stories, such as Mesoblast, Sirtex Medical, Impedimed and Clinuvel Pharmaceuticals, but medium-cap Australian stocks have been pounded on the exchange , even as stocks in the US have flourished. So while Australia has companies that are providing employment and are profitable, it has room to improve.