Geelong Biotechnology
Opportunities Study
Buchan Consulting
Final Report
July 2004
Geelong Biotechnology Opportunities Study
Contents
Executive Summary .................................................................................................... 5
G21 Strategy .......................................................................................................................... 5
Defining the Boundaries ......................................................................................................... 5
Australia - A Major Biotechnology Hub ................................................................................. 5
Biotechnology in Victoria ........................................................................................................ 5
Victorian Research Clusters .................................................................................................. 6
Biotechnology in Geelong ...................................................................................................... 7
SWOT Analysis ...................................................................................................................... 7
Drivers of Future Development .............................................................................................. 8
The Strategy........................................................................................................................... 8
A Geelong Biotechnology Network ...................................................................................... 12
Taking the First Steps .......................................................................................................... 12
Recommendations ............................................................................................................... 13
1
Introduction ..................................................................................................... 15
2
G21 Context ..................................................................................................... 16
2.1
2.2
3
G21 Our Region our Future - Geelong Region Strategic Plan .............................. 16
Biotechnology Project ............................................................................................ 17
Defining Biotechnology .................................................................................. 19
3.1
Defining Biotechnology .......................................................................................... 19
3.1.1
Analysing the Sector ...................................................................................... 19
3.1.2
Defining the Industry...................................................................................... 20
3.2
Applications of Biotechnology ................................................................................ 20
4
Biotechnology - a Global Industry.................................................................. 22
4.1
4.2
4.3
5
Key Industry Centres .............................................................................................. 22
Size of the Industry................................................................................................. 22
Growth of Networks and Alliances ......................................................................... 23
Biotechnology in Australia ............................................................................. 24
5.1
Industry Structure ................................................................................................... 24
5.2
Public Sector Research .......................................................................................... 25
5.3
Australian Biotechnology Companies .................................................................... 25
5.3.1
Core Biotechnology Companies .................................................................... 25
5.3.2
Publicly Listed Biotechnology Companies ..................................................... 28
6
Biotechnology in Victoria................................................................................ 29
6.1
6.2
6.2.1
6.2.2
6.3
6.4
6.4.1
6.4.2
7
Overview ................................................................................................................ 29
Public Research Organisations .............................................................................. 30
Research Institutes ........................................................................................ 30
Cooperative Research Centres ..................................................................... 31
Clinical Trials .......................................................................................................... 31
Biotechnology Companies ..................................................................................... 32
Core Companies ............................................................................................ 32
Group 2 Companies ...................................................................................... 34
Support for Biotechnology in Australia ......................................................... 36
7.1
Policy Overview ...................................................................................................... 36
7.2
Australian Government Support for Biotechnology ................................................ 37
7.2.1
Funding for Research .................................................................................... 37
7.2.2
Research and Development Tax Concessions ............................................. 38
7.2.3
Major Initiatives .............................................................................................. 38
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Geelong Biotechnology Opportunities Study
7.2.4
Biotechnology Centre of Excellence .............................................................. 38
7.2.5
Biotechnology Innovation Fund ..................................................................... 39
7.3
Victorian Government Policies and Programs ....................................................... 39
7.3.1
Biotechnology Strategic Plan......................................................................... 39
7.3.2
Bio21.............................................................................................................. 40
7.3.3
Science Technology and Innovation Fund .................................................... 40
7.3.4
Synchrotron ................................................................................................... 41
7.3.5
Bio21.............................................................................................................. 41
7.3.6
Science Technology and Innovation Fund .................................................... 41
7.3.7
Synchrotron ................................................................................................... 41
7.3.8
Funding for Infrastructure .............................................................................. 43
8
Biotechnology Locations in Victoria .............................................................. 44
8.1
Biotechnology Clusters in Victoria .......................................................................... 44
8.2
The Major Precincts ............................................................................................... 44
8.2.1
Parkville Precinct ........................................................................................... 44
8.2.2
Alfred Medical Research and Education Precinct (AMREP) - Prahran ......... 44
8.2.3
Monash Health Research Precinct - Clayton ................................................ 45
8.2.4
Werribee Precinct .......................................................................................... 45
8.2.5
Bundoora Precinct ......................................................................................... 45
8.2.6
Austin Biomedical Alliance Precinct - Heidelberg ......................................... 45
8.3
Location of Biotechnology Firms ............................................................................ 47
9
Biotechnology in Geelong .............................................................................. 48
9.1
Overview of the Sector ........................................................................................... 48
9.2
Research Resources .............................................................................................. 51
9.2.1
Research Funding ......................................................................................... 51
9.2.2
Researchers .................................................................................................. 51
9.3
CSIRO .................................................................................................................... 52
9.3.1
CSIRO Geelong ............................................................................................. 52
9.3.2
Research Priorities ........................................................................................ 53
9.3.3
The Diagnostic Sciences Program ................................................................ 53
9.3.4
The Infectious Diseases and Food Safety Program ...................................... 53
9.3.5
The Vaccines and Therapeutics Program ..................................................... 53
9.4
Deakin Research .................................................................................................... 54
9.4.1
A Commitment to Research .......................................................................... 54
9.4.2
Research Priorities ........................................................................................ 55
9.4.3
Research Funding ......................................................................................... 55
9.4.4
Biosciences at Deakin ................................................................................... 58
9.5
BioDeakin ............................................................................................................... 60
9.6
ChemGenex Pharmaceuticals ............................................................................... 61
9.7
Chirogen ................................................................................................................. 61
9.8
Barwon Health ........................................................................................................ 62
9.8.1
Clinical Trials ................................................................................................. 62
9.8.2
Osteoclast Cell Biology.................................................................................. 62
9.8.3
Douglas Hocking Research Institute ............................................................. 62
9.9
PIRVic Marine and Freshwater Science ................................................................ 63
9.10
CSIRO Textile and Fibre Technology .................................................................... 63
9.11
Geelong Education and Training............................................................................ 64
9.11.1
Deakin University ........................................................................................... 64
9.11.2
Gordon Institute ............................................................................................. 65
9.11.3
Marcus Oldham College ................................................................................ 65
10
SWOT Analysis ................................................................................................ 66
10.1
Strengths of Geelong ............................................................................................. 66
10.1.1
Reputation and Infrastructure Foundations are Significant ........................... 67
10.1.2
Quality Education is Available ....................................................................... 67
10.1.3
Cooperation and Linkages............................................................................. 67
10.1.4
Locational Factors were Important ................................................................ 68
10.2
Weaknesses ........................................................................................................... 68
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Geelong Biotechnology Opportunities Study
10.3
Opportunities .......................................................................................................... 69
10.3.1
Geelong Opportunities ................................................................................... 69
10.3.2
National Opportunities ................................................................................... 70
10.4
Threats ................................................................................................................... 71
11
Developing the Biotechnology in Geelong .................................................... 72
11.1
Key Factors Supporting Development ................................................................... 72
11.2
Proximity to Academic Excellence ......................................................................... 73
11.3
Business Model for Biotechnology Firms ............................................................... 74
11.3.1
Timing Cost and Risk .................................................................................... 74
11.3.2
Business Structures ....................................................................................... 76
11.3.3
Alliances and Partnerships ............................................................................ 77
11.3.4
Location Factors ............................................................................................ 78
11.4
The Need for Funding ............................................................................................ 80
11.4.1
Raising Capital .............................................................................................. 80
11.4.2
Venture Capital and Business Angels ........................................................... 83
11.5
A Skilled Workforce ................................................................................................ 83
11.5.1
Research Leaders ......................................................................................... 83
11.5.2
A Skilled Workforce ....................................................................................... 84
11.6
Research Leaders are Active in Driving Development .......................................... 86
11.7
Established Infrastructure/Co-locations ................................................................. 86
11.8
Technical Support and Services ............................................................................ 87
11.9
Intellectual Property being Generated from Institutions ......................................... 87
11.10
Specialist Education and Training ..................................................................... 87
11.11
Connections with Larger Life Sciences Companies .......................................... 87
11.12
Commercialisation and Patenting Expertise ...................................................... 88
11.13
Lifestyle Attractions ............................................................................................ 88
12
A Growth Strategy ........................................................................................... 89
12.1
Growth Horizons..................................................................................................... 89
12.2
The Strategy ........................................................................................................... 91
12.2.1
Local Growth ................................................................................................. 91
12.2.2
Strategy Overview ........................................................................................ 92
12.2.3
Components of the Strategy .......................................................................... 93
12.3
Expansion of the Current Research Base .............................................................. 94
12.3.1
Deakin University ........................................................................................... 94
12.3.2
Barwon Health ............................................................................................... 95
12.3.3
CSIRO ........................................................................................................... 96
12.4
Increase Commercialisation of Research .............................................................. 97
12.5
Research Cooperation ........................................................................................... 98
12.6
Attracting a New Research Centre ......................................................................... 98
12.7
Developing the Skills Base ..................................................................................... 99
12.8
Developing Research Infrastructure..................................................................... 100
12.9
Attracting a Biosciences Manufacturing Operation .............................................. 101
12.9.1
Scale up Facilities ........................................................................................ 101
12.9.2
Good Laboratory Practice Facilities ............................................................ 102
12.9.3
Large Scale Manufacturing Operations ....................................................... 102
12.9.4
Small and Medium Scale Manufacturing Operations .................................. 104
12.10
Marketing of Geelong Capability ...................................................................... 104
12.11
Networking ....................................................................................................... 105
12.11.1
Assessing the Need for a Network .......................................................... 105
12.11.2
Benefits of a Cluster ................................................................................ 110
12.12
A Geelong Biotechnology Cluster .................................................................... 110
12.12.1
Objectives and Activities ......................................................................... 111
12.12.2
Membership of the Cluster Organisation ................................................ 113
12.12.3
Resources ............................................................................................... 113
12.12.4
Location ................................................................................................... 114
12.12.5
Funding the Network ............................................................................... 114
12.12.6
Governance of the Network .................................................................... 114
12.13
External Linkages ............................................................................................ 114
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Geelong Biotechnology Opportunities Study
12.14
12.15
13
BioMelbourne Network..................................................................................... 115
Linkages with Werribee Technology Precinct .................................................. 116
The Way Ahead .............................................................................................. 117
13.1
A Long Term Strategy .......................................................................................... 117
13.2
Taking the First Steps .......................................................................................... 117
13.3
Establishing the Network ...................................................................................... 118
13.3.1
Geelong Council Taking a Lead Role .......................................................... 118
13.3.2
Key Tasks .................................................................................................... 118
14
Recommendations......................................................................................... 120
Appendix 1 References ....................................................................................... 122
Appendix 2 Geelong Technology Precinct ........................................................ 124
Appendix 3 Werribee Technology Precinct ....................................................... 126
Appendix 4 Public Sector Biotechnology Research and Development .......... 128
Appendix 5 Location of Biotechnology Firms by LGA ..................................... 132
Appendix 6 Location of Metropolitan Research Institutes .............................. 134
Appendix 7 Government Funding Programs..................................................... 136
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Geelong Biotechnology Opportunities Study
Executive Summary
G21 Strategy
This report provides an assessment of biotechnology opportunities in Geelong, it
examines the existing industry and its potential and outlines a strategy for achieving
future growth.
It is part of a series of reviews being undertaken on future industry opportunities in
Geelong. These studies are part of the G21 Strategy and are aimed at assessing
Geelong’s potential for development in key sectors.
Biotechnology was identified in the G21 Strategy as one of the pillar projects – projects
of major significance to the region’s long term future.
Biotechnology was chosen as a pillar project because the region has an existing
research base and the sector is one that is growing at a rapid rate internationally. It is
seen as an industry of the future and one that is knowledge intensive.
Defining the Boundaries
As the basis of industry analysis, there is a need for a clear definition of biotechnology
and the segments that make up the biotechnology sector. A range of definitions of the
sector are often used, ranging from those that are narrowly focused on biotechnology
to broader definitions that take a biosciences approach.
The broader biosciences approach also takes accounts of activities, which are not
directly pure biotechnology, but use the products and processes that are derived from
biotechnology. This broader definition opens up greater research and industry
development opportunities for Geelong.
Activities can be grouped into several broad categories including human healthcare
and medical research, agricultural, environmental, and food.
Each of these categories draws to a varying degree on new technologies in molecular
life sciences, chemistry, biology, applied physics, and engineering and applied
mathematics/ computational sciences.
Australia - A Major Biotechnology Hub
Australia is recognised as a major centre of biotechnology. The biotechnology sector in
Australia comprises: research institutes, cooperative research centres, universities and
private and public companies. The public research organisations are the largest
employers in the sector.
The business component of the sector has the following characteristics: biotechnology
is significant in Australia and is a growing industry; there are around 700 companies
involved in biotechnology in Australia, of which 190 are mainly engaged in
biotechnology activities (core biotech companies) and 490 are involved in related
activities.
Biotechnology is a major focus of government policy at a national and state level. The
key focus is on encouraging research, product and process development,
commercialisation, and the development of international partnerships.
Biotechnology in Victoria
In Victoria, government policy is aimed at making the State one of the world's top five
global biotechnology hubs over the next decade. The Victorian Government released a
major strategy document in 2001. The Government has made a major investment in
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Geelong Biotechnology Opportunities Study
the sector over the past 5 years, and in mid 2004 released an updated Biotechnology
Strategy.
The Victorian biotechnology sector is made up of a diverse range of research areas,
however the State has particular research strengths in medical and plant research.
There are 181 organisations in Victoria involved in biotechnology: medical related
research is dominant, with 105 organisations or 58% involved in the field; plant
research involves 31 organisations.
Victoria accounts for over 35% of biotechnology companies in Australia.
Victorian Research Clusters
There are 6 identified biotechnology precincts in Victoria, and their combined level of
activity is substantial. In total the 6 precincts employ 6000 researchers and have
research funding of around $450 million per year.
The Parkville Precinct is Victoria's largest biotechnology precinct, and is the major
focus for the $400 million Bio21 development. The precinct includes the University of
Melbourne, the Walter and Eliza Hall Institute of Medical Research, the Howard Florey
Institute of Experimental Physiology and Medicine, the Ludwig Institute for Cancer
Research, and the Royal Melbourne Hospital.
The Alfred Medical Research and Education Precinct combines the Alfred Hospital, the
Baker Heart Research Institute, the MacFarlane Burnet Centre and Monash University
School of Medicine. Key strengths of this precinct are research into cardiovascular
disease, viruses and HIV/AIDS.
The Monash Health Research Precinct is a biomedical cluster based around Monash
University's Clayton Campus. It is linked to clinical research with a major focus on
public health and health services. The precinct includes: Monash Institute of
Reproduction and Development, Monash Institute of Public Health, Prince Henry's
Institute of Medical Research and the Southern Health Care Network. Biotechnology
companies located within this precinct include Biota Holdings, Mimotopes and Monash
IVF.
The Werribee Precinct is principally focused on animal and food research. Key
institutions located on the site include the Victoria University of Technology, Food
Science Australia, the Victorian Institute of Animal Science and the CSIRO Division of
Animal Health.
The Bundoora Precinct is focused on plant bioscience. Those located in the area are:
La Trobe University, La Trobe R&D Park and RMIT University Bundoora campus.
Austin Biomedical Alliance Precinct is located in Heidelberg and is based at the Austin
and Repatriation Medical Centre.
A recent study examined the spatial location of biotechnology firms (including devices
and diagnostics) and major research institutes 1. The analysis shows the major
concentrations are in the local government areas of Melbourne, Monash and Yarra.
This reflects the size of the biotechnology precincts located in each of these LGAs, and
the tendency for companies to continue to locate adjacent to the research institutes
that were the foundations for their technologies.
1
Bioscience to Bioindustry A Role for Local Government in Biotechnology in Victoria, Aoris Nova January
2004
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Geelong Biotechnology Opportunities Study
Biotechnology in Geelong
On a total size basis (researchers and research expenditure) Geelong ranks as
Victoria’s 7th biotechnology precinct.
Biotechnology research and development in the Geelong Region is focused in several
areas: CSIRO/AAHL, Deakin University, several spin-off companies AGT Biosciences
(now ChemGenex Pharmaceuticals) and Chirogen, Barwon Health, PIRVic Marine &
Freshwater Science (at Queenscliffe).
In total we estimated that the resources devoted to biotechnology include around 300
researchers and approximately $ 18 million per year in external research funding.
Education and training is also a strength for the region covering: teaching at Deakin in
Biological and Chemical Sciences and Ecology and Environment; and courses at
Gordon Institute for laboratory technicians, environmental testing and pathology.
The major research organisations (CSIRO/AAHL, Deakin and Barwon Health) are
committed to expanding research activity and each has specific growth projects that
they are working on.
For example, Deakin has two successful spin-off companies – ChemGenex (formerly
AGT Biosciences) and Chirogen.
All of the major research institutions have links with major life sciences companies,
through R&D partnerships, contract research or clinical trials.
SWOT Analysis
Geelong has a number of strong positives as an emerging regional biotechnology hub.
A number of strengths come through in the analysis conducted for this opportunities
assessment, and these provide a strong foundation for the future growth. The key
advantages were: a research reputation and significant infrastructure foundations;
availability of quality education; existing cooperation and linkages. Lifestyle factors
were also seen as an important positive.
The major weaknesses identified primarily relate to the current scale of R&D,
fragmentation and the broader lack of recognition of Geelong as a centre for
biotechnology.
Major perceived opportunities were built around the current capability areas. A key
development focus needs to be on building current specialisations through securing
additional research funding. The existing major research strengths were seen in healthrelated research in diseases, drug treatments and pharmaceuticals; animal health –
including diseases and vaccines; aquaculture; and future potential in environmental
applications.
The major threats identified related to the ability of Geelong institutions to compete for
research funding and to scale up their activities, and the impact of shifts in government
research priorities. The region was seen as having only a few key research leaders, the
loss of whom would impact on future growth. While the GTP was seen as a major asset
for the region, concerns were expressed about difficulties if market interest could not be
secured for a phased development of the site.
Concerns were expressed that Geelong would not have the dollars to compete with
other regions that were bidding for biotechnology activities. There was also a concern
that biotechnology had to compete with other G21 projects that may deliver more
immediate pay-offs in business and jobs.
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Geelong Biotechnology Opportunities Study
Drivers of Future Development
In overall terms, Geelong can be classified as an emerging biotechnology location. It
has a base anchored by CSIRO and PIRVic, with significant expansion occurring at
Deakin and plans for expanded research activity at Barwon Health.
Activity and resources are concentrated in the research and discovery phase. Any
major expansion in the medium term will need to be built on both an expansion in
research and increased levels of commercialisation. This will require the attraction of
significant additional funding for these research and commercialisation activities.
In our assessment, we ranked Geelong on a number of recognised drivers of
development in biotechnology.
The region has: a high ranking on research leaders active in the region/driving cluster;
a medium/high ranking on - proximity to academic excellence, established
infrastructure/co-locations, lifestyle attractions; a medium ranking on - generation of IP
from institutions, availability of a skilled workforce, commercialisation, patenting
expertise, technical support and services; and low rankings on connections with larger
life sciences companies, venture capital and business angels.
The Strategy
Our analysis shows that there is a strong foundation for the further expansion of
biotechnology and related areas of biosciences in Geelong. While the sector is small in
scale in comparison with size of the major research precincts in Melbourne, it is
specialising in areas that provide considerable future growth potential. In particular the
areas of human health and aquaculture provide major opportunities.
The key focus of the development strategy outlined in this report is on “growing you
own” with a scaling up in activity through an expansion of research funding and
increased commercialisation.
For several key reasons, the development of biotechnology in the Greater Geelong
Region has to be part of a long-term strategy. This situation arises because of: the long
cycle in biotechnology to bring new discoveries to market; the time taken to build
research capacity and research reputations in new and existing fields; and a need for
and expansion in long term investment in research capacity and infrastructure in the
region.
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Geelong Biotechnology Opportunities Study
The following diagram summarises the growth strategy within the context of the stages
of development of a biotechnology product from concept to market. The value of the IP
increases as the product/technology gets closer to the market.
It shows that Geelong is mainly concentrated in the concept development stage, with
some activity in product development through clinical trials, some partnerships and
other commercialisation activity.
There are some unique features of the sector: the average biotech firm takes on
average 7 years before it is cash flow positive; from an initial investment of $2 million in
discovery, a total of $50-$100 million would be required to take it through development
and trials into the market; and the returns from products that reach the market are very
high. To move through this cycle generally required patient capital and partnerships
with large companies.
The objective of the Geelong biotechnology strategy is to consolidate Geelong’s
research position and move Geelong along the value chain so that by 2015 it will be in
a position to attract a major manufacturing operation, having built a substantial
research infrastructure and commercialisation portfolio.
Concept
Development
Product
Development
Production &
Distribution
Increasing cost
Increasing value
Discovery
Proof of concept/prototype
IP Protection
Regulatory compliance
Preclinical/clinical field trials
Scale up
Manufacturing
Marketing and distribution
Build industry partnerships
Govt funding
Venture capital
Investors
Partnerships
Licensing
Geelong Now
Geelong 2010
Geelong 2015-20
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Geelong Biotechnology Opportunities Study
The strategy outlined in this report has taken a 15 year perspective, with 3 distinct
phases identified.
 Phase 1 (Years 1-5) - Building Research Scale – this first phase over the next 5 years
concentrates on scaling up research activity through an expansion of research funding
and increased commercialisation. While it may take time to secure a result, the
investment attraction needs to commence in Phase 1.
 Phase 2 (Years 6-10) - From Research to Production - this second phase continues the
growth in research and development, while attracting related small to medium scale
production facilities (scale up and bioprocessing). The GTP site will be important as a
location for these activities.
 Phase 3 (Years 11-15) - A Regional Bioindustry Centre - this final phase spans the
period out to 2020. Geelong will have consolidated its position as biotechnology hub,
with a spectrum of activity from discovery to production, and developed to a position
where it has the potential to attract a larger scale production facility (eg
pharmaceuticals or vaccines).
These phases are summarised in the following table.
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Geelong Biotechnology Opportunities Study
Year
Major Activities
Targets
Phase 1
Year 1
2005
. Develop the biotechnology cluster and
network
Develop marketing kit
Increase total research
funding by 15% on 2003
levels
. Improve cooperative activities
. Secure additional research
funding(national and State)
. Develop a new entrepreneurs program
. Develop linkages with BioMelbourne
Network
. Develop other networking programs with
industry
Commence a business/research centre
attraction strategy
. Secure additional research funding
Years 2-5
. Establish Barwon Research
2006-2009
. Start up of Centre for Aquatic Animal
Health
Building Research Scale
. New spin-off companies
By 2009 Increase total
external research
funding by 60% over
2002/03 levels.
Increase number of
researchers
. Extend links with major international
companies(life sciences)
. Commence Development of Stage 2 of
GTP(land development)
. Continue a business/research centre
attraction strategy
. Attract/develop small/medium production
facilities (bio-processing)
Phase 2
. Attract an industry research centre
Years 6-10
. Continue expansion of research centres
External research
funding to have doubled
over 10 years.
2010-2014
. Increase commercialisation
Target 500 researchers
From Research to Production
. Attract small/medium production
. Seek to attract a major manufacturing
related facility
Phase 3
Years 11-15
2015-2019
A Regional Bioindustry Centre
. Attract a major biotechnology related
manufacturing operation
. Continue expansion of research activities
Target 800 researchers
in Geelong
biotechnology
organisations
. Increase commercialisation and creation
of successful spin-off companies
While much of the biotechnology activities will be focused in Greater Geelong, the other
G21 Councils will benefit through residential development and the increase in
knowledge based job opportunities in the region.
Geelong Council needs to take a lead role in facilitating the strategy.
The growth strategy that we are recommending encompasses: expanding the current
research base; developing industry linkages; building research cooperation; attracting a
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Geelong Biotechnology Opportunities Study
new research centre; increasing commercialisation of research; developing skills;
expanding infrastructure; attracting a major player – research centre or manufacturing
operation; marketing Geelong's biotechnology capability; and developing an industry
network.
Achievement of the targets in the strategy will require:
 The major research centres continuing to pursue aggressive growth strategies to
expand R&D.
 Promotion of Geelong as a regional biotechnology hub.
 Development of a segment of the Geelong Technology Precinct as a biotechnology
location.
 Local government, particularly Greater Geelong City Council, taking a active role in
facilitating the development of the sector and helping to secure government support for
specific research and industry programs.
A Geelong Biotechnology Network
Our analysis indicates the need for an organisational structure to deliver the strategy.
While there are already the foundations of a biotechnology cluster in Geelong, there is
a need for a new organisation to be established.
This organisation is BioGeelong - the Geelong Biotechnology Network.
The network would have a range of objectives including: facilitating an expansion in
research funding; assisting with the development of regional, national and international
partnerships; encouraging greater commercialisation of research; assisting in the
development of biotechnology infrastructure; and assisting in the marketing of regional
biotechnology capability.
Taking the First Steps
Our analysis also shows that achieving growth will require the continued momentum
that is embodied in the current expansion plans of Deakin, CSIRO and Barwon Health,
combined with increased cooperation on broader initiatives.
This cooperation is required to realise emerging opportunities and to deal with some of
the constraints identified in the SWOT analysis.
A new vehicle is required to facilitate this industry cooperation on an ongoing basis. As
we have seen there is a need to build on the regional cluster, through the
establishment of a formal Geelong Biotechnology Network.
The next steps would involve:
 Forming a Bioindustry taskforce to consider this report.
 Securing additional funding for the establishment phase of the Network.
 Development of a detailed business plan for the Network.
 Setting up the Network and commencing on the Year 1 projects
The implementation timetable should aim to have the Network in place and functioning
by early 2005.
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Geelong Biotechnology Opportunities Study
Recommendations
The following are the major recommendations in the report.
Recommendation
Strategy Directions
Rec 1 That the focus of the development strategy for
the biotechnology sector in the Geelong region be
primarily on a “grow your own strategy” over the first 5
years
Rec 4 That a major focus of the strategy be on scaling
up the biotechnology sector in Geelong through
securing increased research funding
Priority
Implementation
Responsibility
Timing
Page
Medium
BioGeelong
Deakin, CSIRO,
Barwon Health,
PIRVic
BioGeelong
Deakin, CSIRO,
Barwon Health,
PIRVic
BioGeelong
Deakin, CSIRO,
Barwon Health,
PIRVic
BioGeelong
Deakin, CSIRO,
Barwon Health,
PIRVic
Ongoing
90
Ongoing
93
Ongoing
96
Ongoing
97
Sept 2004
93
Sept –Nov
2004
93
Medium
Rec 5 That a major focus be placed on increasing
commercialisation of research
Medium
Rec 6 That a major emphasis be placed on increasing
research collaboration and joint projects among the
research organisations in Geelong
Medium
Committing to the Strategy
Rec 2 That the development strategy outlined in this
report be adopted as the long term regional
biotechnology plan for the Geelong and the broader
G21 Region
Short Term
Rec 3 That Geelong City Council seek endorsement of
the report from the research organisations and other
major stakeholders and support for its key directions
Establishing a Network
Rec 17 That a Geelong Biotechnology Network
(BioGeelong) be established as the vehicle for
delivering the regional biotechnology strategy
Rec 18 That the BioGeelong – the Geelong
Biotechnology Network be located at the GTP
Rec 19 That the funding for the Network include
member contributions as well as funding from relevant
government programs.
Rec 20 That the Network establish links with key
industry organisations and relevant government
agencies
Rec 21 That as part of the development of the
Network, the potential for linkages with organisations
in the Werribee Precinct be further examined
Short Term
Geelong Council,
other G21
Councils,
Deakin, CSIRO,
Barwon Health
Geelong Council
Short Term
Geelong Council
Feb 2005
108
Short Term
Geelong Council,
Deakin
Geelong Council,
Deakin, CSIRO,
Barwon Health
BioGeelong
Network
Feb 2005
112
Feb 2005
112
October 2004
114
Rec 22 That a Bio-Industry Taskforce be formed to
consider this report and to develop the network
Short Term
August 2004
116
Rec 23 That the City of Geelong continue to take a
lead role in managing the next stages of
implementation of this report including the
development of the BioGeelong Network
Rec 24 That the City of Geelong seek funding from the
Victoria Government for the development of the
BioGeelong business plan; an investment attraction
plan and a biotechnology infrastructure projects plan,
under the Regional Innovations Clusters Program
Short Term
Geelong Council,
Bio Industry
Taskforce
Business Plan
Consultants
Geelong Council,
Deakin, CSIRO,
Barwon Health,
other G21
Councils
Geelong Council
August 2004
117
Geelong
Council/Victorian
Government
September
2004
117
Short Term
Short Term
Short Term
Short Term
Feb
onwards
2005
13
113
Geelong Biotechnology Opportunities Study
Recommendation
Priority
Implementation
Responsibility
Geelong
Council/Victorian
Government
Timing
Page
Rec 25 That following the completion of the business
plan, Council seek additional funding for establishing
the network
Infrastructure
Rec 9 That as one of the early projects of the
BioGeelong Network an assessment be made of
future
infrastructure
needs
to
expand
the
biotechnology sector in Geelong
Rec 10 That the GTP be recognised as a key
infrastructure project that is fundamental for the future
development of biotechnology in the Geelong Region,
including the attraction of research centres and
production facilities
Skills Development
Rec 8 That special regional programs be established
to develop commercialisation and business skills within
the biosciences sector in Geelong. These programs
should be developed by the proposed BioGeelong
Network
Business Attraction & Development
Rec 7 That the attraction of a major new research
centre be established as a medium term goal for
Geelong
Rec 11 That the feasibility of developing regional scale
up facilities at the GTP be investigated by the
BioGeelong Network
Rec 12 That the feasibility of developing GLP facilities
at the GTP be investigated by the BioGeelong Network
Short Term
December 2004
117
BioGeelong
Network
Geelong Council
Consultant
BioGeelong
Network
Geelong Council
Nov 2004
99
2005 onwards
99
Short Term
BioGeelong
Network
Geelong Council
Consultant
Feb 2005
99
Medium Term
BioGeelong
Network
Geelong Council
BioGeelong
Network
Geelong Council
BioGeelong
Network
Geelong Council
BioGeelong
Network
Geelong Council
BioGeelong
Network
Geelong Council
2005 -onwards
98
March 2005
100
June 2005
101
Rec 13 That the attraction of a major biosciences
related manufacturing operation be pursued as long
term goal for Geelong
Rec 14 That the attraction of a smaller scale
biosciences related manufacturing be pursued as a
medium term priority for Geelong
Marketing and Promotion
Rec 15 That an ongoing biosciences industry
marketing program be implemented for Geelong
Biotechnology
Rec 16 That Greater Geelong City Council take the
lead in developing the marketing materials
Long Term
2007 onwards
102
2006 onwards
103
BioGeelong
Network,
Geelong Council
Geelong Council
Feb 2005
104
October 2004
104
Short Term
Medium Term
Medium Term
Medium Term
Medium Term
Short/Medium
Short Term
14
Geelong Biotechnology Opportunities Study
1 Introduction
This report is part of a series of reviews being undertaken on future industry
opportunities in Greater Geelong and the surrounding region2. These studies are part of
the G21 Strategy and are aimed at assessing Geelong’s potential for development in
key sectors.
Biotechnology was identified in the G21 Strategy as one of the pillar projects – projects
of major significance to the region’s long term future.
Biotechnology was chosen as a pillar project because the region has an existing
research base, and the sector is one that is growing at a rapid rate nationally and
internationally. Biotechnology is seen as an industry of the future and one that is
knowledge intensive.
This report provides an assessment of biotechnology opportunities in Geelong, it
examines the existing industry and assesses its potential and outlines a strategy for
achieving future growth.
The information contained in this report is derived from an analysis of a range of
business databases, industry reports and policy documents and research studies,
including major strategy reports commissioned by the Australian Government and the
Victorian Government. It is also based on industry consultations and an assessment of
future opportunities in biotechnology.
Buchan would like to acknowledge the input provided in this project by researchers and
others involved in biotechnology in Geelong and elsewhere. These persons have
provided valuable insights into their own work and honest assessments of the future
potential for developing biotechnology in the region.
We also acknowledge the input from representatives of the G21 Councils, who
participated in the Steering Committee for this project.
2
The G21 Councils include Greater Geelong, Golden Plains, Colac Otway, Surf Coast and Queenscliffe.
15
Geelong Biotechnology Opportunities Study
2 G21 Context
2.1
G21 Our Region our Future - Geelong Region Strategic Plan
G21 provides the strategy framework for reshaping the Geelong Region. The following
diagram summarises the structure of G21. It sets the overall context for this
biotechnology opportunities study.
16
Geelong Biotechnology Opportunities Study
The following diagram shows how the lighthouse projects have relevance to the pillars.
2.2
Biotechnology Project
This Biotechnology Opportunities Study is one of the major projects, under the
Economic Development Pillar.
“Biotechnology Cluster - This project aims to provide a comprehensive analysis of
biotechnology sector opportunities in the Region and prepare a strategy detailing how
actions are implemented to support and facilitate the business development of the sector.”
Source G21 Strategy – Economic Development Pillar
Development of biotechnology has major implications for several of the G21 Pillars –
Economic Development and Research.
The focus on the Economic Development Pillar is on building clusters and networks for
export and business development and providing services to SMEs. Other aspects are
focused on investment and business attraction and developing industry/research
partnerships.
In addition to these outcomes, the Research Pillar has identified a number of areas of
research that would add particular value to community wellbeing and prosperity. These
are: education research; advanced materials manufacturing; textiles research;
aquaculture; animal and human infectious diseases and public health research;
environmental technologies; aged care research; and biotechnology.
A number of proposals are advanced in the G21 Strategy to build the research
capability of the region. These include: more effective leverage of current capability;
improving the networking and communication between research groups; securing
improved research funding including increased local investment in research; increasing
the critical mass of research groups; updating infrastructure and improving access to
‘state of the art’ equipment; improving the profile of research within the Region;
changing the negative attitude of many community leaders towards research; and
increasing community awareness of the attributes and benefits of research. 3 The
findings of our assessment of biotechnology are largely consistent with the directions
outlined in the G21 Strategy.
3
G21 Our Region our Future Geelong Region Strategic Plan P 57
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Geelong Biotechnology Opportunities Study
Another G21 Project is currently being investigated. This is a proposal for a Geelong
based Centre for Population Health and Development 4. This Centre will embrace
population health and development in its broadest sense and provide a collaborative
and sustainable approach to serving the Region’s needs for information, research and
development activity for effective human services, infrastructure, environmental and
economic planning. Examples of activity would include community safety, lifestyle and
well being (arts, culture, sport and recreation), education and lifelong learning, and,
particular needs relating to housing, transport and communications.
4
This Centre will embrace population health and development in its broadest sense and provide a
collaborative and sustainable approach to serving the Region’s needs for information, research and
development activity for effective human services, infrastructure, environmental and economic planning.
Examples of activity would include community safety, lifestyle and well being ( arts, culture, sport and
recreation), education and lifelong learning, and, particular needs relating to housing, transport and
communications.(Project Brief March 2004).
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Geelong Biotechnology Opportunities Study
3 Defining Biotechnology
Biotechnology is expanding globally as its applications are applied more widely to health,
environment, agriculture and manufacturing processes
3.1
Defining Biotechnology
3.1.1
Analysing the Sector
In developing any strategy it is important to define the scope of the sector that is being
examined.
As the basis of industry analysis, there is a need for a clear definition of biotechnology
and the segments that make up the biotechnology sector.
A range of definitions of the sector are often used, ranging from those that are narrowly
focused on biotechnology to broader definitions that take a biosciences approach.
The broader biosciences approach also takes accounts of activities, which are not
directly pure biotechnology, but use the products, technologies and processes that are
derived from biotechnology.
In the same way defining the borders of what make up “the biotechnology industry “can
vary. In this report we have adopted the definition of biotechnology that was used in the
Ernst & Young, Australian Biotechnology Report 1999 (and in subsequent reports).
“Biotechnology is defined as “the application of science and engineering in the direct or
indirect use of living organisms or parts of organisms in their natural or modified forms in an
innovative manner in the production of goods and services or to improve existing
processes.”
Ernst & Young (1999) – Australian Biotechnology Report P5.
This definition is the foundation of much of the industry analysis included in this report.
A similar definition (which also includes devices) has been adopted in the Victorian
Government's strategy documents.
“Biotechnology is the application of knowledge about living organisms and their components
to make new products and to develop new industrial processes.”
Biotechnology Strategic Development Plan for Victoria, Science Technology & Innovation,
2001 P 7
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Geelong Biotechnology Opportunities Study
3.1.2
Defining the Industry
In a recent global study, Ernst & Young used the following diagram to define the
industry. It includes applications in core fields of: medicine and pharmaceuticals,
nutrition and fine chemicals, agriculture, and environment. The sector is supported by
equipment and processes and specialist services.
Source: Ernst & Young
These categories align with those that are used by AusBiotech5 in analysing its
membership, and are also similar to the mix of organisations that are members of the
BioMelbourne Network6.
This broader biosciences approach also has implications for future economic and
industry development. The expansion of the core research and the areas of application
tend to also generate demand for specialist services and equipment and processes.
3.2
Applications of Biotechnology
The biotechnology sector can be divided into universities and research institutions
(which in Australia, receive most of their funding from government) and companies.
Activities can be grouped into several broad categories including human healthcare
and medical research; agricultural; environmental; and food.
Each category draws to a varying degree on new technologies in molecular life
sciences, chemistry, biology, applied physics, and engineering and applied
mathematics/ computational sciences.
The key focus of research and business activities is in areas including genomics,
pharmaceutical/biopharmaceutical, tissue and cell engineering, diagnostics/genetic
testing, medical devices and bioinformatics.
The following table illustrates applications of biotechnology based technologies in
specific industry sectors.
5
Ausbiotech is a national industry association representing the biotechnology sector in Australia.
BioMelbourne Network is an organisation established by the Committee for Melbourne to encourage
development of biotechnology in Victoria. It has received seed funding from the Victorian Government.
6
20
Geelong Biotechnology Opportunities Study
Table 1. Industries that Use Biotechnology
Industry Sector
Health
Application
Pharmaceuticals, diagnostics and
treatment
Agriculture
Plant breeding, animal breeding,
veterinary products and diagnostics
Environmental and resources
Pollution control, land bio-remediation,
water treatment, minerals extraction and
processing and pest management
Food and beverage processing
Starters, enzymes, fermentation
Industrial applications
Further processing of agricultural
products (eg. oils, fibres), bio-processing,
and generation of industrial enzymes
Energy production
Biomass
Source: Biotechnology Strategic Development Plan for Victoria. 2001
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Geelong Biotechnology Opportunities Study
4 Biotechnology - a Global Industry
Biotechnology is a global industry that is dominated by US firms and research organisations.
Business and research activity is also expanding across a range of locations across the
world, including Australia.
4.1
Key Industry Centres
The biotechnology sector is expanding around the world, with new centres of
incubation, discovery and development emerging in a range of locations.
 The majority of the industry is concentrated in the United States, with major
concentrations in California, Boston, Pennsylvania, and New York.
 Australia has a long established reputation as a world leader in biotechnology research,
especially in biomedical and agricultural applications.
 Over the last decade, new research and development clusters have emerged in
Canada, the United Kingdom, the Netherlands and Japan.
Other countries including Singapore and Malaysia are also seeking to develop their
capability.
Ernst & Young, in their recent Global Biotechnology Report, make some observations
on key global drivers.
“Globalisation is being driven by: bio-tech and large pharmaceutical firms looking for broader
markets and for the best R&D partners; companies listing on multiple stock exchanges to
expand their investor base; venture capitalists looking for new opportunities; university
researchers collaborating internationally; and governments pursuing development strategies
based on innovation in biotechnology.”
Source: Beyond Borders Global Biotechnology Report. Ernst & Young. 2003 P 6
4.2
Size of the Industry
US companies dominate account for 73% of global revenue for publicly listed companies in
the sector.
Table 2 is derived from the Ernst & Young Global Biotechnology Report 2003 and
provides data on the global commercial biotechnology industry. The definition used by
Ernst & Young for a biotechnology company is that of a “core biotechnology” company
– ie a company with a major focus in biotechnology, or deriving the major proportion of
revenue from biotechnology. The report highlights a number of key characteristics.
 Total revenue of publicly listed core biotechnology companies globally was estimated at
$63 aud billion in 2002.
 Approximately 194,000 people were employed in these companies.
 Total R&D expenditure per year for these companies was $33.8 aud billion or over 50%
of total revenue.
22
Geelong Biotechnology Opportunities Study
 US companies account for 74% of global corporate spending on R&D, Europe accounts
for 23%, and Canada accounts for 2.5%. The Asia/Pacific region accounts for only 1%
of world R&D spending.
 The US dominates the sector accounting for 75% of employment.
 In the Asia-Pacific, Australia is seen as having the most advanced biotechnology sector.
There were 601 companies are in the Asia/Pacific region, with Australian companies
(190) accounting for approximately half of the total Asia/Pacific revenue.7
 Total global expenditure of biotechnology firms is estimated at $82.8 aud billion (on total
revenues of $63.6 aud billion), generating a net loss of $19.2 aud billion. This net loss
is about 30% of global revenues.8
 R&D spending increased by 34% between 2001 and 2002.
Table 2. The Global Biotechnology Industry – 2002
Global
USA
Europe
Canada
Asia/Pacific
Public Company data
Revenues ($m aud*)
63,645
46,563
12,711
2,255
R&D expenditure ($m aud*)
33,865
25,034
7,675
854
Net loss ($m aud*)
19,205
14,428
4,251
405
Number of employees
193,753
142,900
33,304
7,785
Number of Companies
Public Companies
613
318
102
85
Private Companies
3,749
1,148
1,776
332
Total companies
4,362
1,466
1,878
417
Company location by Region %
100%
33.6%
43.1%
9.6%
Source: Derived from Beyond Borders Global Biotechnology Report. Ernst & Young. 2003 (*
based on exchange rate - $1Aud= $0.65 US)
4.3
Growth of Networks and Alliances
The E&Y report suggests that the industry is maturing and moving toward an alliance
network of specialty companies. This reflects the need for large companies to acquire
new IP and for emerging companies to secure funding. This is similar to the pattern of
development in the ICT sector.
“A company does not have to do everything, does not have to be a mini-pharmaceutical
company to be successful and profitable. But it does have to focus on an area that is
essential for bringing products to market, such as analytical instruments, target and
compound discovery plus validation, pharmocogenomics and toxicity, regulatory affairs and
clinical trials or manufacturing.”
“By refocusing on what they do best, biotech companies can build networks of alliances
through which each player contributes to the end product and shares in the revenues. They
can generate profit making activities to support other activities. Setting up a company that
will not report earnings for 10 to 15 years was a business model for the 20th century not the
21st Century.
Source: Beyond Borders Global Biotechnology Report. Ernst & Young. 2003 P 5
7
Australian Biotechnology Report. Ernst & Young and Freehills. 2001.
This reflects the high levels of expenditure necessary to establish research facilities support R&D and
product development and the significant costs involved in gaining regulatory approval; and the early market
stages of many companies, where most are in the research and development phase and do not have current
product or technology offerings.
8
23
2,115
303
122
9,764
108
493
601
13.8%
Geelong Biotechnology Opportunities Study
5 Biotechnology in Australia
5.1
Industry Structure
The following diagram summarises the structure of the biotechnology sector in
Australia and the various interaction points between government, research
organisations and companies.
The sector is made up of a growing number of participants operating in a diverse range
of research areas.
Research strengths of Australia’s biotechnology are in the following fields: agricultural
biotechnology, proteomics, stem cells, bioinformatics, human therapeutics, particularly
drug discovery, medical devices and diagnostics.
Basic research, development of new technologies and the application of biotechnology
is undertaken by private and public companies, universities, CRCs and not for profit
research institutes. Appendix 4 contains information on public sector research and
development.
Chart 1.
Public and Private Sector Biotechnology Linkages
24
Geelong Biotechnology Opportunities Study
5.2
Public Sector Research
Australia has developed a strong public sector research base in biotechnology and
related fields – that includes health and medical applications, agriculture and
environmental sciences. The main contributors to Australia’s primary research output
are CSIRO, universities, research institutes, government funded research facilities and
cooperative research centres.
These public research facilities are the major employers of postgraduate and graduate
researchers and support staff.
They have also been the source of much of the technologies under commercial
development, through spin-off companies, licensed technologies and joint R&D activity.
Research funding support is provided through a range of national competitive grants
and through special programs implemented by State Governments.
5.3
Australian Biotechnology Companies
The business component of the biotechnology sector has the following characteristics:
 In 2001 there were around 190 companies in Australia mainly engaged in biotechnology
activities (core biotech companies) and another 490 engaged in related activities.
 The biotech sector is significant and expanding in Australia. Turnover of core Australian
biotech companies was estimated at over $1 billion per annum in 2000-01.
Australian universities contribute 20% of biotechnology business innovation. 9
5.3.1
Core Biotechnology Companies
The concept of a “core biotech” company is used to define the industry in this report. A
company is defined as “core biotech”, if the major focus or source of revenue is
biotechnology. In 2001 there were 190 core public and private companies in Australia,
of which 72 (38%) were located in Victoria.
Table 3. Core Biotechnology Companies 2001
State
Number of registered
% Share
companies
Victoria
72
38
New South Wales
58
30
Queensland
22
11
South Australia
15
8
Western Australia
17
9
NT, ACT and Tasmania
6
3
Totals
190
100
Source: Australian Biotechnology Report. Ernst & Young and Freehills. 2001.
9
Australian Biotechnology Report. Ernst & Young and Freehills. 2001
25
Geelong Biotechnology Opportunities Study
Hopper and Thorburn (2003)10 provide estimates of the number of firms and the pattern
of growth over 20 years. They come up with some higher estimates, and their data
show that the number of core biotechnology Australian companies has increased from
190 in 2001 to over 300 in 2002. A further 400 companies and agencies (national and
state) have an active role in the commercial development of Australian biotechnology.
Growth has continued with more than 30 new companies being formed in 2001–02. Of
these around 40% were spin-offs from research institutions and a further 25% were
from the business sector.
The Australian biotechnology companies can be divided into three groups:
 The largest three companies - CSL, Resmed and Cochlear, which are all global
businesses, with comparatively stable levels of business and significant market
capitalisations of around $2 billion.
 Medium enterprises and other larger companies that are valued at up to $500 million.
These companies have been established for some years and have products under
development that may be funded by other research and manufacturing.
 A large number of SMEs and small start-up companies.
 Victoria has consistently accounted for around 35-40% of core biotechnology
companies.
'In the three-year period from 2000 to 2002, 68 new biotechnology firms were formed in
Victoria. These comprised over 38% of new core biotechnology start-ups nationally. The
State with the next highest number of start-ups was NSW (41 new firms, or 23%) followed by
Queensland with 34 new firms (19%).'
Source: Victorian Biotechnology Industry Report September 2003 Thorburn & Hopper P9
Chart 2.
10
Number of Biotechnology Companies in Australia
Victorian Biotechnology Industry Report September 2003 Thorburn & Hopper P9
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Geelong Biotechnology Opportunities Study
Most of Victoria's core biotechnology start-ups are in human therapeutics, diagnostics
products and services. The focus has been on a range of human diseases, including
cardiovascular, cancer, infectious and auto-immune diseases.
The next largest group is engaged in the development and supply of platform
technology (growth factor mimetics, chiral-based products and animal models).
Agricultural firms have been focused on seed technologies and commercial plant
genome services.11
In their 2003 Report Thorburn and Hopper use a different classification – core
biotechnology firms and diversified biotechnology firms.
"Core biotechnology firms have been established to exploit biotechnology processes to
develop goods and services. These companies are mostly small, young and heavily
dependent on public sector R&D.
Diversified biotechnology firms are those that are primarily involved in other technologies
and markets but that may derive a proportion of their income from biotechnology. Most of the
larger pharmaceutical and agricultural companies that have some involvement in
biotechnology would be classified as "diversified" in this report..."
Source: Victorian Biotechnology Industry Report September 2003 Thorburn & Hopper P33
Using this classification, the following table shows the number of firms in each category
by State. Victoria accounts for 40% of companies and for 40% of the new firms created
in the three years - 2000-2003.
Table 4. Biotechnology Companies by State 2002
11
Victorian Biotechnology Industry Report September 2003 Thorburn & Hopper P9
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Geelong Biotechnology Opportunities Study
5.3.2
Publicly Listed Biotechnology Companies
The majority of companies involved in biotechnology in 2001 were private unlisted
companies. Table 4 hows a state breakdown of the listed core biotechnology
companies.
Research by Deloitte, estimates that there were 53 publicly listed core biotechnology
companies in Australia in 2001 with 21 (40%) in Victoria.
The total value of these Victorian companies, measured by market capitalisation in
2001 was $7.5 billion, representing 52% of the total value of core biotechnology
companies in Australia. CSL, Australia’s largest biotechnology company, is located in
Victoria and accounts for a significant proportion of the market capitalisation value.
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Geelong Biotechnology Opportunities Study
6 Biotechnology in Victoria
6.1
Overview
This section analyses biotechnology in Victoria. It covers both public sector research
and an analysis of private companies.
Table 5 analyses the activities of the 181 Victorian organisations involved in
biotechnology.
 Medical research is the major area of operations with 105 organisations (58%) involved
in this field.
 Plant research is major focus with 31 organisations (17%).
Twenty-seven organisations are classified under the “other” category, which covers
organisations working in fields such as environmental engineering, cosmetics and
chemicals.
"Victoria’s biotechnology industry strengths lie in human therapeutics, followed by
diagnostics and agricultural biotechnology. Specialist expertise includes: clinical trials,
immunology, neuroscience, stem cells, diabetes, oncology, agricultural, horticulture and food
and animal sciences."
Source: Victorian Biotechnology Industry Report September 2003 Thorburn & Hopper P16
Table 5. Victorian Biotechnology Organisations by Research Field
Medical
Plant
Animal
Biotech organisation
research
research
research
Core organisations
Cooperative Research
4
1
1
Centres12
Research
31
5
6
organisations13
Companies14
Core
45
8
5
25
Non-Core
17
6
Total
105
31
18
Source: Buchan Analysis of Various Reports
Other
Total
1
7
3
45
7
16
27
65
64
181
12Co-operative
Research Centre Compendium 2002. Department of Education, Science and Training
Acuity Technology Management. An industry training plan for the delivery of training in biotechnology,
2003. A Report for Box Hill TAFE.
13
14
Biotechnology Strategic Plan for Victoria, 2001 Page 21
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Geelong Biotechnology Opportunities Study
6.2
Public Research Organisations
6.2.1
Research Institutes
Victoria specialises in medical related research, with almost 70% of public research
organisations involved in this field.
Table 6 lists the 45 not-for-profit institutes in Victoria. These comprise universities,
research institutes and organisations, such as the CSIRO. Other activities include
animal and plant research, reflecting Victoria’s agricultural specialisation.
Table 6. Not for Profit Research Institutes in Victoria – 2003.
Research Institutes
Medical
research
Plant
research
Animal
research
Other
GROUP 1 “CORE” ORGANISATIONS
Australian Research Institute
X
Australian Genome Research Facility
X
Baker Heart Research Institute
X
Bernard O'Brien Institute for Microsurgery
X
Bionic Ear Institute
X
Bio21
X
Brain Research Institute
X
Brain Sciences Institute
X
Centre for Animal Biotechnology
X
Center for Developmental Cancer Therapeutics
X
Centre for Environmental Stress and Accreditation
X
Centre for Equine Virology
X
Centre for Molecular Biology and Medicine
X
CSIRO for Animal Health Laboratories
X
CSIRO Health Science and Nutrition
X
CSIRO Molecular Sciences
X
Genomic Disorders Research Institute
X
Howard Florey Institute for Experimental Physiology
X
and Medicine
International Diabetes Institute
X
Joint Centre for Crop Improvement
X
Ludwig Institute for Cancer Research
X
Macfarlane Burnet Institute for Medical Research
X
Mental Health Research Institute
X
Monash Institute for Health
X
Monash Institute for Reproduction and Development
X
Monash Centre for Biomedicine
X
Murdoch Children’s Research Institute
X
National Ageing Institute
X
Peter MacCallum Cancer Institute
X
Institute for Animal Science (DNRE)
X
Plant Biotechnology Centre (DNRE)
X
Rutherglen Research Institute (DNRE)
X
Plant Cell Biotechnology Research Centre
X
Prince Henry's Institute of Medical Research
X
St Vincents Institute for Medical Research
X
Swinburne Centre for Biomedical Instrumentation
X
Victoria Institute of Biotechnology
X
Victoria Institute for Dryland Agriculture
X
Walter and Eliza Hall Institute of Medical Research
X
TOTAL
31
5
6
3
Source: Acuity Technology Management. An Industry Training Plan for the Delivery of
Training in Biotechnology, January 2003. A Report for Box Hill TAFE.
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Geelong Biotechnology Opportunities Study
6.2.2
Cooperative Research Centres
Table 7 shows funding levels for the Victorian based CRCs involved in biotechnology.
The funding provided by the Australian Government for CRCs is for a seven year
period. For example, the CRC for Micro technology receives $2.5 million in funding
annually and $17.4 million over the lifetime of the project.
In total, funding for the biotechnology CRCs currently operating in Victoria is estimated
at $116.7 million (over the 7 year funding period).
CRC
Table 7. Program Funding for Victorian Based CRCs in Biotechnology 2002
Average funding
PA $mill
Total program
funding (7 years)
$mill
CRC for Micro technology
2.5
17.4
CRC for Bioproducts
2.0
13.7
CRC for Innovative Dairy Products
2.4
17.0
CRC for Cellular Growth Factors
2.4
16.8
CRC for Chronic Inflammatory Diseases
3.5
24.6
CRC for Cochlear Implant and Hearing Aid Innovation
2.0
14.2
CRC for Discovery of Genes for Common Human Diseases
2.2
13.1
Total CRC funding
17.1
116.7
Source: Derived from Co-operative Research Centre Compendium 2002.
Department of Education, Science and Training.
6.3
Clinical Trials
There is a significant level of trials conducted in Australia and Victoria is well suited to
clinical trials. This arises, in part from the existence of an ethnically heterogeneous
population, and seven high quality teaching hospitals. It is also influenced by
acceptance of regulatory standards in the US and EU due to common standards of
medical practice.15 Costs to conduct trials (Phase I to IV) in Australia are below costs in
the United States.
The Victorian Government has recently provided $8 million for the establishment of
Clinical Trials Victoria (CTV), a clinical trial support organisation.
In March 2003, four Victorian research institutes were recognised as Centres of Clinical
Research Excellence. These are:
 The University of Melbourne’s Centre for Clinical Research Excellence in Infectious
Diseases
 The Jean Hailes Foundation Centre for Clinical Research Excellence for the Study of
Women’s Health
 The Alfred and Baker Medical Unit Centre for Clinical Cardiovascular Research
 The Alfred/Monash Centre for Therapeutics and Clinical Research
Barwon Health in Geelong is involved in a substantial number of trials funded by the
major pharmaceutical companies.
15
Victorian Biotechnology Industry Report September 2003 Thorburn & Hopper P17
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Geelong Biotechnology Opportunities Study
6.4
Biotechnology Companies
Victoria has experienced growth in the number of companies that make up the
biotechnology sector.
6.4.1
Core Companies
Biotechnology by its nature has an enabling impact on many industry sectors. In the
analysis below, we use the definition used in the BioAccent Report (June 2002)
prepared for the Victorian Government. Biotechnology companies were divided into:
Dedicated biotechnology companies – Group 1 (core) and Companies that undertake
significant biotechnology activity within a broader spectrum of operations, or are
working in closely related areas of bioscience – Group 2.
The major focus of core biotech companies in Victoria is related to pharmaceuticals,
with 25 companies operating in this area. Many of these companies have grown out of
the State’s strong medical research specialisation and some are spin-offs from
research institutes.
Table 8. Group 1 Core Victorian Biotech Companies by Area of Operation 2001
Group 1 Victorian Companies – by area of operation
Sector
Number of Firms
Pharmaceuticals
25
Diagnostic (human)
4
Tissue and Cell Repair
5
Genetic Testing
4
Diagnostic (various)
5
Platform Technologies (several sectors)
4
Veterinary Therapeutics
5
Agriculture/Food
7
Reproductive Technologies
2
Producers of Biologicals
9
Other
7
Total
77
Source: Biotechnology Strategic Development Plan for the Department of Science
Technology and Innovation 2001.
32
Geelong Biotechnology Opportunities Study
Table 9 lists the Group 1 companies by area of operation.
Table 9. Group 1 Victorian Biotech Companies by Area of Operation 2001
Area of Operation
Companies
Pharmaceuticals – 25 companies
AMRAD Corporation Limited, Anadis Limited, Analytica Ltd,
Arthron Limited PL, Aus Bio Limited, ATG Limited, Avax
Australia PL, Biomolecular Research Institute, Bioproperties
(Australia) PL, Biota Holdings Limited, Cervax Pty Limited,
Circadian Technologies PL, CSL Limited, Cytopia PL,
ExGenix Ltd, Ilexus PL, McFarlane Laboratories Ltd,
Metabolic Pharmaceuticals Ltd, MuriGen PL, Pharma Pacific
PL, Prana Biotechnology Ltd, Virax Holdings Limited, Syngene
Ltd, Thrombogenix PL, Starpharma Pooled Development
Limited
Diagnostics (human) – 4 companies
Mabtech Limited, Thrombogenix Pty Limited, Syngene Ltd,
Ilexus PL
Tissue and Cell Engineering – 5
Bio Nova International PL, Mercy Tissue Engineering Ltd, ES
companies
Cell Australia Ltd, Stem Cell Sciences Limited, Ilexus PL
Genetic Testing – 4 companies
GeneScan Australia PL, Genetic Technologies Ltd, GeneType
PL, Simons GeneType Diagnostics PL
Diagnostics (various) – 5 companies
Checkmeat, Trace Scientific Limited, Epitope Technologies
PL, Prostate & Diagnostics PL, Pulmosonix PL
Platform Technologies (several
Copyrat PL, Tridan Limited, Ingenix PL, Vaccine Technologies
sectors) – 4 companies
PL
Veterinary Therapeutics – 5
Alpharma Animal Health PL, Intervet Australia Pty Limited,
companies
Bioproperties (Australia) PL, CSL Limited, Vet Biosearch PL
Agriculture / Food – 7 companies
Access Genetics PL, Hexima Limited, Checkmeat Cognis
Australia PL, Nugrain PL, Florigene Limited, Seed Grain
Biotechnology Australia PL
Reproductive Technologies – 2
Genetics Australia Cooperative PL, Monash Reproductive
companies
Pathology and Genetics PL
Producer of Biologicals – 9
Auspep PL, CSL Limited, Mimotopes PL, Moregate Exports
companies
PL, Natraherbal PL, Nerang Biotechnology PL, Silenus Labs
PL, Tocovite PL, Trace Scientific Limited
Other – 7 companies
Biomed Investments Limited, EpiTan Limited, Pelston PL,
Clean TeQ PL, Tocovite PL, Trace Scientific Limited, Silenus
Labs PL
Source: Victorian Biotechnology Directory 2003. Advance Consulting & Evaluation and Aoris
Nova for the Department of Innovation, Industry and Regional Development. May 2003.
The focus of research in Victoria differs from that of the rest of Australia. The chart
below compares the research focus of Group 1 Biotech companies for Victoria and
Australia.
Victoria’s major strength is in research related to health.
 Compared to the Australian average, the proportion of R&D in health is significantly
higher. In Victoria 54% of companies are involved in health, compared to 38% for
Australia as a whole.
 Victoria also has double the number of companies involved in biological activities,
compared to the whole of Australia, with levels of 13% and 6% respectively.
 The State is marginally under-represented in agriculture and food. This reflects the
number of companies that have developed around agricultural and viticulture industries
in New South Wales and South Australia.
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Geelong Biotechnology Opportunities Study
Chart 3.
The Major Focus of Biotech Companies in Australia and Victoria – 2001
Major focus of group 1 biotech companies in
Victoria and Australia
60
50
Victoria
40
Australia
% 30
20
10
io
lo
gi
ca
ls
B
ic
G
en
et
H
ea
lth
te
st
in
g
od
g/
Fo
A
S
O
th
ev
er
er
al
se
ct
io
ns
E
nv
iro
nm
en
ta
l
V
et
er
in
ar
y
0
Source: Biotechnology Strategic Development Plan. The Department of Science
Technology and Innovation 2001
6.4.2
Group 2 Companies
There are many companies that have significant life science involvement as part of
their spectrum of activity, or are operating in related areas.
Typically they include companies involved in the development of bioscience
instrumentation, biomaterials, chemistry, pharmaceuticals or medicine, and are defined
as Group 2 (Non Core) companies.
The Group 2 companies are generally larger than the core companies. There were 70
Group 2 companies operating in Victoria in 2001: pharmaceuticals – 21; biologicals,
nutraceuticals and complementary medicines – 12; and agriculture/food – 13.
Table 10. Group 2 (Non-core) Victorian Biotech Companies by Area of Operation
Group 2 Victorian Companies – by area of operation
Sector
Number of Firms
Pharmaceuticals
21
Biologicals, Nutraceuticals, Complementary Medicines
12
In vitro Fertilisation (Health)
2
Equipment
9
Veterinary Therapeutics
2
Agriculture/Food
13
Environmental
3
Other
8
Total
70
Source: Biotechnology Strategic Development Plan for the Department of Science Technology
and Innovation 2001.
34
Geelong Biotechnology Opportunities Study
Table 11. Group 2 or Non-core Victorian Biotech Companies by Area of Operations
Area of Operation
Companies
Pharmaceuticals – 21 companies
Biologicals, Nutraceuticals,
Complementary Medicines – 12
companies
In vitro Fertilisation (Health) – 2
companies
Equipment – 9 companies
Veterinary Therapeutics – 2
companies
Agriculture / Food – 13 companies
Environmentals – 3 companies
Other – 8 companies
Acrux Limited, Bioactive Enhancement Technologies Aust. PL,
Bristol-Myers Squibb Australia PL, ClinTrials Research PL,
Compumedics Sleep PL, Faulding Pharmaceuticals, Felton
Grimwade & Bickford PL, GlaxoSmithKline(GSK) Australia,
Institute of Drug Technology Australia Limited, Kryocor PL,
Vitapharm Research PL, Medical Industrial Group PL, Mondo
Medical Ltd, Norwood Abbey Ltd, Optiscan Imaging Limited,
PharmAction Holdings Ltd, P.P.D. Development PL, Sigma
Pharmaceuticals PL, Solagran Limited, Soltec Research PL,
Vita Life Sciences Limited
Australian Botanical Products PL, Bonlac Foods Limited,
Corryong Essential Oils PL, Felton Grimwade & Bickford PL,
Herbworx Corporation PL, Marine Biotechnology International
PL, Nutrition Care Pharmaceuticals, R P Scherer Holdings PL,
Solagran Limited, VicMint Partners PL, Vita Life Sciences
Limited, Vitapharm Research PL
Melbourne IVF PL, Monash IVF PL
Axon Instruments, Inc., Biotechnic PL, Compumedics Sleep
PL, G.B.C. ScientificEquipment PL, Grale Scientific PL,
Optiscan Imaging Limited, Vision Instruments Limited, Vita Life
Sciences Limited
Jurox PL, Vitapharm Research PL
Ag-Seed Research PL, Aventis Cropscience PL, Bioplasma
Australia PL
Boulevarde Nurseries Mildura PL, Brewtech PL, Halcyon
Proteins PL, Henderson Seed Group PL, Micronized Foods PL,
Monsanto Australia Limited, Nufarm Limited, Nutrihealth PL,
Valley Seeds PL, Yakult Australia PL
EcoEarth Technologies, Rio Tinto Limited, Environmental
Biotech (Systems) PL
Albright & Wilson (Australia) Ltd, Applied Chemicals PL,
Australian Ocean Biotechnology, EMI Consulting Services PL,
Microtech Laboratories PL, Monne International PL,
Perseverance Corporation Limited, Vacctech Limited
Source: Victorian Biotechnology Directory 2003. Advance Consulting & Evaluation and Aoris
Nova for the Department of Innovation, Industry and Regional Development. May 2003. It should
be noted that some companies operate in more than one area.
35
Geelong Biotechnology Opportunities Study
7 Support for Biotechnology in Australia
Biotechnology is a major policy priority for governments in Australia.
7.1
Policy Overview
The biotechnology sector has been a major focus for governments over the last five
years, and is reflected in a major expansion of government funding.
The key focus is on encouraging research, product and process development,
commercialisation, and the development of international partnerships.
Government policies stem from Australia’s research strengths in biotechnology and a
strategy to develop Australia as a global leader in biotechnology. The sector is
receiving strong support from the Australian government, and the States – particularly
Victoria and Queensland which have been active in funding research and
commercialisation activities 16.
Policies have included:
 Implementation of a National Biotechnology Strategy.
 Expansion of national research assistance and industry development programs
 Development of State strategies, in Victoria, New South Wales, Queensland, South
Australia and Western Australia.
In addition to the substantial Australian Government assistance, individual States and
Territories have also provided significant support to local biotechnology activities.
Initiatives in Victoria, New South Wales, Queensland and South Australia, in particular,
are providing funding for research infrastructure to support biotechnology and are
delivering assistance for product development and commercialisation.
 Victoria — $347 million Biotechnology Strategic Development Plan
 Queensland — $100 million state-sponsored BioCapital venture fund
 New South Wales — $68 million BioFirst initiative
The Australian Government announced another round of innovation funding under
Backing Australia’s Ability 2 on May 6 2004, with biotechnology continuing to receive
substantial funding.
16
Victoria and Queensland have been the most active, with Victoria setting an objective of making the State
the 5th largest biotechnology centre in the world by 2010.
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Geelong Biotechnology Opportunities Study
7.2
Australian Government Support for Biotechnology
7.2.1
Funding for Research
Resources applied to the biotechnology sector are substantial. The Australian Government
provides over $300 million per year to support research and development activity in
biotechnology. When State programs are included, the total government expenditure (R&D
related) is estimated at around $450 million per year, and is increasing.
The Australian Government supports biotechnology activity through research grants
provided to public research organisations.
In 1998-99 a total of $3.2 billion was provided by the Australian Government to support
R&D activity. Of this, an estimated $255 million or 8% was spent on biotechnology.17
Table 12 provides an estimate of funding for biotechnology R&D from the Australian
Government in 2000-01. Total funding for biotechnology R&D was $307 million.
This expenditure has increased, with additional funding provided under the
Government’s Backing Australia’s Ability statement of early 2001 and expanded
funding under the May 2004 Innovation Statement.
This funding relates to support for research and development only and does not cover
support for education (eg. higher education, VET).
 The largest recipients of research funding are universities ($90 million), CSIRO ($47
million) and the National Health and Medical Research Council (NHMRC) ($54 million).
 Funding for CRCs and research funding through the Australian Research Council
(ARC) grants are also significant.
The NHMRC and ARC both allocate research grants on a competitive basis to
universities and research institutes. CRC funding is also allocated on a competitive
basis.
Funding for biotechnology, through the NHMRC, will increase to an estimated $80
million by 2005.
Estimated Australian Government Funding for Biotechnology Research and
Development
Table 12.
Program
1998-99
$million
1999-00
$million
2000-01
$million
Universities
90
90
90
National Health and Medical Research
40
54
54
Council
CSIRO
40
47
47
Cooperative Research Centres
25
28
28
Australian Research Council
35
25
25
R&D Start
15
17
17
Rural R&D Corporations
10
14
14
Pharmaceutical Industry Investment Program
0
2
3
Other
0
19
29
Total
255
296
307
Source: Australian Biotechnology Report. Ernst & Young and Freehills. 2001 Page 11
2000-01
%
29
18
15
9
8
6
5
1
9
100
17
Feasibility Study on Establishment of a National Biotechnology Organisation. A Report by Buchan
Consulting to Biotechnology Australia. 2000.
37
Geelong Biotechnology Opportunities Study
7.2.2
Research and Development Tax Concessions
The Australian Government also provides R&D tax concessions that allow a 125% tax
deduction for research and development expenditures incurred by companies.
In 1998-99, there were a total of 3,200 eligible companies were identified, reporting
total R&D expenditure of $4.3 billion. It is estimated that $88 million was spent on
biological sciences R&D.
In 2000-01 the ICT and engineering sectors continued to dominate the R&D spending
that was receiving support from the R&D tax concession. Each sector has total R&D
spending of around $1.75 billion.
Biotechnology related fields accounted for about $300 million in R&D spending, with
around $150 million for each of medical and health sciences and biological sciences.
Chart 4.
R&D Tax Concession by Research Groups
Source: Mapping Australian Science and Innovation Working Paper Business Innovation
Department of Industry Technology and Resources December 2003 p 94
7.2.3
Major Initiatives
Major national initiatives directed at the biotechnology sector include $46.5 million
Biotechnology Centre of Excellence for Stem Cell and Tissue Repair, and the $40
million Biotechnology Innovation Fund to support research.
7.2.4
Biotechnology Centre of Excellence
The objectives of the Biotechnological Centre of Excellence initiative are to expand
biotechnology research in Australia and to increase the sector’s international
competitiveness.
The National Stem Cell Centre received funding in May 2002 (total funding is $43.5
million over four years). Funds are provided through the Department of Industry,
Tourism and Resources and the Australian Research Council.
The Centre combines Australia's expertise in embryonic and adult stem cell
technology, from both the public and private sectors.
38
Geelong Biotechnology Opportunities Study
The Centre has its central node located in the Monash Biotechnology Strip, with
participating organisations including universities, research institutes and commercial
partners.
7.2.5
Biotechnology Innovation Fund
The Biotechnology Innovation Fund (BIF) has the objective of increasing the rate of
commercialisation of biotechnology research.
The BIF helps to bridge the funding gap that often exists between the initial research
stage of a biotechnology project and the early stage of its commercialisation. At this inbetween stage it can be difficult to obtain funding to prove the viability of a new
concept.
The BIF was established with funding of $20 million under the National Biotechnology
Strategy and was allocated an extra $20 million in the Government’s 2001 Innovation
Statement.
The program is implemented by AusIndustry and runs for three years from 2001 to
2004. To mid 2003, there have been four funding rounds of the program (out of five),
with 139 successful applicants being offered $30 million in funding. In the latest round
of funding, eight Victorian applicants received funding totalling $2 million, out of a
national round that amounted to almost $10 million.
7.3
Victorian Government Policies and Programs
The Victorian Government has the vision of making Victoria one of the top five global
biotechnology locations by 2010. This strategic vision has driven the Government’s
programs and initiatives.
The Victorian Government provides substantial support for the development and
commercialisation of biotechnology research.
Since May 2000 the Victorian Government has committed $900 million to innovation,
with a large share of this going to biotechnology.
By 2005, the Victorian Government will have invested more than $500 million in projects to
strengthen the biotechnology sector, including building leading-edge science infrastructure,
developing dedicated biotechnology precincts and backing the commercialisation of
Victorian biotechnology research.
Biotechnology 2004 Strategic Development Plan for Victoria 2004 Foreword
7.3.1
Biotechnology Strategic Plan
The foundation of the Victorian policies is the Biotechnology Strategic Plan.
The Department of Innovation Industry and Regional Development (IIRD) delivers the
plan through both funding of programs and coordinating with industry, research
organisations, and universities.
Key components of the strategy are: building world class infrastructure, developing the
State’s skills base, fostering a culture of innovation, and positioning Victoria as national
and world leader in science.
39
Geelong Biotechnology Opportunities Study
The 2001 Strategic Plan identifies five action areas to position Victoria as a leading
biotechnology cluster:18
 Developing a biotechnology skill base: building a pool of skilled people in science,
product development and commercialisation.
 Developing Victoria’s research base: providing opportunities for growth in science and
research infrastructure.
 Commercialising Victoria’s biotechnology: developing a culture of innovation and
entrepreneurship where clever research can be successfully taken to market.
 Building our corporate base and marketing our capabilities: encouraging growth of
existing biotechnology companies and investment by local and international firms.
 Providing Government leadership and support: providing leadership to the Victorian
community, and the research and industry sectors to develop biotechnology for the
benefit of Victoria.
These action areas remain current in the new 2004 Strategy, with an increased
emphasis on connectivity19.
7.3.2
Bio21
In 2002, Victoria launched the $400 million biotechnology initiative, Bio21 which, aims
to create a world-leading cluster of medical and scientific research institutes in
Parkville, Melbourne.
The Victorian Government has committed an initial $50 million to this project.
Foundation partners in Bio21 are the University of Melbourne, the Walter and Eliza Hall
Institute and the Royal Melbourne Hospital.
As part of the initiative, the Bio21 Molecular Science and Biotechnology Institute is
being developed as the University of Melbourne's core research and development
facility within the Bio21 Precinct.
Major issues for the Bio21 Institute are: interdisciplinary biotechnology research, and
education and training programs; a strong commitment to the commercialisation of IP;
recognition of ethical, social and environmental concerns; building effective
partnerships between industry and government; and active science communication and
promotion.
The Bio21 Institute includes research and development groups covering biochemistry,
gene technology, proteomics, molecular diagnostics, and a broad range of chemistries.
A major objective is achieving the level of inter-disciplinary convergence that underpins
innovation in most major biotechnology precincts around the world.
Key priorities for the Institute are multi-disciplinary research and development programs
in areas where there are opportunities to develop critical mass, international
competitiveness and commercial outcomes.20
7.3.3
Science Technology and Innovation Fund
The Science, Technology and Innovation (STI) fund is a major initiative that is providing
funding of $310 million over five years to 2005.
Biotechnology is one of the STI priorities, along with information and communications
technologies (ICT), new manufacturing technologies, design, and environment
technologies.
A third round of STI grants commenced in June 2005.
18
Biotechnology Strategic Development Plan for Victoria. Department of State and Regional Development.
2001.
19 Biotechnology 2004 Strategic Development Plan for Victoria 2004, Victorian Government, June 2004
20
Bio21. The Victorian Government Capturing the Opportunity Fact Sheet 2002, www.bio21.org.au
40
Geelong Biotechnology Opportunities Study
7.3.4
Synchrotron
In June 2001, the planned construction of a $157 million synchrotron, at Monash
University’s Clayton campus was announced. Construction works for the Australian
Synchrotron project will commence in 2004-05 (with project management by Major
Projects Victoria).
The Synchrotron is an electron accelerator that acts as an immensely powerful
microscope and is used to examine the molecular structure of material. Studying the
atomic structure of human proteins can assist in the rational development of drugs and
vaccines.
The Synchrotron will assist the development of Victoria and the southeast of
Melbourne, as a key biotechnology and research centre.
7.3.5
Bio21
In 2002, Victoria launched the $400 million biotechnology initiative, Bio21 which, aims
to create a world-leading cluster of medical and scientific research institutes in
Parkville, Melbourne.
The Victorian Government has committed an initial $50 million to this project.
Foundation partners in Bio21 are the University of Melbourne, the Walter and Eliza Hall
Institute and the Royal Melbourne Hospital.
As part of the initiative, the Bio21 Molecular Science and Biotechnology Institute is
being developed as the University of Melbourne's core research and development
facility within the Bio21 Precinct.
Major issues for the Bio21 Institute are: interdisciplinary biotechnology research, and
education and training programs; a strong commitment to the commercialisation of IP;
recognition of ethical, social and environmental concerns; building effective
partnerships between industry and government; and active science communication and
promotion.
The Bio21 Institute includes research and development groups covering biochemistry,
gene technology, proteomics, molecular diagnostics, and a broad range of chemistries.
A major objective is achieving the level of inter-disciplinary convergence that underpins
innovation in most major biotechnology precincts around the world.
Key priorities for the Institute are multi-disciplinary research and development programs
in areas where there are opportunities to develop critical mass, international
competitiveness and commercial outcomes.21
7.3.6
Science Technology and Innovation Fund
The Science, Technology and Innovation (STI) fund is a major initiative that is providing
funding of $310 million over five years to 2005.
Biotechnology is one of the STI priorities, along with information and communications
technologies (ICT), new manufacturing technologies, design, and environment
technologies.
A third round of STI grants commenced in June 2005.
7.3.7
Synchrotron
In June 2001, the planned construction of a $157 million synchrotron, at Monash
University’s Clayton campus was announced. Construction works for the Australian
Synchrotron project will commence in 2004-05 (with project management by Major
Projects Victoria).
The Synchrotron is an electron accelerator that acts as an immensely powerful
microscope and is used to examine the molecular structure of material. Studying the
21
Bio21. The Victorian Government Capturing the Opportunity Fact Sheet 2002, www.bio21.org.au
41
Geelong Biotechnology Opportunities Study
atomic structure of human proteins can assist in the rational development of drugs and
vaccines.
The Synchrotron will assist the development of Victoria and the southeast of
Melbourne, as a key biotechnology and research centre.
42
Geelong Biotechnology Opportunities Study
7.3.8
Funding for Infrastructure
The following table shows some recent examples of infrastructure projects that have
received Victorian Government (including Aquaculture at Deakin). It shows funding of
$73 million for infrastructure.
Table 13.
Funding for Biotechnology Infrastructure 2002
Source: Bioscience to Bioindustry A Role for Local Government in Biotechnology in Victoria,
Aoris Nova January 2004
43
Geelong Biotechnology Opportunities Study
8 Biotechnology Locations in Victoria
8.1
Biotechnology Clusters in Victoria
Biotechnology activities in Victoria are mainly clustered around six key precincts 22
located in central and suburban Melbourne and at Werribee.
These clusters have developed around the universities and the major research
institutes.
Biotechnology companies have also located in and around these precincts. In the case
of the emerging firms this reflects the fact that the spin-off or spinout companies have
their origins in the research institutes and still maintain ongoing connections. These
connections often relate to the use of research facilities, joint research projects or
contract research. Moreover there are recognised benefits of locating in these areas in
terms of access to skilled researchers.
In many cases companies have grown up in these locations and want to maintain a
close proximity to the research facilities.
A model for many small companies is the “virtual firm”, where there is a small core
management staff, with research and other activities out-sourced to research institutes
and other suppliers.
The emergence of technology parks adjacent to Monash and Latrobe University, have
encouraged the location of larger firms across a wide spectrum of activities including
engineering, scientific equipment, information technology and telecommunications.
There are no exclusive biotechnology parks in Victoria. Biotechnology firms tend to be
based in a segment of these broader parks.
The larger pharmaceutical companies have tended to develop on their own sites and
have not been attracted to the university parks.
The combined level of activity in the research clusters is substantial. In total the 6
precincts:
 Employ almost 6000 researchers
 Have annual research funding of almost $450 million
8.2
The Major Precincts
8.2.1 Parkville Precinct
The Parkville precinct is Victoria's largest biotechnology cluster, and is the major focus
for the $400 million Bio21 development. Includes the University of Melbourne, the
Walter and Eliza Hall Institute of Medical Research, the Howard Florey Institute of
Experimental Physiology and Medicine, the Ludwig Institute for Cancer Research, the
Royal Melbourne Hospital
The precinct has advanced research facilities and a major hospital with clinical
research and clinical trials capabilities. There is strong commercialisation focus in this
precinct.
8.2.2 Alfred Medical Research and Education Precinct (AMREP) - Prahran
The Alfred Medical Research and Education Precinct combines Alfred Hospital, the
Baker Heart Research Institute, the MacFarlane Burnet Centre and Monash University
School of Medicine.
22
Victorian Biotechnology Industry Report Thorburn & Hopper September 2003
44
Geelong Biotechnology Opportunities Study
Key strengths of this precinct are research into cardiovascular disease, viruses and
HIV/AIDS.
8.2.3 Monash Health Research Precinct - Clayton
The Monash Health Research Precinct is a biomedical cluster based around Monash
University's Clayton Campus. It is linked to a strong clinical research base, with a major
focus on public health and health services.
The precinct includes: Monash Institute of Reproduction and Development, Monash
Institute of Public Health, Prince Henry's Institute of Medical Research and the
Southern Health Care Network. Biotechnology companies located within this precinct
include Biota Holdings, Mimotopes and Monash IVF.
8.2.4 Werribee Precinct
The Werribee Precinct is principally focused on animal and food research.
Key institutions located in the precinct include: the Victoria University of Technology,
Food Science Australia, the Victorian Institute of Animal Science and the CSIRO
Division of Animal Health.23
8.2.5 Bundoora Precinct
The Bundoora precinct is focused on plant bioscience. Those organisations located in
the area are: La Trobe University, La Trobe R&D Park and RMIT University Bundoora
campus.
A focal point for biotechnology activities on this precinct will be the Bundoora Plant
Biosciences Facility. This will house the Agriculture Victoria’s Plant Biotechnology
Centre, a State Government Research Institute that specialises in plant genetics.
8.2.6 Austin Biomedical Alliance Precinct - Heidelberg
Austin Biomedical Alliance Precinct is located in Heidelberg and is based at the Austin
and Repatriation Medical Centre.
23
See Appendix 3 for more information on the Werribee Precinct.
45
Geelong Biotechnology Opportunities Study
Table 14.
Victorian Biotechnology Precincts
Location
Description
Specialisations
Research Funding
2002/03
Researchers
Parkville –City
precinct
8 hospitals, 11 research institutes, Uni Melbourne RMIT
$200 million
2,000
Alfred Medical
Research and
Education Precinct
Prahran
Monash Health
Research Precinct
Clayton
Werribee Precinct
Research and
Education Precinct
Monash – 2 Research Institutes, 1 hospital
Health & medical cancer, infectious diseases,
neurosciences, diabetes, immunology, cardio
vascular, bioengineering, structural biology
Cardiovascular disease, viruses and HIV/AIDS,
Immunology
$35 million
500
Monash Medical Centre, Monash Uni, CSIRO
Health , IVF, Stem Cells, Diabetes, virology,
cancer, neurosciences
$70 million
900
Uni of Melbourne, Victoria Uni, 5 research institutes –
Agrifood Technology, CSIRO Animal Health, Food
Science Australia, Victorian Institute of Animal Health,
Victorian Institute of Biotechnology, Australian Food
Industry Science Centre (DPI)
La Trobe and RMIT technology parks, Plant
Biotechnology Centre, Walter and Eliza Hall Institute’s
Biotechnology Centre
Austin & Repatriation Medical Centre (A&RMC)
7 research institutes, University of Melbourne, LaTrobe,
RMIT
Animal and food research
$115 million
775
Plant bioscience
Biomedical, genetics, bioinformatics
na
na
Neurosciences, immunology, cancer
$30 million
700
Bundoora Precinct
Austin Biomedical
Alliance Precinct
Heidelberg
Source: Derived from Invest Victoria Information
46
Geelong Biotechnology Opportunities Study
8.3
Location of Biotechnology Firms
A recent study examined the spatial location of biotechnology firms (including devices
and diagnostics) and major research institutes24. The analysis shows the major
concentrations are in the local government areas of Melbourne, Monash and Yarra.
This largely reflects the size of the biotechnology precincts that are located in each of
these LGAs, and the tendency for companies to cluster around major research centres.
Table 15. Biotechnology Institutes and Companies by Local Government Area
Local Government Area
Research
Companies
Total
Institutes
Melbourne
Yarra
Wyndham
Monash
Hume
Knox
Total
38
7
8
19
59
24
9
33
8
97
31
17
52
8
72
133
207
Source: Derived from data in Bioscience to Bioindustry A Role for Local Government in Biotechnology in
Victoria, Aoris Nova January 2004 Note companies include biotechs and devices and diagnostics.
As we have seen, most of the major research and development institutes in
biotechnology are concentrated in the Cities of Melbourne and Monash. Those
institutes located in regional centres are mainly agriculture related and many are part of
the Victorian Government (Department of Primary Industries).
Chart 5.
Distribution of R&D Centres in Biotechnology
Source: Bioscience to Bioindustry A Role for Local Government in Biotechnology in Victoria,
Aoris Nova January 2004
24
Bioscience to Bioindustry A Role for Local Government in Biotechnology in Victoria , Aoris Nova January
2004
47
Geelong Biotechnology Opportunities Study
9 Biotechnology in Geelong
9.1
Overview of the Sector
This chapter analyses biotechnology activity in the G21 Region. The major research
centres are located in the City of Greater Geelong. (one centre is located in
Queenscliffe).
Biotechnology research and development in Geelong Region is focused in several
areas:
 CSIRO/ Australian Animal Health Laboratories (AAHL)
 Deakin University
 Several Deakin spin-off companies
Pharmaceuticals) and Chirogen
AGT
Biosciences
(now
ChemGenex
 Barwon Health (research centres and clinical trials)
 PIRVic Marine & Freshwater Science (at Queenscliffe)
In total we estimate that the resources devoted to biotechnology/biosciences activity
include around 300 researchers25 and approximately $ 18 million per year in research
funding. Total wages and salaries of researchers are estimated at $15 million .
Education and training is also a major strength for the region:
 Teaching at Deakin in Biological and Chemical Sciences and Ecology and Environment.
 Courses at Gordon Institute for Laboratory Technicians, Environmental Testing and
Pathology.
The following diagram highlights the major segments of the sector in Geelong.
25
There is a total of 100 support staff located in the major research centres. These jobs add to the overall
regional impact of the current centres.
48
Geelong Biotechnology Opportunities Study
Barwon Health
Douglas Hocking Institute
Stem Cells
Clinical & Biomedical
Sciences (Melb Uni) –
Osteoclast Bio
Clinical Trials
Pathcare
Pathology Services
Deakin – Research
University
Metabolic & Gene Discovery
Pharmaceutical Technologies
Agriculture Biotechnology - incl
aquaculture
Commercialisation
AGT Biosciences (ChemGenex
Pharmaceuticals)
Chirogen
Infrastructure
BioDeakin
Laboratory
GTP Building/ development
CSIRO
AAHL
Diseases, Diagnostics,
Vaccines, aquaculture
Geelong
Biotechnology
PIRVic Marine & Freshwater Science
(Queenscliffe)
Marine fisheries sciences
Marine and estuarine ecology
Aquaculture and freshwater fisheries
Education & Training
Deakin
Biological & chemical sciences
Ecology & Environment
Gordon Institute
Laboratory
Environmental Testing
Pathology
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Geelong Biotechnology Opportunities Study
There are over 300 biosciences related researchers in Greater Geelong, with an estimated total annual wages and salaries of $15 million.
Barwon Health
Douglas Hocking Institute Stem
Cells - 7
Clinical & Biomedical Sciences
(Melb Uni) – Osteoclast Bio - 7
Clinical Trials - 40
Pathcare – 230 staff/ 90 science
graduates
Deakin – Research
University
Metabolic & Gene Discovery
Pharmaceutical Technologies
Agriculture Biotechnology - incl
aquaculture
Companies
AGT Biosciences (ChemGenex
Pharmaceuticals) – 40
Chirogen - 12
Infrastructure
Bio Deakin
Laboratories
GTP Building/development
Geelong Biotechnology
Employees - 421
Researchers - 300+
CSIRO
AAHL
Diseases, Diagnostics,
Vaccines, aquaculture
230 staff/ 100 researchers/30
students/visitors
PIRVic Marine & Freshwater Science
(Queenscliffe
Marine fisheries sciences
Marine and estuarine ecology
Aquaculture and freshwater fisheries – 85
staff /65 researchers
Education & Training
Deakin
Biological & chemical
sciences
Ecology & Environment
Gordon Institute
Laboratory
Environmental Testing
Pathology
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Geelong Biotechnology Opportunities Study
9.2
Research Resources
9.2.1 Research Funding
We developed some estimates of annual research funding based on information provided
by each of the organisations.26 The data show that total research funding was $18milion
in 2003.
Table 16. Estimated Annual Biotechnology Related Research Funding in Geelong (2003) $ million
Research Organisation
Institute
Govt Grants Industry/
Investors
Funding $
$
partners $
$
CSIRO
3.0m
3.0m
Deakin (Biotechnology)
4.4m
staff/oncosts etc
Deakin (infrastructure
3.3m
funding)
Total Deakin
7.7m
1
BarwonHealth
AGT Research
1.7m27
5.0m
0.117m
Total AGT
1.82m
Chirogen
R&D Start
0.9m28
0.9m
Vic Govt Biotech Innovation
0.25m
Fund Grant
Total Chirogen
1.15m
0.9m
TOTAL
$7.7m
$5.97m
$8.0m
$0.9m
Total
$
6.0m
4.4m
3.3
7.7m
1.5m
6.7m
0.117m
6.8m
1.8m
0.25m
2.05m
$18.05m
Sources: Based on estimates provided by each institution. Note 1 Barwon total includes
institution funding, clinical trials funding/company research funding (approx $700,000 total) and
government grants.
9.2.2 Researchers
We also obtained information on the number of researchers.
The data show that there are 301 researchers in the research organisations.
additional 120 staff are employed in these organisations in support roles.
An
In addition, Pathcare ( a regional pathology services company based in Geelong), has
230 employees of which 90 are science graduates. We have not included Pathcare staff
in the researcher or support staff numbers.
Based on a conservative average salary figure of $50,000 per person, the 301
researchers account for a total annual wages and salaries bill of $15.05 million.
26
In most cases only total figures were supplied.
Pharmaceutical Partnership Program – up to $8.4 million over five years or 1.7m per year.
28
R&D Start Grant $1.9m over two years.
27
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Geelong Biotechnology Opportunities Study
Table 17. Employment at the Geelong Research Organisations 2004
Research Organisation
Researchers
Other Staff
CSIRO
130
100
Deakin Biotech
Chemgex ( formerly AGT
40
Biosciences
Chirogen
12
BarwonHealth
54
PIRVic Marine & Freshwater
65
20
Science
Total
301
120
Other –Pathcare
230(90
graduates)
9.3
Total
230
40
12
54
85
421
230
CSIRO
9.3.1 CSIRO Geelong
CSIRO's Division of Livestock Industries maintains the Australian Animal Health
Laboratories (AAHL) at Geelong.
AAHL is the only national facility for the diagnosis of exotic diseases that infect animals.
The overall research is driven by the need to safeguard Australia from exotic diseases
and to maintain and grow markets for sheep, cattle, pig and poultry products.
AAHL's research programs are directed toward the development of new diagnostic tests,
vaccines and therapeutics for endemic animal diseases of national importance.
The research is very well-resourced and draws on the collective expertise of a large
research team with an international reputation.
“The Division plays a major role in the maintaining and improving animal health in Australia.
We provide disease surveillance and diagnostic services….
Our scientists are also focusing on protecting livestock from pests and diseases and reducing
the use of antibiotics and other chemicals through breeding for resistance traits, as well as
developing innovative new products and delivery techniques.”
Source: CSIRO Report of Livestock Industries July 2000-June 2003
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Geelong Biotechnology Opportunities Study
9.3.2 Research Priorities
CSIRO AAHL has established three major programs in Diagnostic Sciences, Infectious
Diseases and Food Safety and Vaccines & Therapeutics
Within each of these overarching programs, several projects are under way.
9.3.3 The Diagnostic Sciences Program
The program is involved in diagnosing diseases of national significance to livestock,
aquatic animals and fauna. Research projects include the development and application of
diagnostic tests, the pathogenesis of diseases and the spread and management of
diseases among populations.
The research receives important support from the extensive resources of the Tissue
Culture Unit which maintains more than 120 animal cell lines in its collection.
The program applies elements of virology and serology, pathology, epidemiology,
electron microscopy.
Diagnostic Sciences includes the AAHL Fish Diseases Laboratory which conducts
research on finfish, crustaceans and molluscs of relevance to Australia's aquaculture
industry.
Plans are under discussion at AAHL to establish the Australian Centre for Aquatic Animal
Health. This Centre was identified in the G21 Strategy as one of the lighthouse projects.
A series of feasibility studies on the Centre have been undertaken within CSIRO.
Current and proposed capability covers the major known pathogens of salmon, carp,
pilchards, prawns, oysters and tuna.
9.3.4 The Infectious Diseases and Food Safety Program
The research of this program is broadly directed toward increasing Australia's capacity for
disease control by improving the understanding of viral and bacterial diseases and plantassociated toxins. The five key projects of the program are:
 Avian virology, particularly the characterisation of infectious bursal disease virus that
affects poultry and the development of vaccines and improved diagnostic tests.
 The development of more sensitive diagnostic tests for Johne's disease, a contagious
disease of ruminants that causes intestinal inflammation.
 Protein chemistry and proteomics to identify, purify and characterise proteins of biological
significance.
 Study of plant-associated toxins, from plants or bacteria and fungi, that affect grazing
animals.
 Application of molecular techniques to characterise emerging viruses.
9.3.5 The Vaccines and Therapeutics Program
Research conducted under this program is aimed at improving the health, welfare and
production of Australian livestock by the development of vaccine-based products.
To meet the growing need to avoid the use of antibiotics and chemicals in controlling
disease and promoting animal welfare, new approaches are being employed in the
design of vaccines. These involve, for example, assessment by microarray technology of
the genes expressed during a protective immune response and the study of natural
modulators of the immune system to increase immunity.
Much of the research relates to developing new molecular techniques for application in
the livestock industry, including novel applications of RNA interference (RNAi) technology
to silence specific genes and the development of recombinant vaccines.
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Geelong Biotechnology Opportunities Study
9.4
Deakin Research
9.4.1 A Commitment to Research
Deakin University has a strong commitment to research and a strategic plan to expand its
research activity.
“ To have a vibrant culture of research with a critical mass of researchers associated with each
major discipline providing every student with the experience of being taught by leading
researchers, and to foster internationally competitive research groups in areas of strategic
importance”.
Source Taking Deakin University Forward Deakin’s Strategic Plan 2004 P 6
Deakin has set itself the target of being in the top 15 Australian universities by 2007 as
ranked by research income (in 2002 it was number 20).
Deakin is achieving this through improved targeting of funding bodies, government and
industry and facilitation of commercialisation and entrepreneurial activities.
This approach is also captured in the long term plans for the Waurn Ponds Campus,
which has a focus on biological and health sciences, technology and manufacturing.
Deakin also has a record of achievement in its industry linkage programs.
Geelong Campus at Waurn Ponds
“The Geelong campus at Waurn Ponds will have a strong focus on research and development
and on industry partnerships, particularly in relation to biological and health sciences,
technology and manufacturing. The Deakin University Science and Technology Park, which will
include the Geelong Technology Precinct, will be located at, and be a focal point for, this
campus. On-campus undergraduate and postgraduate teaching and higher degree by research
activities will continue to be conducted here. The campus will house the Centre for Knowledge
Technologies and Online Learning which will focus research in this area, housing the first CRC
to be led by the University, and providing a hub for Deakin’s extensive national and
international online and distance education programs. “
Source: Deakin University Campus Vision Statement P 1
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Geelong Biotechnology Opportunities Study
9.4.2 Research Priorities
Deakin's research has been organised into research priority areas, chosen on the basis
of their capacity to compete successfully for national and international research funding,
to produce high quality research output, and to collaborate with other organisations. The
research specialisations are in:
 Advanced Materials Manufacturing and Performance
 Cell and Organism Bio-Engineering
 Cellular Metabolism in Health and Disease
 Chiral & Molecular Technologies
 Chronic Illness
 Citizenship and Globalisation
 Physical Activity and Nutrition
 Quality Learning
 Social and Mental Health
Biosciences are a high priority, encompassing three areas of specialisation (bolded).
9.4.3 Research Funding
Deakin has been implementing a strategy of increasing its research activity via an active
approach to targeting research funding.
External research income has shown strong growth from only $5million in 1998 to $17.2
million in 2002.29
Chart 6.
29
Deakin University External Research Income 1998-2002
Research income was estimated at $22 million for 2003.
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Geelong Biotechnology Opportunities Study
The major areas of growth have been in Health & Behavioural Sciences, Science &
Technology, and Education.
 Health & Behavioural Sciences and Science & Technology together accounted for $14
million or 82% of research income in 2002.
 In total, 31% of research funding is from national competitive grants and 47% is from
industry and other sources.
 In the case of Science & Technology, 45% of research funding is from national competitive
grants and 37% is from industry and other sources.
Table 18. Deakin Research Income ($) by Category, 2002
Faculty/School
Arts
Communication & Creative Arts
Social & International Studies
Business & Law
Accounting & Finance
Economics
Information Systems
Law
Management & Marketing
Education
Scientific & Development Studies
Social & Cultural Studies
Health & Behavioural Sciences
Health Sciences
Nursing
Psychology
Science & Technology
Architecture & Building
Biological & Chemical Sciences
Ecology & Environment
Engineering & Technology
Information Technology
TOTAL
% Share
National
Competitive
Grants
449,985
71,532
378,453
125,014
20,879
Other Public
Sector Funding
Industry/Other
Funding
364,548
10,000
354,548
54,496
464,137
343,737
120,400
144,594
5,500
Cooperative
Research
Centre Funding
1,278,670
425,269
853,401
324,104
26,379
54,496
53,041
51,094
170,015
31,872
138,143
1,217,005
972,008
47,361
197,636
3,437,711
125,854
1,116,184
1,203,011
868,714
123,948
5,399,730
813,904
656,638
157,266
1,358,696
853,218
407,429
98,049
889,656
74,786
646,120
129,750
39,000
3,481,300
3
1
.
1
139,094
476,100
471,900
4,200
3,969,404
3,341,567
441,062
186,775
2,820,139
23,409
676,705
469,181
1,625,844
25,000
7,874,374
46.2 2
0
.
5
Total
395,278
395,278
395,278
2.3
54,496
53,041
190,188
1,460,019
1,160,410
299,609
6,545,105
5,166,793
895,852
482,460
7,542,784
149,263
1,867,675
2,318,312
3,019,586
187,948
17,150,682
100.0
Source: Deakin University Research Report - Deakin Website Accessed June 2004
Deakin is securing some funds from most of the major national agencies that provide
research funding.
The strength of industry relationships is reflected in the fact that over one third of
research funding ($6.7 million in 2002) is from industry research contracts.
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Geelong Biotechnology Opportunities Study
Table 19.
Research Funds by Funding Body
Funding Body
1998
1999
2000
2001
2002
204,470
30,000
262,652
29,774
43,201
239,952
32,660
193,303
145,468
45,241
25,585
37,917
7,038
112,406
66,000
89,676
273,970
43,568
7,000
32,806
159,000
218,941
1,097,649
513,102
1,360,913
135,760
381,500
709,234
1,277,532
164,905
434,000
32,301
1,280,641
1,626,859
61,087
1,867,372
1,675,663
68,523
32,098
52,816
882,844
Agriculture, Fisheries and Forestry
Dairy R&D Corporation
Fisheries R&D Corporation
Grains R&D Corporation
Grape and Wine R&D Corporation
Land and Water Resources R&D Corporation
Rural Industries R&D Corporation
Australian Research Council
Linkage Grants
Discovery Grants
Research Fellowships
Small Grants
International Researcher Exchange (IREX) Scheme
Health and Aged Care
327,400
Commonwealth AIDS Research Grants
General Practice Evaluation Program
National Health and Medical Research Council
34,141
349,324
22,301
668,749
10,164
577,924
722,005
Research into Drug Abuse Program
37,399
48,261
40,015
19,091
Other-Commonwealth
Aust. Centre for Int. Agricultural Research
244,046
Aust. National Training Authority - VET Research
Centres
Criminology Research Fund
Industry, Science & Resources
Veterans' Affairs: Health and Medical
38,699
Vocational Education Research
8,816
Non-Commonwealth
Clive and Vera Ramaciotti Foundation
Financial Markets for Children Grants
National Heart Foundation of Australia
National Multiple Sclerosis Society of Australia
Total National Competitive Grants
33,204
2,649,674
Local Government
State Government
Other Commonwealth Government
Total Other Public Sector Funding
500
154,776
421,354
576,630
113,705
229,022
231,162
56,720
25,000
2,625
5,751
226,660
22,786
12,000
13,500
3,599,634
102,415
45,000
3,831,372
65,319
45,000
4,853,221
5,399,730
18,750
156,137
204,160
379,047
122,384
1,329,010
608,656
2,060,050
61,510
2,035,819
956,515
3,053,844
15,976
2,397,181
1,068,143
3,481,300
3,585,069
4,411,981
6,683,135
220,038
448,082
4,253,189
201,329
10,345,940
107,484
1,685,413
6,204,878
303,816
14,415,759
834,728
356,511
7,874,374
395,278
17,150,682
Contracts
1,496,709
Grants
2,707,791
Donations, Bequests and Foundations
28,600
93,902
International Funding
156,679
322,795
Total Industry and Other Funding
1,681,988
3,124,488
Total Cooperative Research Centre Funding
TOTAL RESEARCH FUNDING
4,908,292
7,103,169
Source: Research Report 2003 Deakin University
57
Geelong Biotechnology Opportunities Study
Deakin has also been successful in recent years in securing State Government funding
(including a bioscience project and the GTP).
 In 2002 Deakin secured funding of $ 7.7 million under the Victorian Government’s
Science and Technology Innovation scheme. Funding over three years was secured
for three projects: Victorian Centre for Advanced Materials Manufacturing, Sustainable
Aquaculture Systems, and the Mobile Architecture and Built Environment Laboratory.
 In addition, ownership of the former International Fibre Centre Building was transferred
to the University. This facility plus $1.9 million of funding for re-development has
provided the foundation for the development of the Geelong Technology Precinct
(GTP).
9.4.4 Biosciences at Deakin
Cellular Metabolism in Health and Disease
Deakin is a leader in this field of biological sciences. It has a major focus on diabetes,
obesity, anxiety and depression.
The Metabolic Research Unit is a state-of-the-art facility for gene discovery and is
researching new treatment for these diseases.
A team of 40 researchers, led by Professor Greg Collier, has discovered more than 65
genes relating to diabetes and obesity. The research is examining the molecular bases
of these "lifestyle" diseases and the interactions between physical activity and nutrition.
This research will impact on the management of these diseases and future
therapeutics.
These areas of research are of global significance. The lifestyle diseases of diabetes and
obesity are increasing rapidly in the developed world. Anxiety and depression are estimated
to affect 340 million people globally. The economic and social significance of discovery and
development in these areas is large.
Reflecting the international significance of the research, Deakin and the spin-off
company AGT Biosciences (now ChemGenex Pharmaceuticals) is partnering with a
European pharmaceutical company to develop new therapeutic treatments for diabetes
and obesity.
Deakin is also involved in research in functional foods – the development of novel
foods and ingredients that produce health benefits, beyond the delivery of nutrients.
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Geelong Biotechnology Opportunities Study
Chiral and Molecular Technologies
“Chirotechnology is an area which is growing rapidly in academic and commercial
importance. Many compounds exist in ‘left-handed’ and ‘right-handed’ forms where one is
the 3-dimensional mirror image of the other. This ‘handedness’ is the chiral property or
chirality of the molecule. While the two chiral forms of a compound have the same chemical
makeup, in some cases they interact with other compounds and systems in dramatically
different ways: for example one form may have therapeutic value while the other is toxic.
The ability to control the chirality of such molecules during their manufacture is vital, and this
is of great importance to the pharmaceuticals sector as well as in many areas of fine and
agrochemicals.”
Source: Deakin Website Accessed June 2004
Chiral chemicals are important in pharmaceutical manufacturing. About 80% of all new
products in development, from anti-cancer drugs, through antibiotics to cold and flu
remedies, are chiral chemicals.
The international market for chiral intermediates is estimated at about $80 billion a
year. Further strong growth is predicted, with forecasts of a market demand valued at
$138 billion in 2010.30
Chirotechnology has applications in the development of drugs, insecticides and
biodegradable plastics. The Chiral and Molecular Technologies Centre is led by
Professor Dainis Dakternieks.
Research is funded by the ARC and by industry. International collaborations are in
place with researchers at universities in Australia, England, Germany and the United
States.
“The free radical chiral technology being developed at Deakin enables the manufacture of
new chemical compounds carrying the characteristics that are required for a specific
pharmaceutical purpose, leaving out harmful, unwanted side effects. The process reduces
waste produced in existing technologies and the outcome is a product with greater purity
and effectiveness, yielding significant efficiencies and cost savings for industry.
Recent American Food and Drug Administration guidelines have effectively determined that
mixtures of chiral compounds can no longer be brought to the pharmaceuticals market
place. For new pharmaceuticals each chiral form must be pure and separately assessed for
registration. Making products with a single pure chiral form is the basis of the new multibillion dollar chirotechnology industry. In 1992 chiral pharmaceuticals alone were estimated
to have a market value of US$18 billion. This had increased to US$73 billion by 1997.”
Source: Deakin Website Accessed June 2004
30
BiDeakin Website Accessed June 2004
59
Geelong Biotechnology Opportunities Study
Cellular and Molecular Biology
Deakin's Centre for Cellular and Molecular Biology (located at the Burwood Campus),
is involved in research on the effects of heavy metals (copper, zinc, chromium and
arsenic) on biological systems.
The Centre is investigating copper-related diseases including Menkes disease and
Wilson’s disease. This research will also assist in the understanding the development
of Alzheimer's disease and some motor neurone diseases. New cancer research is
also being undertaken for leukaemia and breast cancer.
Cell and Organism Bio-engineering
The Cell and Organism Bioengineering (COBE) group uses recombinant DNA
methodology combined with advanced biochemical, cellular and genetic techniques to
engineer cells and organisms. It is focused on major applications in agricultural and
environmental technologies.
There are several internal and external collaborations.
 In the Faculty of Science and Technology, biotechnological and molecular biological
research is linked to work in chiral and molecular technologies and with aquaculture.
 There are links with nutrition and health researchers in the Faculty of Health and
Behavioural Science.
 External collaborations exist with Botany and Genetics at the University of Melbourne,
the Ludwig Institute for Cancer Research, and the Murdoch Children's Research
Institute.
 Researchers also have national and international links.
 Industry links exist via research project funding.
9.5
BioDeakin
Deakin University has been developing its biotechnology and biosciences activity and is
commercialising its research through two spin-off companies.
During 2003, a review examining biotechnology and biosciences across the Geelong,
Warrnambool and Burwood campuses was undertaken by Dr Andrew Parratt. This
review led to the formation of BioDeakin, a whole-of-university vehicle for coordinating
future development including research linkages, research funding and
commercialisation.
BioDeakin will be an important vehicle for future development and cooperation with
other researchers in Geelong and elsewhere, covering areas including biomedical,
biological sciences, plant and aquatic biology, and bioprocessing.
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Geelong Biotechnology Opportunities Study
“ BioDeakin - a new whole-of-university initiative, created to advance scholarship, research
and teaching across a range of applied biotechnology areas. This multi-disciplinary grouping
of scientists encompasses the University's strengths in bio-medical and bio-health sciences,
plant and aquatic biology, biotechnology, bio-processing, biotech management, bioinformatics and bio-ethics. The goal is to generate and transform knowledge from
biotechnology into practical solutions, which will advance health, social, environmental and
economic development.”
Source: BioDeakin Website (Accessed June 2004)
From a marketing and research perspective, BioDeakin brings together more than 60
researchers and facilities at the three campuses – Melbourne, Geelong and
Warrnambool.
9.6
ChemGenex Pharmaceuticals
“ChemGenex Pharmaceuticals is a genomics-driven pharmaceutical development company
dedicated to improving the lives of patients by developing novel protein, antibody and small
molecule therapeutics in the areas of oncology, obesity, diabetes and central nervous
system disorders.”
Source: ChemGenex Website (Accessed June 2004)
ChemGenex (formerly AGT Biosciences Ltd) is a publicly listed biotechnology company
focused on gene and protein discovery and validation. It is a successful spin-off
company from Deakin.
AGT Biosciences recently merged with US firm ChemGenex Therapeutics Inc and will
maintain operations in California, Texas and Geelong. The new firm is focused on the
development of novel small molecule therapeutics for the treatment of cancer and
related conditions.
The company has a strong competitive advantage in the metabolic diseases, diabetes
and obesity, and now has cancer leads in Phase II clinical trials.
Commercial arrangements have been set up with Merck-Sante, Sequenom and
Kyokuto Pharmaceutical Industrial Co in relation to diabetes and obesity.
The company’s eXpress Technology Platform is an integrated suite of technologies
leading from humans and animal models of disease through to validation of protein
targets. It is high technology in terms of equipment and incorporates considerable
application of bioinformatics.
The company generates some revenue from a contract service for validation of target
genes.
9.7
Chirogen
A long term research program in chirals between Deakin and the University of
Melbourne led to the establishment of Chirogen, a private spin-off company.
The company has been established to commercialise the technologies developed in
Deakins’s Chiral and Molecular Technologies Centre 31. It is involved in commercialising
technology for the synthesis of single enantiomer compounds for the pharmaceutical
industry.
31
See Section 9.4.4 for details of the Centre.
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Geelong Biotechnology Opportunities Study
9.8
Barwon Health
Barwon Health operates a range of hospitals (including Geelong Hospital), clinics and
health centres in Geelong and South West Victoria.
Geelong Hospital is a teaching hospital of the University of Melbourne (Chairs in
Medicine and Surgery) and Deakin University (Chair of Nursing and Health).
Barwon Health has research strengths in biotechnology, epidemiology and clinical
trials, with most of this research based at Geelong Hospital.
Key interests in laboratory research are the molecular and clinical aspects of bone
resorption, markers of thyroid disease and stem cell growth, differentiation and gene
expression.
9.8.1 Clinical Trials
Clinical trials are a major component of Barwon Health's research output. The Annual
Report 2002/03 states that the Human Ethics and Research Committee received 92
applications in relation to trials. At any one time there are large numbers of trials being
conducted.
In recent years the number of clinical trials has stabilised while the number of
investigator-initiated projects is increasing.
The major research areas are oncology, cardiology and clinical and biomedical
sciences.
9.8.2 Osteoclast Cell Biology
Professor Geoffrey Nicholson is the research leader in this field.
This Geelong laboratory is one of the leaders in the world in the study of osteoclasts,
the cells responsible for resorbing bone by demineralisation. The research ties in with
the Geelong Osteoporosis Study, a major epidemiological study of 1,600 females
(which is being extended to include 1,600 males), the results of which formed the basis
of the Australian National Bone Density Range.
Activities include basic research and projects in primary healthcare, such as the effect
of Vitamin D treatment (by general practitioners) of older women on the prevention of
falls and fractures.
9.8.3 Douglas Hocking Research Institute
A major research activity currently at the Douglas Hocking Research Institute is the
study of conditions required for the growth and differentiation of stem cells derived from
cord blood and the bone marrow of orthopaedic patients. The stem cell research
includes application of a technique of re-programming cells by introducing the
cytoplasm of other cells. Researchers have discovered novel genes expressed in stem
cells.
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9.9
PIRVic Marine and Freshwater Science
The Victoria Government’s marine sciences research centre is located within the G21
Region at e.
Queenscliffe is the site of research into marine life at Primary Industries Research
Victoria's (PIRVic's) Marine and Freshwater Science program. The research has an
environmental and ecological emphasis.
The research involves investigations of both aquaculture and the ecology of the marine
and estuarine environment to identify factors necessary for the achievement of
sustainable development of Victoria's commercial and recreational fishing, and
aquaculture industries.
“In particular, PIRVic has expertise in aquaculture R&D, marine and freshwater fisheries
research, monitoring and development, marine and freshwater environmental research and
in designing and providing aquatic education programs.”
Source: Department of Primary Industries website Accessed May 2004
The projects under way at Queenscliffe include:
 Aquaculture R&D – investigations of aquaculture production systems.
 Marine and Estuarine Ecology – assessment, identification and monitoring of estuarine
and marine environments including the monitoring of water quality in terms of
contaminants, nutrients and life-forms.
 Marine Fisheries Science – conduct of stock assessments and population modelling for
bay and coastal marine fish resources.
The Centre also provides education services to early childhood centres, school groups,
tertiary students and the community.
9.10 CSIRO Textile and Fibre Technology
Geelong is also the location of another CSIRO facility, the CSIRO Textile and Fibre
Technology Division (T&FT).
This CSIRO Division is textile processing driven, so there is no strong biotechnology
connection. In the past, it serviced mainly the wool industry, but more recently has
diversified to include other textiles and allied technologies and industries.
Innovations arising from T&FT Division have been mainly chemistry-based scouring
technologies and environmental improvements, to assist the Australian industry to
reach the stringent wool-processing requirements to be applied in Europe from 2007 32.
Pesticide residue is another area of research – how and when to treat sheep to release
the least residue to the environment (a project requiring skills in organic chemistry) and
determining which compounds are most biodegradable.
The Division has around 200 technical staff comprising physicists, chemists and
engineers, of which about 160 are full time. These researchers mainly reside in
Geelong and the surrounding region, with a small number commuting from Melbourne.
The Division has significant capabilities (many of relevance to biotechnology) including
light microscopy, SEN and TEM analytical microscopy, scanning probe microscopy,
fibre chemistry and physics, chemical analysis and bonding of polymers to the surface
32
For example, chlorine treatment is currently used to modify the wool cuticle to bond a polymer that
prevents shrinking, but there are problems with the discharge of chlorine into the environment.
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of natural fibres. A contract project is currently under way that uses wool products for a
human medical application.33
The Division can provide information about the chemical composition of amino acids,
proteins and lipids and the nature of chemical bonds. It also has R&D capability that is
applicable to the hair care industry.
The T&FT Division is seen as having good industry links and has a pragmatic approach
to developing intellectual property with its commercial partners.
9.11 Geelong Education and Training
Geelong is well served with education and training in the biosciences, and this is a
major asset for the region.
9.11.1 Deakin University
Deakin offers a number of graduate and undergraduate courses at Geelong in
biotechnology and biological sciences.
The School of Biological and Chemical Sciences is one of the five Schools in the
Faculty of Science and Technology and is located at two campuses – Burwood and
Waurn Ponds. Courses on offer include: Biological science - Bachelor of Science
(Biological Science), Biotechnology - Bachelor of Science (Biotechnology), Chemical
science - Bachelor of Science (Chemical Science) and Forensic science - Bachelor of
Forensic Science.
The combination of biology and chemistry has contributed significantly to success in
attracting national competitive funding for both teaching and research activity.
In 2004, the School has 32 full-time academic staff (19 at Geelong and 13 at Burwood),
and 23 technical staff. More than 1,400 undergraduate and postgraduate students are
currently enrolled in degree, diploma or certificate courses offered by the School.
Field
Table 20. Student Enrolments by Field of Study – Deakin University 2000-2002
2000
2001
2002
Agricultural, Environmental, Related
Studies
Architecture and Building
Creative Arts
Education
Engineering and Related Technologies
Health
Information Technology
Management and Commerce
Natural and Physical Sciences
Society and Culture
Non-award
Total
428
423
421
734
982
3,138
1,180
2,934
1,408
8,671
1,536
7,806
223
29,040
694
1,073
3,183
1,072
2,839
1,652
9,512
1,502
7,262
300
29,512
707
1,173
3,387
1,136
2,766
1,795
10,117
1,605
7,205
442
30,752
33 This is a confidential industry project.
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In addition, the School of Ecology and Environment offers courses in: Bachelor of
Environmental Science (Environmental Management), Bachelor of Environmental
Science (Conservation Ecology), Bachelor of Environmental Science (Fisheries
Management and Aquaculture), Bachelor of Environmental Science (Marine and
Freshwater Science) and Bachelor of Environmental Science (Integrated Catchment
Management).
.
9.11.2 Gordon Institute
The Gordon Institute provides courses in biosciences through the School of Life
Sciences and the Specialist Centre in Environmental Technologies.
It plays a strong role in supporting the research sector and pathology services in the
region.
Courses are delivered in Laboratory Technology, Pathology Testing and Biological and
Environmental Testing. The diploma courses are:
 Diploma of Laboratory Technology (Biological and Environmental Testing) – the course
provides students with laboratory skills and knowledge required of a specialised career
in either Biological and Environmental laboratories in a wide range of fields.
 Diploma of Laboratory Technology (Pathology Testing) – the course provides students
with laboratory skills and knowledge required for a career in the Medical Laboratory
field.
 The courses in environmental technologies include: Diploma of Conservation and Land
Management and Diploma of Environmental Management.
Certificate level courses are offered in Animal Sciences and include Certificate II in
Animal Studies and Certificate III in Animal Studies.
9.11.3 Marcus Oldham College
Marcus Oldham College was established in 1992 and teaches the principles of
business management for farming, agribusiness and equine enterprises.
The College's approach covers animal and plant production as well as analysis of
financial and human resources. It’s mission is "To advance agriculture through
innovative educational programs in farm, agribusiness and equine management."
Most of the students live on campus. They come from Australia (96%) and overseas
(4%). About 36% of the total are from Victoria, about 25% from New South Wales and
12% from Queensland.
The courses offered are Bachelor of Business (Agricultural Management) and
Advanced Diploma of Farm Business Management, Diploma of Agribusiness and
Diploma of Horse Business Management.
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10 SWOT Analysis
As part of our assessment of biotechnology in Geelong, we conducted a SWOT
analysis based on: interviews in Geelong with key persons involved in biosciences,
some interviews conducted outside Geelong and our review of the sector.
Our analysis shows that Geelong has a number of strong positives as an emerging
regional biotechnology hub. There is a good base on which to build the sector.
10.1 Strengths of Geelong
Significant strengths were recognised, which provide a foundation for future growth.
A number of strengths come through in our analysis. These strengths are summarised
below, and combined provide a foundation for the development of biotechnology in the
region.
Geelong Strengths
Science Reputation
Institutions –CSIRO (AAHL),
Deakin,
Lead researchers at Deakin
Spin-off Companies
Existing Foundations
Two successful spin-offs – with
strong futures
Want to be involved in helping
others
Committed to staying in the region
Major research centres
Research infrastructure –
buildings, equipment
Education and Training
High quality and industry linked
training
Significant number of researchers
Major local university Deakin
Deakin – Science
Gordon – technician level
Geelong Technology
Precinct (GTP) Building
Deakin Management
Centre
Cooperation
Informal networks
Deakin has history of
working with industry –
research, IP, education
Research cooperation
Deakin is flexible and
entrepreneurial
Exploring new links
Commitment to Future
Research
Barwon health well linked to
community
Active leadership and commitment
to biotech – research/health sector
G21 providing a focus on future
possibilities
Councils focused on long term
future
Avalon Airport – connecting flights
to international airports
Ring Road will improve access to
Deakin
Living
Large City
Improving facilities
Good housing options
Lifestyle attractions
Land available for GTP
Deakin is expanding
Barwon Health research
restructure and expansion
CSIRO – developing new areas
(aquaculture)
Leadership
Access
Access to Melbourne
Good secondary education
Changing demographics –
professionals/ increased
education levels
State Government
Interest in Geelong and
biotechnology
Other
Population characteristics suitable
for clinical trials
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10.1.1 Reputation and Infrastructure Foundations are Significant
There are a number of key advantages in terms of reputation and research
infrastructure.
 Science reputation - the presence of institutions with an international reputation
(CSIRO/AAHL) and leading researchers at Deakin and Barwon Health.
 Existing research infrastructure - the existence of several major research centres, a
substantial investment in buildings and equipment, clusters of researchers, a major
university with scope for expansion as a research location (via development of the
Geelong Technology Precinct).
 The Geelong research specialisations are in several areas of Australia’s major research
strengths - Animal Health at CSIRO; Health/diseases at Barwon Health and Deakin;
and Pharmaceuticals at Deakin (Chirogen, ChemGenex Pharmaceuticals).
There was a strong commitment to future growth among the major research
institutions.
 Deakin was seen as having a strong commitment to expanding research, combined with
an entrepreneurial style and a cooperative approach in working with industry.
 CSIRO was seeking to expand through the development of the National Aquatic Animal
Health Centre.
 Barwon Health is restructuring its research activity and has the concept of developing a
major research centre under the umbrella of Barwon Research.
Commercialisation has begun.
 Deakin has been successful with the creation of two spin-off companies (Chirogen and
ChemGenex Pharmaceuticals) in areas of biotechnology with potential for generating
substantial future revenue.
 The companies are committed to staying in Geelong and were prepared to play a role in
helping other companies to develop.
 CSIRO has established commercialisation partnerships with industry and is always
looking for new opportunities.
10.1.2 Quality Education is Available
Geelong has a strong education and training base.
 Education and research training is delivered through Deakin’s Faculty of Science and
Technology.
 Gordon Institute of TAFE provides diploma and certificate level courses in laboratory
training, pathology and environmental science.
10.1.3 Cooperation and Linkages
There is existing cooperation between researchers and this can be developed further.
 Significant informal links already exist among the major institutions (CSIRO, Deakin,
Barwon Health).

There is a readiness to explore future areas of cooperation.
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10.1.4 Locational Factors were Important
A number of location factors, make for a good location.
 Geelong has good road access to Melbourne.
 JetStar flights from Avalon provide connections to international gateways in Sydney.
 The development of the Geelong Ring Road will improve access to Deakin and provide
good accessibility to the GTP (and increase the value of the site).
 Geelong has all the facilities of a large city and is a good place to live. Changing
demographics are reshaping the city as more professionals are attracted to the coastal
lifestyle that the region offers.
10.2 Weaknesses
The major weaknesses identified primarily relate to scale, fragmentation and external
recognition.
The major concerns include:
 There is only a small number of research institutions with total researcher numbers
being dominated by CSIRO/AAHL.
 Geelong is still has an emerging biotechnology sector.
 There is currently a lack of critical mass in biotechnology, and research funding is
inadequate (particularly in the health segment).
 There is a need to secure a substantial boost to research funding and to scale up
activities in all areas.
 Geelong is not recognised as a biotechnology location and is still seen as an industrial
area. This presents difficulties in recruiting researchers out of Melbourne (a comment
was made that it is easier to attract an overseas researcher than to recruit someone
from Melbourne).
 The travel times to Melbourne institutions create some intellectual isolation.
 Distance from Melbourne means that Geelong is not on the radar of investors.
 The fact that biotechnology sites were scattered around a large city added to
fragmentation and lack of contact among participants.
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Geelong Biotechnology Opportunities Study
Geelong Weaknesses
Research Focus
Small number of
institutions
research
Specialisation across a range of
activities
Activities have been fragmented
and small scale
The current lack of critical mass
in biotechnology
Reputation/Recognition
Limited external recognition
Geelong seen as an industrial
area
Difficult to attract companies to
Geelong
Research Funding
Funding is limited – need a substantial
boost for future growth
Lack of venture capital or local angels
Difficult to establish spin-of companies first round investors in the capital cities 'Proximity Rule' applies - investment
within 30 km of head office
Difficult to compete for funding with
established unis/ institutes
Limited
funding
for
health-related
research
Biotech will need to compete with other
areas of G21 funding
Cooperation
Location
Sites scattered around the City, but
some
co-location
opportunities
emerging with GTP
Intellectual isolation
Can be difficult to recruit researchers
who would prefer to remain in
Melbourne
Travel times to Melbourne Institutions
Not enough cooperation in past
Too many organisations that want to be
involved
Limited awareness of research at other
Geelong institutions
10.3 Opportunities
10.3.1 Geelong Opportunities
Major perceived opportunities were built around current capability areas.
A number of opportunities were identified for Geelong, and these are summarised in
the table below and discussed in more detail later in this report.
A major development focus needs to be on building the current research
specialisations through securing additional research funding.
The existing major research strengths were seen as being in:
 Health-related research in diseases, drug treatments and pharmaceuticals.
 Animal health – including diseases and vaccines.
 Aquaculture has major potential along with some environmental applications
Several of these strengths are based on the unique position of Geelong as a coastal
city with a regional hinterland and a significant population base.
Most of the areas of opportunity relate to moving along the research and development
chain. These include developing a scale-up facility in bioprocessing; developing GLP
(good laboratory practice/pharmaceutical drug production) laboratories for student and
industrial use; and the expansion of contract research.
Other areas of opportunity related to expanding research infrastructure including the
Geelong Technology Precinct (as the key location for biosciences activity), developing
stronger links between the major biotechnology players in Geelong and building
partnerships with national and international businesses.
All of the major players have research strategies in place, were pursuing activities that
had a high potential for returns and were within their existing capability.
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Geelong Biotechnology Opportunities Study
Geelong Opportunities
Expand on Existing Activities
Development of Barwon Research - to bring together
expertise in biotechnology, epidemiology and clinical
research ( ie. clinical trials)
Expand existing research areas – through additional research
funding
Fresh-water aquaculture
Expand health research - osteoporosis, diabetes and
cardiology
GLP (good laboratory practice / pharmaceutical drug
production) laboratories for student and industrial use
Expanded contract research
Development of bioinformatics
Develop a scale-up facility (bioprocessing ) at Deakin
Infrastructure Development
Co-location of biosciences activities in GTP
Stage 1
Future development of GTP (Technology
Park Stage)
Develop External Links
Develop expanded links with pharmaceutical
companies- clinical trials, contract research,
research partnerships
Strengthen external links - Werribee Food
/Deakin Functional Foods
Business Attraction
Build recognition for Geelong Biosciences
capability
Target some major firms as part of an
attraction strategy – but significant
infrastructure support is likely to be required.
Fine chemicals training for medium sized scale up
Devices and diagnostics
Environmental biotechnology
Develop Local Linkages
Stronger linkages between major players – CSIRO/Deakin,
Barwon Health/Deakin
Aquaculture –development at CSIRO , linkages to Deakin
and PIRVic Queenscliffe
Secure Additional Funding
Focused approach to securing new research funding
(including joint projects)
Seek specific project funding under G21 umbrella
10.3.2 National Opportunities
As part of the Science and Innovation Mapping process undertaken by the Australian
Government during 2003, a number of national opportunities were identified 34. These
covered: agrifood, environment, bio-medical, pharma and human therapeutics,
diagnostics, clinical trial and platform technologies.
A major focus of these opportunities was on linking into global markets through contract
research and trials and partnerships.
In the case of Geelong, the capability is spread across several areas - agrifood,
pharmaceuticals and human therapeutics and clinical trials.
34
Mapping Australian Science and Innovation, Main Report Department of Education, Science and
Training, November 2003.
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Table 21. National Biotechnology Opportunities
Sector
Opportunity
Agri-food
Nutrition in food
GMOs
Environment
Environment remediation
Bio-degradable packaging
Bio-medical
Nano-technologies, devices,
Pharma and Human Therapeutics
Linkages between small firms and large pharmasR&D, production, marketing
PIIP Scheme R&D
Outsourced research contracts from international
companies
Diagnostics
Diagnostic studies – for international companies
Clinical Trials
Special disease, seasonal trials
Platforms
Genomics, bioinformatics
Source: Mapping Australian Science and Innovation, Main Report Department of
Education, Science and Training, November 2003.
10.4 Threats
The major threats identified related to the ability of Geelong to compete for research funding
and to scale up its activities, and potential shifts in government research priorities.
The region was seen as having only a few key research leaders, the loss of whom
would impact on future growth. While the GTP was seen as a major asset for the
region, concerns were expressed about difficulties if market interest could not be
secured for the next stages of development.
There were major concerns expressed that Geelong would not have the investment
dollars in any competition with other regions to attract new biotechnology activities. In
addition there was a concern that biotechnology would have to compete with other G21
Projects that may deliver more immediate payoffs in business and jobs.
Geelong Threats
Research & Project Funding
Failure to secure additional research funds
Limits on Commonwealth funding
Change in Commonwealth Government research
funding priorities
Competition for funds – national and state research
and project funds
Shift in CSIRO priorities
Research Leaders
Loss of key individuals to other institutions/ regions
Loss of local biotechnology champions
Recognition of Geelong
Failure to build biosciences recognition
Geelong Technology Precinct
Not able to attract key tenants to GTP
Unable to secure developer interest in GTP
Unable to scale up activities at GTP
G21
Loss of momentum for G21
Competition for development funding from other
G21 Projects
Business Attraction
Competition with other locations
Loss of key businesses from the region
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11 Developing the Biotechnology in Geelong
In assessing the potential for growth in biotechnology in the Geelong Region, it is important
to understand some of the key drivers of the sector.
11.1 Key Factors Supporting Development
The following table highlights a number of the key drivers that influence the
development of biotechnology activity in a regional location. Buchan’s analysis along
with a review of international business experience has identified these factors as
important.
In overall terms, Geelong can be classified as an emerging biotechnology location. It
has a base anchored by CSIRO and PIRVic, with significant expansion occurring at
Deakin and plans for expanded research activity at Barwon Health.
At the moment a large part of R&D is at the discovery phase. Over time this will need to
be expanded and activity also moved into the commercialisation phase.
Activity and resources are concentrated in the research and discovery phase. Any major
expansion in the medium term will need to be built on an expansion in research and
increased levels of commercialisation.
Table 22. Factors Supporting the Development of Biotechnology
Factor
Geelong Rating
Proximity to academic excellence
Medium/High
Availability of skilled workforce
Medium
Research leaders active in the region/driving High
cluster
Established infrastructure/co-locations
Medium/High
Technical support & services
Medium
Generation of IP from institutions
Medium
Specialist education and training
High
Connections with larger life sciences companies
Low
Venture capital and business angels
Low
Commercialisation, patenting expertise
Medium
Lifestyle attractions
Medium/High
Source: Buchan Analysis based on review and assessment of sector and Geelong location
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11.2 Proximity to Academic Excellence
Biotechnology firms have largely emerged from centres of excellence in CSIRO, universities
and hospitals, government laboratories, medical research institutes and agricultural research
institutes.
This has been the pattern worldwide, in Australia (and indeed in Geelong) where many
of the biotechnology companies have developed from research arising in the public
sector institutions.
This pattern was confirmed in a recent study35 of the pharmaceutical sector, and is a
major reason why governments have increased funding for research in biotechnology –
to provide foundations for discovery and development of new products, processes and
technologies.
“The growth of the biomedical sector is mostly from Australia’s medical research base.
Seventy per cent of biomedical companies formed in 2001 were spin-offs from research
institutions. Most began with a group off focused scientists pursuing a single lead. These
spin-off companies add significant value to discoveries, developing products to Phase II or
early Phase III clinical trials before forming alliances with larger companies for final product
development and marketing. They have a high risk of failure, but if successful, offer potential
significant returns for founders and investors.”
Source: Pharmaceuticals Industry Action Agenda 2002
Geelong also has a strong foundation, with research projects focused in growth areas
and teams with international reputations in their fields.
In Australia and elsewhere, research institutes with discoveries have pursued a variety
of models to commercialise their research. These approaches include: licensing the
technology for development by a third party, funding continued development of the
technology by the institute prior to licensing; creating a joint venture or strategic alliance
to commercialise; establishing a company to add further value to the technology;
establishing a company to develop and take the technology to market.
The returns from commercialisation for institutions have been variable in Australia.
Some institutes have been constrained because they lack the funds to sustain
development over time, do not know how to value the IP (over-value or under-value)
and have limited management and commercialisation skills and experience.
Geelong has some commercialisation experience that has been developed through the
Deakin spin-off companies.
35
Pharmaceuticals Industry Action Agenda 2002
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Geelong Biotechnology Opportunities Study
11.3 Business Model for Biotechnology Firms
To create effective industry development programs, it is important to understand the
business fundamentals of the biotechnology sector.
11.3.1 Timing Cost and Risk
The Biotechnology Sector has very long development and product cycle times.
Development Times
Research, development and manufacture of therapies for human use are high-risk and
high-cost, and can take between 10 and 15 years from commencement to completion.
This contrasts with other sectors like ICT where product life cycles can be very short.
It is also a risky process – a large investment is required in development and regulatory
approvals, only a small number of products reach the market and the major revenue
streams tend to be focused on a small number of final products.
The potential for very large returns from proven discoveries that reach the market is the key
driver of the business model for biotechs.
Researchers have to build partnerships with major firms to be able to survive the
research and trials process. Partnerships have become increasingly important, with
major life science firms establishing relationships to secure new technologies to
develop36.
The following diagram illustrates the time scale from initial discovery to market entry for
a pharmaceutical product in Australia.
A recent US study has highlighted the relationship between research projects and the
number of products that are finally successful in the marketplace.
“Biotechnology is a risky business. Improved understanding of genetics has led to some
novel and successful therapies, but relatively few research projects lead directly to new
products. In a given year, the National Institutes of Health (NIH) will fund about 25,000
research projects. Researchers and private companies get an average of 5,500 patents for
new biotechnology in a given year. Around 400 biotech medicines are in development, but
only about 100 biotech-related drugs have reached the market in the past 30 years, with the
top ten accounting for nearly all of the sales (Standard and Poors 2000).”
Source: Signs of Life the Growth of Biotechnology Centres in the US the Brookings
Institution 2002 P9
36
Most of the major life sciences companies in Australia have licensing specialists who are looking for new
discoveries to license or acquire.
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Geelong Biotechnology Opportunities Study
Chart 7.
Process of Pharmaceuticals Development
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Geelong Biotechnology Opportunities Study
Development Cost and Risk
The following table from the Pharmaceutical Industry Action Agenda 2002 shows the
cost/risks and rewards in the case of pharmaceuticals.
 An initial discovery cost of $2 million develops into a cumulative cost of $300 million by
the time the product gets to market (with major costs being incurred in Phases I to III
trials).
 The returns in terms of net royalty increase the closer the product is to market.
 The probability of success increases dramatically beyond Phase II trials.
Table 23.
Pharmaceutical Development Costs and Risk
Source: Pharmaceuticals Action Agenda 2002 DITR (Chart 12)
It shows that development costs are very high but the rewards for success are
substantial. This is the major driver of the biotech business model. It also means that
the capital requirements to support development are extremely high.
The net effect of this development cycle is a major requirement for patient capital.
11.3.2 Business Structures
The business structures for biotech firms are similar worldwide. Biotech firms tend to be
small and often remain small, with few growing to be fully integrated firms. Indeed, for
many, their business plan is to remain small. The following summarises the types of
firms.
 Fully Integrated Firms - major pharmaceutical companies are integrated operations that
conduct activity from research through development and manufacturing to global
marketing of final products. There are few Australian owned firms in this category.
 Partially Integrated Firms - some Australian firms in devices and diagnostics are partially
integrated and are able to manufacture and distribute products through agents.
 Virtual Firms – as a way of managing costs and maintaining flexibility, virtual
biotechnology firms have emerged. These firms have only a few core staff and contract
in most of the services (marketing, IP, commercialisation) that they need. This often
includes ongoing research and development arrangements with the research institute
from which the technology arose. Many of the small Australian biotechs operate on
this basis. This model tends to anchor companies near their establishment
locations.
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Geelong Biotechnology Opportunities Study
11.3.3 Alliances and Partnerships
Alliances or partnerships between participants along the value chain are important.
Biotechnology firms have found partners in the major pharmaceutical companies that
have both a strong appetite for new products and the capacity to acquire products or
fund their development. Most of the major firms have established some relationships
with biotechnology companies and research institutes in Australia (eg. GlaxoSmithKline
and Bristol Myers Squibb, Merck, J&J).
A study by the Centre for Strategic Economic Studies at Victoria University of
Technology shows that alliances are vital for pharmaceutical discoveries and
technology.
“Alliances with global companies represent the prime development path for Australia’s
biomedical companies and research institutions. Alliances incorporating licensing or other
forms of collaboration are one mechanism by which the multinationals obtain access to new
products, the Australian research and development sector creates a path to market, and the
means by which all companies and institutions obtain skills and technology.”
Source: Centre for Strategic Economic Victoria University of Technology. The Role of
Pharmaceutical Alliances - Summary
Alliances have been accelerating during the late 1990’s, with most of the major
companies establishing units to seek out new products and technologies from
universities and research institutes.
Chart 8.
Number of Alliances by Type of Organisation Australia 1993-2001
Source: Pharmaceuticals Industry Action Agenda Local priority—Global partner 2002 P20
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Geelong Biotechnology Opportunities Study
This is now a common trend in Australia and internationally and has created a pattern
of “Davids and Goliaths”.
“Firms tend not to move between these two categories—small biotech firms, even
extraordinarily successful ones, do not grow into large pharmaceutical firms. Instead, biotech
research firms tend to sell or license their technologies to larger pharmaceutical firms, or to
form joint ventures with them, or to sell them their entire companies. The different business
skills required and the high cost of scaling up to global scale manufacturing and distribution
usually discourage small research firms from growing internally. The result is huge
differences in the apparent optimal scale of biotech research firms and that of
pharmaceutical firms, appropriately referred to as “Davids” and “Goliaths.”
Source: Signs of Life the Growth of Biotechnology Centres in the US the Brookings
Institution 2002 P7
As well as being a development strategy for small biotechnology firms, partnerships
have become a key strategy for large firms to acquire new technologies.
Most of the global pharmaceutical companies no longer rely exclusively on new
products developed in-house. They also form partnerships and/or strategic alliances
with other large firms, and with other specialist smaller companies.
These
arrangements include: the sourcing of products at Phase II or III trial stage from small
firms or research institutions; contract research at the clinical trial stage; and contract
manufacturing or joint ventures for sales and marketing.
The Brookings Institution has recently commented on the scope and scale of these
activities.
The pharmaceutical sector and the biotech sector are characterised by very widespread
intersectoral ties between firms. These ties take the form of cross ownership, licensing, joint
ventures, and research agreements. Large pharmaceutical firms often invest in promising
research at smaller biotech firms. Small firms obtain access to the pharmaceutical firms’
regulatory expertise and manufacturing and marketing capability. Firms frequently share
technology: Recombinant Capital (2001), a research firm specialising in the biotechnology
industry, reports more than 10,000 industry alliances during the 1990s.
Source: Signs of Life the Growth of Biotechnology Centres in the US the Brookings
Institution 2002 P8
11.3.4 Location Factors
Spin-out companies often remain close to their parent research organisation,
maintaining a variety of links including joint research projects, contract research,
teaching arrangements and placement of research students, use of laboratories and
sharing of equipment.
This equally occurs in the major centres in the US as it does in Melbourne, and has
major implications for business attraction activities.
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Geelong Biotechnology Opportunities Study
“….. it seems clear that conventional industrial recruiting activities will be of limited utility.
There is little evidence that biotechnology firms move from place to place. Biotechnology
firms develop locally, drawing on the ready availability of talented workers, relevant
research, and localised venture capital. Most firms are small, young, single-establishment
firms that remain located in the metropolitan areas in which they are started. Consequently,
metropolitan areas interested in biotechnology should focus on indigenous biotech
development strategies.
Source: Signs of Life The Growth of Biotechnology Centres in the US The Brookings
Institution 2002 p34
As we have seen, this is the location pattern in Melbourne, with most firms remaining
near the institution from which their technology emerged.
A recent survey of Melbourne firms highlighted the importance of low costs, transport
and infrastructure and proximity to R&D institutions. 37
Chart 9.
Ranking of Reasons for Choosing the Current Location –
Biotechnology Firms Melbourne
Source Bioscience to Bioindustry A Role for Local Government in
Biotechnology in Victoria, Aoris Nova January 2004
There are few footloose biotech firms looking around for a new home. An exception
may be some of the firms producing or distributing devices. While these firms
(particularly international firms) may not be tied to an institution, they may locate in one
of the major regional clusters to be close to some of their major customers.
This has major implications for regions like Geelong that want to expand their biotechnology
sector and highlights the need for a “grow your own” strategy through expanding the current
research base.
37
Bioscience to Bioindustry A Role for Local Government in Biotechnology in Victoria, Aoris Nova
January 2004. Note the lower the score the more important the factor.
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Geelong Biotechnology Opportunities Study
11.4 The Need for Funding
“The high level of uncertainty of success and the great length of time required to develop
biotech products make biotech development a costly proposition. Biotech firms need to pay
for expensive medical research, laboratory facilities, and legal fees many years in advance
of any likely sales revenue and with uncertain prospects of success. This reality makes
large amounts of patient, up front capital an essential ingredient for successful
biotechnology firms.”
Source: Signs of Life the Growth of Biotechnology Centres in the US the Brookings
Institution 2002 p9
11.4.1 Raising Capital
Investment funds are fundamental to the growth of biotechs. Biotechnology companies
in Australia need to raise capital in a very small market. The recent science mapping
project has highlighted this fundamental issue.
“In mature biotechnology sectors, such as the United States and United Kingdom, start-up
companies are often supported by private investors, including business angels and venture
capitalists, for around six to 10 years. These investors are frequently active participants in
the company, providing business advice and networks to assist the company through its
start-up years. If and when products are close to market, the company may consider
options for listing on a stock exchange to obtain the funds to boost the company’s coffers for
final development and marketing and provide returns for the private investors.
However, this type of support is less common in Australia, as the private investment market
is not as large, sophisticated, or as comfortable with risk-taking as private investors
overseas. A shortage of investor capital, particularly at pre-seed and seed stages constrains
the growth of start-up companies, limiting their opportunities to develop or acquire diverse
product portfolios. The biotechnology sector does not yet have a strong commercial track
record, leading many in the investment community to perceive it to be an overly risky
investment proposition. These factors present significant challenges to Australian biotech
companies. “
Source: Mapping Australian Science and Innovation, Main Report Department of Education,
Science and Training, November 2003. P318
A recent Australian study demonstrates the fundraising patterns of Australian firms.
Over recent years small biotechs have been going to the market for funding. A recent
study by the Australian Graduate School of Management, examined the experience of
a group of companies that raised funds through IPOs 38.
The study examines 24 biotechnology IPOs on
during the period 1998-2002 (an active period
companies and their technologies at IPO;
technological objectives were achieved; and
business models in the current market.
the Australian Stock Exchange (ASX)
for biotech listings). It examined: the
the extent to which financial and
how the companies changed their
The 24 firms operated in the human health arena (15 drug discovery/genomics, five
diagnostic, three medical systems/device firms, one chemical). In all but two cases, the
38
Australian Biotechnology Do Perceptions and Reality Meet? David Sparling and Michael Vitale Australian
Graduate School of Management UNSW September 2003 p5
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Geelong Biotechnology Opportunities Study
technologies originated in an academic institution, medical research institute or
CSIRO."39
Comparisons were also made with other firms raising funds in the market at the same
time. It showed that the biotechs out-performed the other IPOs during the study period.
"From IPO to the present time shares in the recently listed biotechs (+67%) significantly
outperformed those of US biotechs (-45%), Australian non-biotech IPOs (-36%), and the
Australian stock market as a whole (-5%)."
Source: Australian Biotechnology Do Perceptions and Reality Meet? David Sparling and
Michael Vitale Australian Graduate School of Management UNSW September 2003 P5
The analysis shows that funding was from a number of sources:
 Early stage funds (pre-IPO) came from various sources including universities,
government and contributions in time and money by research scientists.
 After the transfer of technologies into the start-ups, funding was from a combination of
government programs, venture capital, research and development syndicates, as well
as continued university support in some instances.
Sparling and Vitale estimated that:
 A total of $88 million from a variety of sources was invested in these firms before IPO.
 Between 1998 and 2002, Australian investors provided more than $250 million to these
24 biotech firms.
The business model for most of the firms examined was to license their technology to a
major pharmaceutical company – the development pattern that we examined earlier in
this report.
"The business models identified in the IPO prospectuses for these firms reflect both the
small size of the firms and the significant resources needed to take a biotechnology product
through regulatory approval to an end product. All firms with a major or minor emphasis on
drug discovery and development had a strategy of adding value to initial discovery research
and then licensing the technology to a large pharmaceutical partner. Only the six firms in
diagnostic or device businesses planned to take their products all the way through to the
market. Two others planned to in- license promising pharmaceuticals from other firms."
Source: Australian Biotechnology Do Perceptions and Reality Meet? David Sparling and
Michael Vitale Australian Graduate School of Management UNSW September 2003 P 10
39
Australian Biotechnology Do Perceptions and Reality Meet? David Sparling and Michael Vitale Australian
Graduate School of Management UNSW September 2003 P5
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Geelong Biotechnology Opportunities Study
Major concerns have been expressed about the impact of small scale and a narrow
capital market on the development potential of Australian firms and the tendency to trap
them in a “perpetual start-up phase”.
“Many Australian biotechnology companies are trapped in a perpetual ‘start-up’ phase of
limited product portfolios and limited revenue. Start-ups often form around a particular
product and their fortunes rest on whether or not that product is a success. Some
companies are able to acquire or develop similar products, or have additional activity such
as contract research, to provide income for further R&D. However, with limited available
investment, Australian biotechnology companies are less able to expand their product
portfolios.”
Source: Mapping Australian Science and Innovation, Main Report Department of Education,
Science and Training, November 2003. P320
These Australian companies are small on a world scale and have limited resources to
take products to market and to survive the costly regulatory approval processes, which
we outlined earlier. It is likely that many will link up with the larger international
companies that they have developed a research relationship with.
"Perhaps a more likely outcome is vertical consolidation–acquisition by a larger “upstream”
company, for example a large pharmaceutical, and perhaps one with which the biotech has
an established research or marketing relationship. Many Australian biotechs have such
alliances already, and the knowledge shared in the course of working together could smooth
the path to consolidation. "
Source: New Biotechs Face Mixed Future Michael R Vitale & David Sparling Australian
Graduate School of Management September 2003 P 3-4
An understanding of business model and pattern of relationships and the sources of
capital is fundamental to expanding biotechnology activity in the Geelong region.
This industry research in Australia and the US, highlights how research relationships
develop into downstream business relationships and this is an important pattern for any
major expansion for biotechnology in Geelong.
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11.4.2 Venture Capital and Business Angels
Venture capital and business angels have been important to the development of
innovation based industries.
There are no local venture capital funds or business angels based in Geelong. While
Geelong is a large regional city and has a number of business leaders who invest in
local businesses, ventures in biotechnology appear as risky and highly speculative.
Geelong businesses need to approach the capital city-based venture capital funds,
and, in the case of an IPO vehicle, to raise capital in the market.
Even with a substantial scale up in research and commercialisation activity, a venture capital
fund is unlikely to develop in Geelong. Tapping into the Australia market via Melbourne will
continue to be a route to funds in future.
11.5 A Skilled Workforce
11.5.1 Research Leaders
Research skills are fundamental to the biotechnology sector. Most key research projects are
developed around the reputation and experience of the research leader.
The presence of research leaders with an international reputation is fundamental to the
development of the sector. It is critical for a regional research centre to recruit, develop
and retain these leaders.
Researchers are attracted to the reputation of the leader and the institution, often in
that order.
Biotechnology is a global market with many individual researchers having the
opportunity to work in other countries. Higher salary levels in the US and Europe (and
the scale of these markets) are attractive and it is often difficult to lure people back to
Australia.
Recognising this, a number of government programs have been developed to attract
key research leaders back to Australia. The Australian Government’s Federation
Fellowships perform this role. The Victorian Government has recently introduced a
similar program (VESKI Victorian Innovation Fellowships).
Geelong has a number of institutions and individual research leaders with international
reputations in biosciences fields. The retention of these leaders is important for future
growth.
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11.5.2 A Skilled Workforce
Geelong has a highly skilled workforce. The table below shows the qualifications of
persons working in Greater Geelong. The high incidence of higher degree qualifications
reflects the strong education, health sector and research and development profile of the
region. Of the almost 500 persons working in the region with doctoral level
qualifications, one third had qualifications in natural and physical sciences and around
25 % had qualifications in heath areas.
Table 24. Qualification Level by Field - Persons Working in Greater Geelong 2001
Fields
Doctoral
Degree
Masters
Degree
Graduate
Diploma
Graduate
Certificate
Bachelor
Degree
Advanced Diploma
Diploma &
Associate
Degree
60
102
Total
604
Advanced
Diploma
and
Diploma
3
Natural and Physical
Sciences
165
60
18
3
Information Technology
13
15
62
Engineering and Related
Technologies
31
62
31
5
244
5
47
68
459
0
612
9
320
457
1,522
Architecture and Building
5
13
Agriculture,
Environmental and
Related Studies
Health
3
13
10
0
168
0
42
90
328
17
3
85
0
82
78
281
132
Education
Management and
Commerce
Society and Culture
28
11
82
259
39
2,151
12
639
166
3,480
181
159
704
139
11
39
1,877
1,118
8
19
640
461
187
542
3,636
2,488
Creative Arts
84
162
154
11
1,138
6
168
328
2,051
6
16
27
3
256
10
193
172
683
Food, Hospitality and
Personal Services
Mixed Field Programmes
0
0
0
0
6
3
67
66
142
0
0
0
0
0
0
3
0
3
Inadequately described
0
8
9
0
160
0
20
33
230
Not stated
12
5
6
0
35
8
35
49
150
8,454
83
2,777
2,338
16,468
Total
490
776
1,436
114
Source: ABS Census 2001 Working Population Greater Geelong
As a region Geelong has an advantage in terms of having quality education and
training programs delivered by Deakin and Gordon Institute.
While skills are important for the biotechnology sector, there have been few detailed
studies of future skill needs, conducted at both a state and national level.
The industry surveys that have been conducted have largely focused on two areas: the
need to attract and develop high level research skills including researchers from
overseas; dealing with an identified gap in “development skills” in relation to
management and commercialisation.
Recent research conducted by Buchan has shown that changes occurring in the
industry are creating new skills pressures, specifically the need to recruit and retain
additional well-qualified researchers and to broaden skills to encompass
commercialisation. These pressures are largely the result of growth in two areas:
growth of the public sector research institutes, driven by significant increases in funding
for research in biotechnology and related fields; and increase in the number of private
biotechnology companies and spin-off companies that are creating new job
opportunities.
Within the sector in Victoria there are significant skill gaps and recruitment problems.
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The survey by Buchan Consulting was part of a major study conducted for Box Hill
Institute of TAFE, and showed that 50% of organisations interviewed had difficulty
recruiting qualified people40. Most of the difficulties were experienced by smaller
companies, with larger biotechnology and pharmaceutical companies and major
research institutes having fewer recruitment problems.
Of those organisations that reported difficulties, the most common problems faced
when recruiting employees were that candidates: could not meet the specific criteria or
specialist needs of the organisation; lacked sufficient industry experience; lacked the
required combination of scientific and commercial skills; and lacked the independence
and confidence needed to work effectively in a laboratory environment.
The Buchan survey identified future training requirements in several areas: research
(biotechnology degrees, upgrade training, and specialist training); laboratory related
training (safety, quality, technical); information technology (bioinformatics, databases);
and business/commercial (marketing, commercialisation).
Buchan’s discussions with Melbourne based companies confirmed that access to a
highly skilled workforce is fundamental requirement. A major concern about Geelong is
not being able to attract the right research employees.
While Geelong has 300 researchers, there are still some skill issues.
All research organisations in Geelong commented that it is often difficult to attract
research staff and graduate students. Several research centre leaders commented that
it is often easier to recruit an international researcher than it is to attract someone out of
Melbourne.
In the case of Geelong, future skill requirements include:
-An ability to attract research leaders with an international reputation to head up research
centres.
- A need to continually attract experienced researchers.
- A broadening of the skills base in commercialisation and business management.
40
Feasibility Study - Specialist Centre in Biotechnology Buchan, A Report to Box Hill Institute, Buchan
Consulting November 2003
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Geelong Biotechnology Opportunities Study
11.6 Research Leaders are Active in Driving Development
“Technology regions such as Silicon Valley, Boston, Austin, San Diego, Cambridge all
developed with regional leaders in collaboration with university administrators taking
aggressive measures to build facilities, encourage venture capital, provide amenities and the
environmental quality demanded by knowledge workers.
Source: Commercialisation Discussion Paper Knowledge Commercialisation Australasia
March 2003 P 4
There is recognition at CEO level and at Research Head level of the need to drive a
major expansion in research activity. There is also recognition of the need for
cooperation on joint research and other industry development activities.
 Deakin has implemented a major expansion of its research activity, with biotechnology
and the biosciences being priorities.
 Barwon Health is planning to expand its research activity.
 CSIRO is working on the establishment of the aquaculture centre.
Geelong has a major advantage in that the leaders of the major research institutions are
supportive of the G21 biotechnology initiative.
11.7 Established Infrastructure/Co-locations
Geelong is not starting from scratch in biotechnology. It has a substantial investment in
infrastructure and research activity.
Geelong has well-established infrastructure that supports biotechnology R&D.
Substantial capital investment has gone into building research facilities at CSIRO/AAHL
(with the replacement value of the facility estimated at $500 million).
Deakin University has a substantial investment in science facilities and the GTP
building and spends on average $3.3 million per year on capital investment in
biotechnology facilities and equipment.
Barwon Health is currently implementing its plan to integrate its research centres.
An issue for Geelong, is that the sites are scattered across the region from City Centre
(Barwon Health), Moolap (CSIRO/AAHL) to Waurn Ponds (Deakin) and Queenscliffe
(PIRVic).
In addition, some of the key areas of biosciences, aquaculture and health research
occur at Deakin’s Burwood and Warrnambool campuses.
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Geelong Biotechnology Opportunities Study
The new GTP Building (and the long term plans for the Geelong campus) will allow for
the co-location of a range of innovation activities(including biotechnology) at Deakin.
This level of infrastructure provides a strong foundation for growth in the region. Future joint
research projects and the development of the technology park associated with the GTP
could offer potential for further co-locations and the development of new research centres
and manufacturing facilities.
11.8 Technical Support and Services
In broad terms, Geelong is large enough centre to provide a full range of services to
most industries. for the local supply of services.
However the market is too small to support specialist services like IP and legal
services, financial advice and venture capital. These are largely secured from
organisations in Melbourne(and other capital cities). The local biotechnology cluster is
not large enough to sustain a market for these services.
11.9 Intellectual Property being Generated from Institutions
All three major institutions are generating substantial IP:
 Deakin has a strength in biosciences and with the IP being commercialised through
ChemGenex Pharmaceuticals (including an international operation and research
partnerships with major pharmaceutical companies) and Chirogen.
 Barwon Health has several areas of established research, but there appears to be little
commercialisation to date.
 CSIRO has an international reputation for its work in animal health and has research
and commercialisation partnerships with industry (eg vaccines).
11.10 Specialist Education and Training
Geelong has a benefit in terms of having education and training programs at Deakin
and the Gordon. In the case of Deakin its education strengths in biosciences are
strongly linked to its research specialisations.
The Gordon Institute has geared its courses to servicing regional needs in laboratory
technicians, environmental sciences, animals and pathology services. This reflects the
presence of several major employers requiring these skills (CSIRO and Pathcare for
pathology).
11.11 Connections with Larger Life Sciences Companies
Connections with life sciences companies are major drivers of regional biotechnology
clusters. While there are no current life science companies with an operation in the
region, research and development linkages have been established by the Geelong
research groups
There are some current connections with the major life sciences companies:
 Conduct of clinical trials and other research at Barwon Health41.
 ChemGenex has research linkages with major firms.
 Chirogen has investor links.
 CSIRO has commercial links for the development of animal vaccines.
41
For example there are research and trials relationships with all the major companies including Pfizer,
Novartis, Pharmacia, Eli Lilly, Merke Sharp & Dohme, GlaxoSmithKline, Sanofi, Bristol Myers Squibb.
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Geelong Biotechnology Opportunities Study
Most of the major life sciences companies have a division which manages clinical trials
and licensing groups which seek identify new research and IP that may be suitable for
development. The licensing groups are active in making contact with universities,
research institutes and companies
These existing contacts and relationships provide a foundation for developing future
research and comercialisation linkages. The further development of these linkages is
important in attracting significant research support in the future and for creating the potential
to attract a new major research centre to the region.
11.12 Commercialisation and Patenting Expertise
The Geelong market is not large enough to have specialist commercialisation and
patent expertise. However research organisations have access to the full range of
expertise in Melbourne.
At a practical level, the ChemGenex team has built up substantial business
development, commercialisation, investment and IP expertise.
The presence of this practical expertise is a major advantage, as the company is willing
to share this experience with others in the region.
11.13 Lifestyle Attractions
Geelong offers the major lifestyle advantages of a coastal city, combined with
affordable housing options, quality education and other location advantages.
These advantages are being further reinforced with the strong population growth in the
region and some of the initiatives being pursued as part of the G21 Strategy.
Geelong offers an attractive location for living and working. At the same time it is the
only significant biotechnology hub located in a regional area.
Geelong is the only significant biotechnology hub located in a regional area in Australia.
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12 A Growth Strategy
12.1 Growth Horizons
Our analysis shows that the Geelong region has the foundations on which to expand
biotechnology. This expansion would be part of a long term strategy to build the sector.
For several key reasons, the development of biotechnology in the Geelong region has
to be part of a long-term strategy. These are:
 The long cycle in biotechnology to bring new discoveries to market.
 The time taken to build research capacity and research reputations in new fields.
 A need for long term investment in research capacity and infrastructure in the region.
 The time required to build critical mass to make Geelong an attractive location for an
additional major research centre.
We see the time periods for developing the sector as covering three phases
 Phase 1 (Years 1-5) - Building Research Scale – this first phase over the next 5 years
concentrates on scaling up research activity through an expansion of research funding
and increased commercialisation.
 Phase 2 (Years 6-10) - From Research to Production - this second phase continues the
growth in research and development, while attracting related small to medium scale
production facilities (scale up and bioprocessing). The GTP site will be important as a
location for these activities.
 Phase 3 (Years 11-15) - A Regional Bioindustry Centre - this final phase spans the
period out to 2020. Geelong will have consolidated its position as biotechnology hub,
with a spectrum of activity from discovery to production, and developed to a position
where it has the potential to attract a larger scale production facility (eg
pharmaceuticals or vaccines).
These phases are summarised in the following table.
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Geelong Biotechnology Opportunities Study
Year
Major Activities
Targets
Phase 1
Year 1
2005
. Develop the biotechnology cluster and
network
Develop marketing kit
Increase total research
funding by 15% on 2003
levels
. Improve cooperative activities
. Secure additional research
funding(national and State)
. Develop a new entrepreneurs program
. Develop linkages with BioMelbourne
Network
. Develop other networking programs with
industry
Commence a business/research centre
attraction strategy
. Secure additional research funding
Years 2-5
. Establish Barwon Research
2006-2009
. Start up of Centre for Aquatic Animal
Health
Building Research Scale
. New spin-off companies
By 2009 Increase total
external research
funding by 60% over
2002/03 levels.
Increase number of
researchers
. Extend links with major international
companies(life sciences)
. Commence Development of Stage 2 of
GTP(land development)
. Continue a business/research centre
attraction strategy
. Attract/develop small/medium production
facilities (bio-processing)
Phase 2
. Attract an industry research centre
Years 6-10
. Continue expansion of research centres
External research
funding to have doubled
over 10 years.
2010-2014
. Increase commercialisation
Target 500 researchers
From Research to Production
. Attract small/medium production
. Seek to attract a major manufacturing
related facility
Phase 3
Years 11-15
2015-2019
A Regional Bioindustry Centre
. Attract a major biotechnology related
manufacturing operation
. Continue expansion of research activities
Target 800 researchers
in Geelong
biotechnology
organisations
. Increase commercialisation and creation
of successful spin-off companies
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12.2 The Strategy
The growth of biotechnology in Geelong has to be driven in the medium term (ie. the next
five years) by a “grow your own” strategy. There is need to build on the current foundations
that exist by realising the major expansion projects on currently on the drawing boards and
continuing to increase the level of research funding.
12.2.1 Local Growth
This “grow your own” strategy will build the scale of Geelong biotechnology, while
developing its reputation and industry linkages.
An attraction strategy would be commenced during Phase 1. However our expectation
is that success in attraction is more likely to be achieved in Phase 2, after further critical
mass and recognition has been built up.
This local growth strategy is driven by recognition that:
 Most emerging biotechs are linked to their founder/partner institution and are highly
unlikely to relocate.
 There are few footloose major life sciences firms currently looking to relocate their R&D
operations into a regional area. Many of the major firms that operate in Australia have
state of the art facilities that they have developed or have existing partnerships that are
likely to influence any future decisions on location.
 At a global level, substantial incentives are being provided by some countries (eg
Singapore, Taiwan) to attract research and development and manufacturing operations
in biotechnology, pharmaceuticals and other knowledge intensive industries.
This is also the case in Australia. Indeed, the operations of some of the major
pharmaceutical firms in Australia has been driven by the incentive programs associated
with the Pharmaceutical Benefits Scheme that have operated since 1988. These
programs have provided incentives for research and development, manufacture and
export by international pharmaceutical companies 42. Under the PII Program, in return
for the Government’s investment of up to $300 million, the 9 pharmaceutical companies
participating in the program committed to provide $1.5 billion in research and
development and value added production, and create more than 1,000 jobs over five
years to 30 June 2004. The new P3 Program has lead to new commitments to expand
research and development.
Rec 1
That the focus of the development strategy for the biotechnology sector in
the Geelong region be primarily on a “grow your own strategy” over the first 5
years.
42
These schemes are - Factor (f) Scheme, and its successor, the Pharmaceutical Industry Investment
Program (1999). Both programs have been open to firms who sold final products to the Pharmaceutical
Benefits Scheme and were designed to offset the impact of comparatively low prices received under the
PBS. The programs have encouraged local manufacturing, exports from Australia, increase R&D and the
establishment of partnerships with universities and research institutes. In September 2003, the Australian
Government launched the Pharmaceuticals Partnerships Program (P3) aimed at fostering partnerships
between multinational firms and local players. Successful applicants will be reimbursed 30 cents for every
extra dollar they invest in local research. The Government will offer A$150 million over five years from 2004
and expects to attract A$500 million of new investment in research and development.
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12.2.2 Strategy Overview
The following diagram summarises the growth strategy within the context of the
process for development of a biotechnology product. The value of the IP produced by
research activity increases as the product gets closer to the market.
The objective of the Geelong biotechnology strategy is to consolidate Geelong’s
research position and move Geelong along the value chain so that by 2015 it will be in
a position to attract a manufacturing operation, having built up substantial research
infrastructure and a significant commercialisation portfolio.
Concept
Development
Product
Development
Production &
Distribution
Increasing cost
Increasing value
Discovery
Proof of concept/prototype
IP Protection
Regulatory compliance
Preclinical/clinical field trials
Scale up
Manufacturing
Marketing and distribution
Build industry partnerships
Govt funding
Venture capital
Investors
Partnerships
Licensing
Geelong Now
Geelong 2010
Geelong 2015
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Geelong Biotechnology Opportunities Study
12.2.3 Components of the Strategy
The growth strategy that we are recommending has a number of dimensions. These
are summarised below and discussed in detail in the rest of this chapter.
Expanding the current
research base
Increasing
commercialisation of
research
Increasing research funding
Developing industry
linkages and partnerships
Marketing Geelong's
biotechnology capability
Expanding research
infrastructure
Creating successful spin-off
companies
Attracting a major player –
research centre or
manufacturing operation
Marketing Capability
Building research
cooperation
Attracting a new research
centre
Increasing
commercialisation of
research
Developing Skills
Networking
Developing industry
linkages and partnerships
Developing research skills
Creating a local network
Creating successful spin-off
companies
Developing
commercialisation skills
Creating linkages with
biotechnology and industry
organisations
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Geelong Biotechnology Opportunities Study
This strategy is consistent with the broader State Biotechnology Strategy being
implemented by the Victorian Government43.
“The specific aim of the Victorian Government is to facilitate the development of
biotechnology to deliver economic, social and environmental benefits to all Victorians. It
does this by establishing a robust regulatory framework to ensure that ethical and safety
standards are met and the community is well informed and confident about the directions of
the industry. Developing networks and connections to bring people, research and ideas
together. Investing directly in new infrastructure, research and skills development in
partnership with industry and the research community. Encouraging and facilitating new
local and international investment. Promoting Victoria and the industry internationally. “
Biotechnology 2004 Strategic Development Plan for Victoria 2004 P10
Rec 2
That the development strategy outlined in this report be adopted as the
long term regional biotechnology plan for the Geelong and the broader G21
Region.
Rec 3
That Geelong City Council seek endorsement of the report from the
research organisations and other major stakeholders and support for its key
directions.
12.3 Expansion of the Current Research Base
Three of the key research organisations – Deakin, Barwon Health and CSIRO have
plans in place to expand the level of research activity.
There is a need to continue to scale up the research base in Geelong and this is a key
component of the development strategy.
Rec 4
That a major focus of the strategy be on scaling up the biotechnology
sector in Geelong through securing increased research funding.
12.3.1 Deakin University
Deakin has been very successful in the last five years in securing competitive funding
for research. Total research income has increased from around $5 million in 1998 to
$17 million in 2002 and was estimated at $22 million in 200344.
Over this period, the Science and Technology Faculty increased funding from $2.3
million to $7.5 million. Major areas of growth have been in Engineering & Technology
and Ecology & Environment. External research funding for Biological and Chemical
Sciences increased by $1 million over the 4 years.
It is also securing some funds from most of the major sources including Rural R&D
Corporations.
43
44
Biotechnology 2004 Strategic Development Plan for Victoria 2004
Information from Deakin University
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Geelong Biotechnology Opportunities Study
Table 25. External Research Funding Science & Technology Deakin Uni 1998-2002 ($)
Area
Science &
Technology
Architecture &
Building
Biological &
Chemical Sciences
Ecology &
Environment
Engineering &
Technology
Information
Technology
Total Deakin
1998
1999
2000
2001
2002
2,279,790
3,488,923
4,176,044
5,627,323
7,542,784
37,722
67,695
128,583
39,240
149,263
836,683
1,458,018
1,458,478
1,972,386
1,867,675
729,426
656,284
909,824
1,587,248
2,318,312
637,792
1,114,761
1,479,401
1,968,168
3,019,586
38,167
192,165
199,758
60,281
187,948
4,908,292
7,103,169
10,345,940
14,415,759
17,150,682
The expansion of research funding will need to be secured from: increased success
with national competitive grant applications including ARC and NHMRC; increased
funding from the national rural R&D corporations; increased industry funding ;
increased contract research; and collaborative projects with other research
organisations. (eg Deakin/CSIRO; Deakin/Barwon Health).
There also needs to be a continued pursuit of funding from the Victorian Government
programs. Deakin has been successful with recent funding proposals and has secured
funding under a recent STI round.
Deakin has a well-structured Office of Research that assists researchers with funding
applications. The recently created BioDeakin is also providing a framework to focus
efforts across the campuses and to develop stronger external relationships with
industry and other research organisations in the field of biosciences.
12.3.2 Barwon Health
Barwon Health has a commitment to expanding its research activity through the
development of Barwon Research and the extension of clinical trials 45.
The bulk of the pharmaceutical industry’s expenditure on R&D in Australia is
concentrated on clinical trials. Australia has several advantages when it comes to
clinical trials: an ethnically heterogeneous population; high quality researchers;
hospitals and universities prepared to participate in this type of research; availability of
good statistics (and statisticians) to allow follow up of medical treatment; good adoption
of IT strategies to assist with trial management; and a relatively low cost structure.
All of this means that clinical trials can be conducted in Australia to a high,
internationally accepted standard at a relatively low cost.
Industry funded pharmaceutical R&D in Australia is approximately $250 million per
annum and clinical trials account for at least 40 per cent of this spending, indicating a
market worth more than $100 million per annum.
45
Clinical trials represent a significant component of research income. Data provided by Barwon Health
shows that income from clinical trials was around $300,000 in 2003/04
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There has been a steady increase in the number of clinical trials undertaken in
Australia throughout the last decade.
Chart 10.
Clinical Trials in Australia (TGA Notifications)
12.3.3 CSIRO
The Australian Centre for Aquatic Animal Health is a proposed national research facility
to develop and protect Australia’s growing aquaculture industries. The centre is
currently going through a series of internal feasibility studies at CSIRO.
The establishment of the Centre would make Geelong a national centre for aquaculture
research and provide for linkages with Deakin University which has research and
teaching in related areas and the PIRVic Marine and Freshwater Resource Institute 46.
It would make a contribution to increased researcher numbers, including national and
international visitors to the site.
This project involves the development of a national research facility in an emerging
industry. Australian aquaculture is forecast to become a $3 billion industry by 2010.
Research support in aquaculture is one of CSIRO's Flagship projects. 47 The
aquaculture project of the Agrifood Top 5 Flagship Program aims to transform the
international competitiveness of Australian agrifood and to add $3 billion per annum
through innovative agrifoods and processing technologies. One part of the program is
focused on using advances in reproductive biology to boost the productivity of
aquaculture systems.
The Centre will offer a biologically-contained aquaculture facility for the study of
diseases of animals including marine and fresh water shellfish, molluscs and
crustaceans.
The Centre would use CSIRO’s Australian Animal Health Laboratory’s existing
capabilities in bio-containment and fish disease research and would involve the
construction of secure aquarium facilities.
46
There would be a significant aquaculture cluster in the G21 Region, with CSIRO, PRIVic Marine and
Freshwater Resource Institute at Queenscliff and Deakin’s interests in aquaculture.
47
CSIRO has introduced a series of Flagships Projects - Preventative Health, Light Metals, Healthy Country
, Agrifood Top 5 , Ocean Wealth, Energy Transformed
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The Centre would be a national facility and have the opportunity to develop
international projects in disease control and improvements in seed stock.
The establishment of the Australian Centre for Aquatic Animal Health, would position the
G21 Region as a leading location for aquaculture research and development. It provides the
opportunity to substantially expand on the current level of capability and is a priority
biotechnology project.
12.4 Increase Commercialisation of Research
There is a need to move Geelong biotechnology along the commercialisation chain.
This will involve:
 Continued expansion of the current Deakin companies and their activities.
 Creation of new spin-off firms in technology areas with high growth potential (at Deakin
and the other research centres).
 Development of linkages with the venture capital funds and other potential investors.
 Further developing linkages with the major life sciences companies.
 Continued development of opportunities in relation to animal health and aquaculture
through CSIRO.
While there are few firms in Geelong compared with those located in the biotechnology
precincts in Melbourne, significant progress has been made48.
In addition, CSIRO in Geelong has commercialisation experience and employs a
Business Development Manager. This manager is looking for new opportunities and
has the ability to draw on the broader commercialisation expertise that exists within
CSIRO.
The new Flagships Program and other CSIRO strategies are focused on developing
more industry linkages and commercialising research.
A major direction of Australian Government policy as reflected in Backing Australia’s
Ability 2 Statement is on extending industry linkages of research institutions and
increasing the contributions to research funding by business .49
Achieving increases in commercialisation in Geelong will require the development of
commercialisation and business management skills. There is the potential to develop
skills within the sector by drawing down on the commercialisation and business skills
that already reside in ChemGenix and Chirogen. These firms have indicated a
willingness to share their experience with others in the region.
Some structured programs will be required to develop these skills, and these are
discussed later in this report the section on skills development.
48
The development of ChemGenex is an example of what can be achieved where good research and
discovery is combined with commercial skills.
49
Backing Australia’s Ability – Building our Future through Science and Innovation is a new package totalling
$5.3 billion over seven years from 2004-05. This package, announced by the Prime Minister on 6 May 2004,
builds on the initial 2001 Backing Australia’s Ability investment of $3 billion over five years to 2005-06. See
http://backingaus.innovation.gov.au Programs are focused in 3 areas- Strengthening Australia’s Ability to
Generate Ideas and Undertake Research, Accelerating the Commercialisation of Ideas, and Developing and
Retaining Skills.
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Increased commercialisation of research is fundamental to the future growth of the sector.
Rec 5
That a major focus be placed on increasing commercialisation of research.
12.5 Research Cooperation
There is considerable potential for an increased level of cooperation among the major
Geelong biotechnology players. Our consultations have highlighted a number of links.
These range from informal links, through education and training to the sharing of some
equipment and facilities.
The G21 process has brought together the CEOs of the key institutions, and has
created a willingness to explore new areas of synergy and cooperation. As the growth
of the sector has continued, the level of interaction has increased.
Future cooperation should include:
 Expanded education and research training linkages.
 Development of joint projects research and development projects (in areas including
health, drug therapies and aquaculture).
 Scoping of the potential for new joint research programs, the identification of funding
sources and the preparation of joint applications.
Greater research cooperation is fundamental to growing the biosciences sector in Geelong.
Rec 6
That a major emphasis be placed on increasing research collaboration
and joint projects among the research organisations in Geelong.
12.6 Attracting a New Research Centre
A medium term objective for the Geelong Region is to attract or establish a regional
research centre linked to one of the major life sciences companies.
The potential for such a centre will emerge as biotechnology activity in Geelong scales
up and there is a progression from existing research partnerships.
The development of a biotechnology “pod” within the GTP site development would
provide a suitable location that is linked to Deakin’s facilities.
We rate the securing of a major centre as a medium term proposition. It is more likely
to emerge as a result of scaled up research activity and the establishment of successful
partnerships which progress to a company deciding to set up an operation with its own
researchers.
Dealing with international firms also raises the issue of location incentives. Current
government policies in relation to the PBS have influenced pharmaceutical companies
in their decisions to operate in Australia, both for research and development and for the
manufacture of products.
Worldwide there is intense competition to bring global firms into research and
technology precincts.
Developing an attraction package for a major research centre is beyond the resources
of an individual university and would require financial inputs from State and
Commonwealth Governments and some involvement of local government.
As noted earlier, a number of factors drive site location. These include availability of
skilled researchers, existing linkages with research institutions, availability of suitable
sites and infrastructure.
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In our view there is a need to grow sector before this becomes a real option. The
development on the industrial sites within GTP would also be important to attract a
major centre.
There is a need to broaden the knowledge of Geelong and its biotechnology capability
with current industry research partners. The active promotion of the region’s capability
and assets will also be important.
Attracting a new research centre should be a medium term goal for the strategy.
Rec 7
That the attraction of a major new research centre be established as a
medium term goal for Geelong.
12.7 Developing the Skills Base
Research, innovation and commercialisation skills are fundamental to the development
of the sector. Future skills development will require:
 Expansion of teaching and research training in biosciences at Deakin.
 Creation of greater linkages between Deakin and Gordon Institute in the development of
relevant training programs.
 Small business development program geared to science based industries - a program
based on short courses in commercialisation and business development for
researchers.
 Young entrepreneurs program – a new program for selected young researchers from
Deakin, CSIRO, Barwon Health, and PRVIC, including a mentoring program covering
commercialisation and business development.
A key to commercialisation is to expose researchers early in their careers to a range of
innovation skills and to equip them with an understanding of the process of bringing
discoveries to the market.
Geelong has the right foundations for developing these programs. It has high quality
education and training institutions (that cover science, business, and law) with the
capability to develop these programs. It has several successful spin-off companies that
are willing to be involved in transferring commercialisation knowledge to the next
generation of scientists.
While the initial focus of the programs would be on biosciences, the courseware has
the potential to be adapted to other sectors (eg engineering, ICT )
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Geelong has the capacity to develop and deliver these skill development programs. To
achieve ongoing critical mass for these programs, they could also be offered to
organisations based in the Werribee Research Precinct.
In creating these programs the proposed Geelong Biotechnology Network may also be
able to take advantage of Victorian Government initiatives.50
Special programs are required to develop commercialisation skills.
Rec 8
That special regional programs be established to develop
commercialisation and business skills within the biosciences sector in
Geelong. These programs should be developed by the proposed BioGeelong
Network.
12.8 Developing Research Infrastructure
Substantial investment in research infrastructure is included in the medium term plans
of the major institutions in the Geelong Region.
 Deakin Campus development – the university has long term plans to develop Waurn
Ponds as a science and research campus, with the transfer some of the commerce,
humanities and health teaching to new sites at the Waterfront Campus.
 Geelong Technology Precinct. – is an initiative to develop a major innovation industries
park on land owned by the Deakin University. Internal feasibility studies have been
completed, with the next stage involving the University taking a decision to hold
discussions with potential commercial partners. The exposure to development partners
will allow for a testing of the market and will help determine the industry targets and the
staging of the development. GTP is the prime location for any expanded biotechnology
activity in the region.
 Barwon Health – is redeveloping its hospital precinct, with plans to better link its current
research activities. This is the first stage of a plan for the creation of “Barwon
Research” as a virtual research entity that clusters research in a similar way to the
Baker Institute.
 CSIRO has plans for substantial investment in its research facilities located at AAHL,
including the development of the Australian Centre for Aquatic Animal Health.
As part of the development of the biotechnology network for Geelong, specific opportunities
for new infrastructure can be scoped and funding sources identified. This also includes
funding for development of the GTP.
Rec 9
That as one of the early projects of the BioGeelong Network an
assessment be made of future infrastructure needs to expand the
biotechnology sector in Geelong.
Rec 10 That the GTP be recognised as a key infrastructure project that is
fundamental for the future development of biotechnology in the Geelong
Region, including the attraction of research centres and production facilities.
50
The Victorian Government has programs to develop commercialisation skills. These include VicStart, the
Victorian Government's new commercialisation-focused program under the Science, Technology and
Innovation (STI) Initiative – Second Generation; creating an Entrepreneur in Residence program in local
organisations, including venture capital firms institute/university technology transfer offices and biotechnology
companies; continue support for the Young Achievement Australia Biotechnology Entrepreneurs program for
postgraduate biotechnology students. See Biotechnology 2004 Strategic Development Plan for Victoria 2004
P28
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12.9 Attracting a Biosciences Manufacturing Operation
12.9.1 Scale up Facilities
In Australia there are few opportunities for scale-up and many of the 300 biotechnology
companies in Australia are likely to have trouble finding scale-up facilities for fine
chemicals.
There is also a need in Australia for fine chemicals training for medium sized scale up.
There is scope for offering scale up training and provision of process chemistry.
For example in Geelong, Chirogen's operation is small scale. According to the research
leader, Professor Dakterneiks, more people will be interested in his technology
internationally if scale-up processing could be demonstrated.
Deakin University and biotechnology firms that located in the GTP could use the
infrastructure of a scale-up facility.
The development of small/medium scale bioprocessing is a major opportunity for
Geelong.
These issues have also been identified in the Victorian Government’s 2004
Biotechnology Strategy.
Pilot-scale manufacturing
“The translation of biotechnology research into products in the medical and agricultural fields
occurs through the manufacture of small molecules, such as aspirin, or large molecules
derived from bioprocessing, such as insulin.
Bioprocessing is the production of material including protein based medicines, agricultural
products and enzymes for industrial purposes using biological systems such as yeast,
bacteria, mammalian cells and insect cells.
While Victoria has some capacity in bioprocessing and pilotscale manufacture, it is
fragmented. The greatest need is for pilot-scale Good Manufacturing Practice capability to
complete pre-development activities and to commence formal product trials.
A study commissioned as part of the 2001 Plan found there is a local and international
shortage of bioprocessing capacity. If this shortage continues, access by companies
wanting to commence formal trials will become difficult and more expensive. There are a
number of benefits to be gained from building capability in bioprocessing. It would help
Victoria capture the benefits of its research infrastructure and develop more cost effective
methods for the manufacture of biological products.”
Source: Biotechnology 2004 Strategic Development Plan for Victoria 2004 P28
Rec 11 That the feasibility of developing regional scale up facilities at the GTP be
investigated by the BioGeelong Network.
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12.9.2 Good Laboratory Practice Facilities
There is a need to develop a pilot-scale Good Manufacturing Practice (GLP) capability
for the completion of pre-development activities and to commence formal product trials.
Development of GLP laboratories for student and industry use would enhance Deakin’s
capability.
The establishment of these facilities would increase biosciences activity in Geelong, but
would need industry partners to establish and operate.
Rec 12 That the feasibility of developing GLP facilities at the GTP be investigated
by the BioGeelong Network.
12.9.3 Large Scale Manufacturing Operations
Attracting a large scale manufacturing operation is a long term initiative, and to achieve
this would require a substantial expansion of the biotechnology sector in Geelong51.
Manufacturing attraction would require a demonstration of the business case for
location in Geelong and finding a footloose company or one that is looking for a new
location.
In the case of pharmaceuticals, it is a $5.8 billion industry that employs 13,880 people,
has exports of $2.3 billion and imports of $4.7 billion.
In Australia there are currently at least 10 companies (both local and multinational), that
operate at least one secondary manufacturing facility supplying local and export
markets. These include Fauldings, Bristol-Myers Squibb, GlaxoSmithkline, Pfizer,
Pharmacia, Sigma, Roche, Alphapharm, Merck, AstraZeneca and Schering-Plough.
Table 26. Pharmaceuticals Industry in Australia
51
Victoria has secured a number of manufacturing facilities or seen expansion since 2001. GlaxoSmithKline
- has opened a new $13m fine chemicals facility at its existing Port Fairy site; Vital Biotech, the first
Australian biotechnology company to list on the Hong Kong Stock Exchange, is investing $3m in a new
manufacturing facility; The Institute of Drug Technologies (IDT) is investing $2.5m in new manufacturing;
Mayne has announced a $45m expansion of its facilities in Mulgrave; Cardinal Health will spend $6m
expanding its facility at Braeside facilities. Biotechnology 2004 Strategic Development Plan for Victoria 2004
P16
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Australia also has significant generics manufacturing sector52. Generics manufacturing
(is generally lower cost manufacturing relying on R&D developed by the parent
company and requiring less formulation work and bio-equivalence studies to prove
comparability to the originator brand. A plant can be designed for short runs of niche
products, so that it is not necessary to dedicate production lines to single products for
extended periods of time.
At present Geelong would not present as a suitable location. There are other sites that are
more attractive.
Sydney is home to the headquarters, research campuses, manufacturing and distribution
centres for a number of the large pharmaceutical companies. Site location factors for
manufacturing operations include good access to highway networks, good utilities and
access to a skilled workforce.
For example, Australian Pharmaceuticals, an Australian distributor and contract
manufacturer, has built a new state of the art facility at Parramatta in Sydney. Key
determinants were logistics including site suitability, a metropolitan location, access to
the M5 and the ability to recruit a skilled workforce
The attraction of a manufacturing facility is a longer term project, and is more likely to
grow out of an expanded research and development relationship where the quality of
research and the business environment have been demonstrated to a specific
company.
This process will depend upon increased recognition of the regional capability by
industry and also by the State and Commonwealth agencies (Invest Australia) involved
in investment attraction.
The nature of the industry and the fact that it is a sought after activity (because it is seen as
a knowledge based growth industry offering high quality jobs), means that influencing an
investment location decision is likely to need substantial investment incentives.
Governments in most potential biotechnology centres are now offering major incentives to
attract research and manufacturing facilities.
Rec 13 That the attraction of a major biosciences related manufacturing operation
be pursued as long term goal for Geelong.
52
Generics manufacturers include Sigma - Australian owned, Alphapharm - owned by Merck KgaA and
GlaxoSmithkline
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12.9.4 Small and Medium Scale Manufacturing Operations
While the development of a large scale manufacturer is a long term objective, there is
potential for the development of smaller scale manufacturing operations. This may
grow out of current research partnerships. Areas of development could include
chemicals, devices or specialist pharmaceuticals.
Case Study: Biotechnic
In the course of this project we came across a small company, Biotechnic that has two
employees it manufactures and distributes pharmaceutical hoses with full traceability and
low leachability for use with processing vessels, and pilot plants for processing blood
products such as transferrin, immunoglobulins and clotting factors that include cellulosebased affinity and ion-exchange chromatography media and systems. Biotechnic also
makes a food-grade hose and has more than 100 clients, including international customers.
The owner/inventor has also developed a process for manufacturing chromatography media,
which he has patented with his US partners. A planned scale up is planned which will
require a new factory location in Geelong.
Rec 14 That the attraction of a smaller scale biosciences related manufacturing
be pursued as a medium term priority for Geelong.
12.10 Marketing of Geelong Capability
There is a need to build recognition of biotechnology in Geelong. Research conducted by
Buchan as part of this project shows that biotechnology activity in Geelong is not well
recognised.
The G21 Region (measured by the total number of researchers and research
expenditure) is the number seven biotechnology precinct after Werribee. However
Geelong is not recognised as one of the precincts in the State Government‘s
promotional material.
This reflects a number of factors including: the emerging industry status of
biotechnology in Geelong (the major expansion at Deakin has occurred over the last
five years); the scattered location of the facilities, meaning that it is a virtual cluster
rather than a physical precinct; and the fact there are only two spin-off companies at
this stage. These all contribute to a view of Geelong biotechnology as an infant
industry.
The marketing needs to:
 Position Geelong as a biotechnology hub and the only regional biotechnology centre in
Australia
 Build recognition of the region’s centres of excellence in research
 Develop an awareness of its strengths as a biotechnology hub
 Highlight the region’s biotechnology capability.
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While the development and implementation of a marketing strategy will not in itself generate
substantial new investment or research funding, it is important in shaping the future for
Geelong in biotechnology.
The marketing strategy would have a number of elements:
 Development of marketing kit for use in city promotion and use by the major
biotechnology organisations.
 A planned program to promote the biotechnology capability to potential research
partners.
 Promotion of projects and opportunities to potential investors.
 Building political recognition of Geelong and its potential in biotechnology.
 Using industry networks (including Ausbiotech and BioMelbourne Network) to develop a
broader recognition of research activity and commercialisation potential of Geelong
institutions.
 Lobbying governments to support strategic development initiatives.
Rec 15
That a biosciences industry marketing program be implemented for
Geelong Biotechnology.
Rec 16
That Greater Geelong City Council take the lead in developing the
marketing materials.
12.11 Networking
12.11.1 Assessing the Need for a Network
There is already considerable interaction occurring between the Geelong based
organisations. This occurs on both a formal and informal level.
There are existing research, education and training links between each of the major
organisations. At the same time there is contact between some of the research leaders.
In assessing whether there is a need for a more formal network, a number of issues
were examined. There are a number of key questions, the answers to which will
determine the nature of the networking organisation that is required.
 Is the current level of interaction sufficient?
 What level of interaction/coordination is required to implement the regional
biotechnology development strategy?
 Could the strategy be implemented without a new mechanism for program
development, coordination and implementation?
 Is there a need for more formal networking structure or cluster program?
 What organisations would need to be involved in the network or cluster?
 Could one of the existing organisations take on the role of coordinator for the sector?
We addressed each of these questions in our analysis and our findings are
summarised below.
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In summary our analysis points to the need to develop a formal cluster arrangement to work
on some of the broader industry development programs that are identified in this report. In
the absence of such an organisation, limited progress is likely to be made.
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Key Question
Major Issues
Key Requirements
Is the current level of interaction
sufficient?
There is significant interaction currently occurring.
Greater structured interaction is needed on long term industry
development.
What level of
interaction/coordination is required
to implement the regional
biotechnology development
strategy?
Need for high level of interaction among the major players.
Need for some new industry programs to be developed covering:
Major requirement is to secure additional funding for research
and for infrastructure development.
- Research funding
There is a need for more interaction on industry development
issues, emerging research opportunities and cooperation
- Infrastructure development
- Involves organisations pursuing their own R&D agendas.
- Commercialisation
- Also involves joint activities eg. research projects.
- Regional marketing
Expansion of commercialisation activity.
Development of a commercialisation skills program.
Marketing of Geelong as a biosciences location
Could the strategy be implemented
without a new mechanism for
program development, coordination
and implementation?
Geelong has advantage of substantial resources at several of
the major institutions ( Deakin and CSIRO), involved in business
development and research funding.
Need for a vehicle to work on strategy, coordinate implementation,
and assist the key biotechnology players, with expansion programs.
Strategy requires a range of programs – skills development,
commercialisation, industry marketing, and business attraction
that are beyond the scope of the individual organisations.
People are busy pursuing their own activities and do not have
resources to apply to industry/regional initiatives.
A committee structure without any executive support would lead
to ideas but little implementation.
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Key Question
Major Issues
Key Requirements
Could
one
of
the
existing
organisations take on the role of
coordinator for the sector?
There are a number of options: City of Geelong Economic
Development Unit, Deakin University - BioDeakin, Committee for
Geelong, G21 Secretariat.
Existing organisations could not take on the role.
Geelong City – not structured to manage and implement a
specialist industry program. Also part of the strategy may at
times be involved in lobby the City on issues
Current organisations do not have the specialised resources.
Separate entity is required to interact and support all organisations.
An element of “independence” is required to ensure the trust of all
organisations.
BioDeakin – is a unit of Deakin, difficult for it to play a broader
regional industry development role.
Committee for Geelong – has limited resources for program
implementation. More focused on industry strategy issues.
G21 Secretariat – is moving to a project implementation role.
Working across a wide range of policies. It is not necessarily
structured for detailed specialist program implementation.
A separate organisation needs to play the coordination role. It
needs to be able to work with all of the organisations – facilitate
collective action, provide support to the individual members, and
broker joint research and business opportunities.
It has to have the confidence, respect and trust of all of the
major biotechnology organisations in the region.
Is there a need for more formal
networking structure or cluster
program?
A formal cluster would provide a vehicle for developing
cooperation, identifying new opportunities and creating new
industry development programs.
Geelong Biotechnology Network (BioGeelong) is the recommended
model
Network would act as facilitator and have staff resources.
It would provide the resources and the executive time to develop
and implement specific programs.
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Key Question
Major Issues
Key Requirements
What organisations would need to
be involved in the network or
cluster?
Membership would include core biotechnology members and
regional and business supporters:
Membership would comprise 3 categories:
- Core Members
Core Membership:
Deakin University/BioDeakin
Barwon Health (research)
CSIRO/AAHL
PRVIC Marine Sciences Centre
Geelong Technology Precinct
Chirogen
ChemGenex Pharmaceuticals
Gordon Institute
Suppliers
Membership would be extended to include customers and suppliers
to the sector
Regional/Business Support
- Suppliers/Customers
- Regional and Business Supporters
G21 Councils
Committee for Geelong
Australian Industry Group(has an interest in biotech)
VECCI
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12.11.2 Benefits of a Cluster
As we have seen, there is a current group of research organisations that form the basis
of an industry cluster in biosciences in Geelong.
The following are some of the benefits of creating a more formal cluster organisation.
The cluster can stimulate interactions between the organisations, enable best practice
to be diffused and can identify new innovation opportunities (that individual
organisations may not be able to identify on their own).
For the cluster to be effective it needs to have a real and meaningful agenda and a
series of programs that it is facilitating.
It must deliver value to the members that cannot be realised through their own
individual efforts or through the current informal links.
Key Requirements for a Cluster
Benefits
Diffuse best practice
Create critical mass
Requirements
Cannot be an artificial construct
Needs to have a real foundation
for cooperation
Management
Needs active management
Identify and pursue new
opportunities
Interactions create
dynamism
Complementarities, synergies,
exploitation of opportunities,
shared costs/facilities
Formal networks/informal
associations/joint ventures
Activate – leverage existing
assets and associations
Stimulate innovation
opportunities
Facilitate
commercialisation
Focus on achieving outcomes
Facilitate new partnerships
12.12 A Geelong Biotechnology Cluster
“ The 2004 Strategy shifts the focus of the State’s efforts further along the value chain. The
overarching theme of the 2004 Strategy is connectivity: building greater alliances,
partnerships and connections within science and technology sectors (agricultural, medical,
environmental, chemical, nanotechnology, informatics and devices). These linkages are
important to build critical mass locally, to facilitate international partnerships, to leverage
other governments' investments in science and technology and to 'leap-frog' competitors.”
Biotechnology 2004 Strategic Development Plan for Victoria 2004 P 24
Our analysis indicates the need for an organisational structure to deliver the regional
industry development strategy. The foundations of this cluster are already present in
Geelong.53
This new organisation would be BioGeelong - the Geelong Biotechnology Network.
Rec 17 That a Geelong Biotechnology Network (BioGeelong) be established as
the vehicle for delivering the regional biotechnology strategy.
53
This section scopes the nature of the Network. There is still a need for a business plan for the Network to
be prepared, as a separate exercise.
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12.12.1 Objectives and Activities
BioGeelong would have the following key objectives:
 Facilitate an expansion in research funding for biotechnology in the region.
 Assist with the development of new regional, national and international business
partnerships.
 Encourage greater commercialisation of research.
 Assist in the expansion and development of biotechnology infrastructure.
 Assist in the marketing of the Geelong region’s biotechnology capability.
The cluster organisation would be the main vehicle to assist the delivery of the strategy
identified in this report.
The following table outlines the objectives and examples of the types of activities that it
would be involved.
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Geelong Biotechnology Opportunities Study
Objectives
Examples of Activities
Facilitating an expansion in research funding
going to Geelong organisations
Assist with the development of new regional,
national and international partnerships
Encouraging commercialisation activities
Assist in the development of
infrastructure
Assist in the marketing
biotechnology capability
biotechnology
of
regional

Encouraging interchange of ideas among the
network members

Conducting innovation
research synergies

Assisting in the development of joint research
programs

Identification of new funding opportunities and
development of proposals

Assisting in lobbying of governments for research
support

Researching potential industry partners

Working with network members in developing
partnership proposals

Identification of ways of leveraging current industry
partnerships

Advice to network members on business partnership
development

Creation of linkages with industry organisations (eg
BioMelbourne, Ausbiotech

Development of an industry briefings program

Advice on applications for funding under government
programs (Commonwealth and Victoria)

Brokering of relationship between Geelong research
institutions and other organisations

Development of commercialisation training programs
for the industry

Work with GTP on identification of biosciences
tenants for the Stage 2 development

Secure support for other expansion initiatives (eg
Deakin Science Campus; CSIRO expansion)

Development of Geelong Biotech Marketing Kit

Promotion of Geelong Capability(with Councils and
other groups)

Assist organisations in developing their promotional
information

Development of a Geelong Biotechnology Directory

Coordinate
media
coverage
Biotechnology stories (working
members)

Promote Geelong capability to major government
agencies
workshops
to
explore
of
Geelong
with network
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12.12.2 Membership of the Cluster Organisation
Membership of BioGeelong would comprise three categories:
 Core Biosciences Members
 Suppliers/Customers
 Regional and Business Supporters
A list of potential members is outlined below.
Table 27.
Potential Members BioGeelong
Core Membership
Suppliers
Regional/Business Support
Deakin/BioDeakin
Biotechnology users
G21 Councils
Barwon Health (research)
Suppliers –products/services
Committee for Geelong
CSIRO
Australian Industry Group
PRVIC Marine Sciences
VECCI
Geelong Technology Precinct
Chirogen
ChemGenex Pharmaceuticals
Gordon Institute
12.12.3 Resources
Initially the network would have one staff resource. The role of this person would be to
develop the key programs and implement the business plan for the network.
A collocation with one of the member organisations would allow for some administrative
support to be provided by a host organisation.
There are several options for staffing:
 Recruitment of an executive officer
 Secondment of a person from one of the member organisations
 Appointment of a consultant (for a period of up to one year) to provide interim
management and to set up of the network and its initial programs.
The person or organisation selected would need to have a number of skills:
qualifications in science, particularly biosciences and business; an understanding of the
biotechnology sector including research and commercialisation; experience in
establishing and implementing business development programs; experience working
with business and research networks; and an ability to develop relationships with
research based organisations and businesses.
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12.12.4 Location
There are a variety of locations that could be the base for the Network Office. These
are: Geelong Economic Development Unit, G21 Secretariat, and Geelong Technology
Precinct.
The GTP location would provide the strongest linkages to the biotechnology sector in
Geelong and would be the preferred location.
Rec 18 That the BioGeelong – the Geelong Biotechnology Network be located at
the GTP.
12.12.5 Funding the Network
As part of the development of a business plan, a full operational budget would need to
be prepared. Funding could be obtained from:
 G21 Council contributions, with the main contribution from the City of Greater Geelong
 Core Members contributions
 State Government Funding - IIRD’s Regional Innovation Clusters Program
Rec 19 That the funding for the Network includes member contributions as well as
funding from relevant government programs.
12.12.6 Governance of the Network
A governance model for the network organisation would be developed as part of the
detailed business plan.
This would cover organisational structure (including advisory board.), management
reporting and financial controls.
12.13 External Linkages
There is a need for Geelong to strengthen its linkages with a number of government
agencies and industry organisations. These are outlined below.
The Network would target these organisations in collaboration with Network Members
to build stronger recognition of Geelong and to develop new ideas for support 54.
54
Geelong has the SmartGeelong Network, which mainly promotes the education, training and research
capabilities of Geelong. Formed in 1999 , it is an initiative of the Geelong Chamber of Commerce and
receives financial support from the City of Greater Geelong, the Australian Government and individual
member organisations. www.smartgeelongnetwork.com.au
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Organisation
Industry Organisations
BioMelbourne Network
Ausbiotech
Government Agencies
Biotechnology Australia
Invest Australia
Austrade
Description
Business network based at
Committee for Melbourne.
Involved in international business
development , international
marketing and industry programs
Membership based organisation
(CEO level)
National industry association
representing biotechnology
Members cover business,
researchers and education
Acts as national voice on policy
Provides links to businesses,
investors, research institutes
E-newsletter to 1300 persons
Opportunities to present at
industry seminars
Participation in business
missions
Participate in seminar programs
Content into magazine
Participation in international
programs
Commonwealth Agency
responsible for biotechnology
policy
Commonwealth Agency Involved
in attraction of international
investment to Australia
Has a specialist unit covering
biotechnology
Commonwealth Agency
responsible for trade facilitation
Has a specialist unit focused on
biotechnology
Build awareness of Geelong
capability
Regional Development Victoria
(IIRD)
Agency responsible for regional
development in Victoria. Includes
location subsidies for new
investors
Office of Science and
Technology (IIRD)
Agency responsible for delivery
of science programs , including
delivery of biotechnology sector
development funding
Provides research funding
National Competitive Grants
Agencies - ARC, NHMRC etc
Linkage
Create awareness of Geelong
capability
Develop case for Geelong as an
investment location
Create awareness of Geelong
capability
Participation in Austrade
seminars and mission (inwards
and outwards)
Investment incentive packages
for attraction of new investors (eg
Companies to GTP)
Other regional program funding
(including cluster support)
Develop senior level links to
strengthen case for research
/commercialisation support to
Geelong biotechnology
Geelong researchers have
existing links through applying for
funds.
Rec 20 That the Network establishes links with key industry organisations and
relevant government agencies.
12.14 BioMelbourne Network
The BioMelbourne Network has indicated that it is keen to become involved with
Geelong. There are opportunities to participate in the industry seminar series to present
Geelong biotechnology. There is a strong awareness of Geelong through the Director’s
past involvement with Deakin University.
The Network was established by the Committee for Melbourne following a 1998 report
by the Boston Consulting Group. The network is modelled on similar networks in
Boston and San Diego and is designed to be a trade development and business
investment attraction agency focusing on the Melbourne and Victorian biotechnology
sectors. It has received seed funding from the Victorian Government. 55 It is a
membership based organisation.
BioMelbourne Network undertakes the following activities:
55
In November 2003, the Victorian Government announced $750,000 funding for the BioMelbourne Network
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Geelong Biotechnology Opportunities Study
 Investment attraction and business development;
 Marketing and promoting Victoria as the Australian Biotechnology capital, both
nationally and internationally;
 Biotechnology industry development programs; and
 Joint activities with stakeholders including the Committee for Melbourne, Victorian
Government and AusBiotech.
12.15 Linkages with Werribee Technology Precinct
Linkages between Werribee and Geelong need to be explored in more detail. There are
some potential synergies and the basis for research cooperation.
At the same time some of the commercialisation development programs to be
developed by the proposed Geelong Network, could include participants from the
Werribee Technology Precinct.
The Werribee Technology Precinct (WTP) covers 925 hectares and includes branch
campuses of The University of Melbourne and Victoria University of Technology, R&D
providers and providers of contract research. The total workforce of about 350 is mainly
employed in several larger research organisations.
The Precinct has a strong animal biotechnology base through the Victorian Institute of
Animal Science and the School of Veterinary Science of the University of Melbourne.
Victoria Institute Biotechnology (VIB) The VIB is a joint venture between the Austin
Research Institute and Victoria University located at the University’s Werribee campus.
To differentiate VIB from Melbourne (Parkville, Monash strip) where biotech has a
heavy emphasis on the research side, the VIB is aiming to position itself about midway
between a research institute and manufacturer of pharmaceutical-type products. It will
focus on processes for manufacture. Focusing broadly on the production and analysis
of proteins, the VIB seeks to become a Centre of Excellence in antibody engineering
for diagnostic and vaccination purposes.
A feasibility study in 2002 suggested that the WTP was positioned to become a hub of
excellence in biotechnology including veterinary applications, agribusiness (food and
related R&D) and environmental sustainability.
The rate of development of the precinct, which has been reserved for scientific and
educational purposes, has been slower than expected, This has been attributed (at
least in part), to the absence of a body to coordinate networking.
While Geelong should develop its own network organisation, the potential synergies
with Werribee need to be explored at a practical level. This should be further explored
during the development of the business plan for the Geelong Network.
Rec 21 That as part of the development of the Network, the potential for linkages
with organisations in the Werribee Precinct be further examined.
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Geelong Biotechnology Opportunities Study
13 The Way Ahead
13.1 A Long Term Strategy
Our analysis shows that there is a strong foundation for the further expansion of
biotechnology and related areas of biosciences in Geelong.
While the sector is small in scale in comparison with size of the major industry precincts
in Melbourne, it is specialising in areas that provide considerable long term potential.
The key focus of the development strategy outlined in this report is on “growing you
own” through an expansion of research funding and increased commercialisation.
The strategy outlined in this report has taken a 15 year perspective, with 3 distinct
phases identified.
 Phase 1- Building Research Scale – this first phase over the next 5 years concentrates
on scaling up research activity through an expansion of research funding and
increased commercialisation.
 Phase 2 - From Research to Production – this second phase continues the growth in
research and development, while attracting related small to medium scale production
facilities. The GTP site will be important as a location for this.
 Phase 3 - A Regional Bioindustry Centre – this final phase spans the period out to 2020.
Geelong will have consolidated its position as biotechnology centre, with a spectrum of
activity from discovery to production, and developed to a position where it has attracted
a larger scale production facility.
13.2 Taking the First Steps
Our analysis shows that achieving growth will require the momentum that is embodied
in the expansion plans of Deakin, CSIRO and Barwon Health to continue, and this
needs to be combined with increased cooperation.
Cooperation is required to realise emerging opportunities and to deal with some of the
constraints identified in the SWOT analysis.
A new vehicle is needed to deliver this industry cooperation on an ongoing basis. There
is a need to build on the current regional cluster through the establishment of a formal
Geelong Biotechnology Network. The functions of this network are outlined in this
report.
The establishment of the network is the first step in implementing the strategy outlined in this
report.
The implementation timetable should aim to have the Network in place and functioning
at the beginning of 2005, with the first major programs also commencing in early 2005.
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Geelong Biotechnology Opportunities Study
13.3 Establishing the Network
13.3.1 Geelong Council Taking a Lead Role
There is a need for action to be taken on the development of the BioGeelong Network.
It is appropriate for the City of Greater Geelong to continue to take the leadership role
in this.
Council should be supported by an industry taskforce that would provide assistance in
establishing the network.
The next steps would involve:
 Forming a Biosciences Industry Taskforce to consider this report.
 Securing additional funding for the establishment of the Network.
 Development of a detailed business plan for the Network.
 Setting up the Network and commencing on the Year 1 projects
Rec 22 That a Bio-Industry Taskforce be formed to consider this report and to
develop the network.
13.3.2 Key Tasks
There are several key tasks that would need to be completed. These are:
 BioGeelong Network Business Plan - development of a three year business plan for the
network.
 Development of an investment attraction strategy for Geelong Biotechnology
 Development of a biotechnology infrastructure projects plan
 Appointment of a Facilitator of the BioGeelong Network
Preparation of the business plan is fundamental to commencing the implementation of
the development strategy outlined in this report.
Geelong Council should take the following initiatives.
Funding for Developing the Network
 Seek funding for the development of the BioGeelong business plan. ($30,000)
 Seek funding for the development of an investment attraction plan.($10,000)
 Seek funding for the development of a biotechnology infrastructure projects plan.
($10,000)
Appointment of Consultants
Selection and appointment of consultants to complete the projects related to
developing the industry cluster/network.
Creation of the Network
Following the completion of the business plan, Council would perform the following
roles:
 Securing of Victorian Government funds and other funding for the network
 Selection and appointment of the facilitator of the network
 Establishment of an advisory board
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Geelong Biotechnology Opportunities Study
Management of the Network
Ongoing management of the Network, including financial monitoring and reporting
It will be important that the Geelong Council take the lead role in the development of
the BioGeelong Network.
Rec 23 That the City of Geelong continue to take a lead role in managing the next
stages of implementation of this report including the development of the
BioGeelong Network.
Rec 24 That the City of Geelong seek funding from the Victoria Government for
the development of the BioGeelong business plan; an investment attraction
plan and a biotechnology infrastructure projects plan, under the Regional
Innovations Clusters Program.
Rec 25 That following the completion of the business plan, Council seek additional
funding for establishing the network.
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Geelong Biotechnology Opportunities Study
14 Recommendations
Recommendation
Strategy Directions
Rec 1 That the focus of the development strategy for
the biotechnology sector in the Geelong region be
primarily on a “grow your own strategy” over the first 5
years
Rec 4 That a major focus of the strategy be on scaling
up the biotechnology sector in Geelong through
securing increased research funding
Priority
Implementation
Responsibility
Timing
Page
Medium
BioGeelong
Deakin, CSIRO,
Barwon Health,
PIRVic
BioGeelong
Deakin, CSIRO,
Barwon Health,
PIRVic
BioGeelong
Deakin, CSIRO,
Barwon Health,
PIRVic
BioGeelong
Deakin, CSIRO,
Barwon Health,
PIRVic
Ongoing
90
Ongoing
93
Ongoing
96
Ongoing
97
Sept 2004
93
Sept –Nov
2004
93
Medium
Rec 5 That a major focus be placed on increasing
commercialisation of research
Medium
Rec 6 That a major emphasis be placed on increasing
research collaboration and joint projects among the
research organisations in Geelong
Medium
Committing to the Strategy
Rec 2 That the development strategy outlined in this
report be adopted as the long term regional
biotechnology plan for the Geelong and the broader
G21 Region
Short Term
Rec 3 That Geelong City Council seek endorsement of
the report from the research organisations and other
major stakeholders and support for its key directions
Establishing a Network
Rec 17 That a Geelong Biotechnology Network
(BioGeelong) be established as the vehicle for
delivering the regional biotechnology strategy
Rec 18 That the BioGeelong – the Geelong
Biotechnology Network be located at the GTP
Rec 19 That the funding for the Network include
member contributions as well as funding from relevant
government programs.
Rec 20 That the Network establish links with key
industry organisations and relevant government
agencies
Rec 21 That as part of the development of the
Network, the potential for linkages with organisations
in the Werribee Precinct be further examined
Short Term
Geelong Council,
other G21
Councils,
Deakin, CSIRO,
Barwon Health
Geelong Council
Short Term
Geelong Council
Feb 2005
108
Short Term
Geelong Council,
Deakin
Geelong Council,
Deakin, CSIRO,
Barwon Health
BioGeelong
Network
Feb 2005
112
Feb 2005
112
October 2004
114
Rec 22 That a Bio-Industry Taskforce be formed to
consider this report and to develop the network
Short Term
August 2004
116
Rec 23 That the City of Geelong continue to take a
lead role in managing the next stages of
implementation of this report including the
development of the BioGeelong Network
Rec 24 That the City of Geelong seek funding from the
Victoria Government for the development of the
BioGeelong business plan; an investment attraction
plan and a biotechnology infrastructure projects plan,
under the Regional Innovations Clusters Program
Short Term
Geelong Council,
Bio Industry
Taskforce
Business Plan
Consultants
Geelong Council,
Deakin, CSIRO,
Barwon Health,
other G21
Councils
Geelong Council
August 2004
117
Geelong
Council/Victorian
Government
September
2004
117
Short Term
Short Term
Short Term
Short Term
Feb
onwards
2005
120
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Geelong Biotechnology Opportunities Study
Recommendation
Priority
Implementation
Responsibility
Geelong
Council/Victorian
Government
Timing
Page
Rec 25 That following the completion of the business
plan, Council seek additional funding for establishing
the network
Infrastructure
Rec 9 That as one of the early projects of the
BioGeelong Network an assessment be made of
future
infrastructure
needs
to
expand
the
biotechnology sector in Geelong
Rec 10 That the GTP be recognised as a key
infrastructure project that is fundamental for the future
development of biotechnology in the Geelong Region,
including the attraction of research centres and
production facilities
Skills Development
Rec 8 That special regional programs be established
to develop commercialisation and business skills within
the biosciences sector in Geelong. These programs
should be developed by the proposed BioGeelong
Network
Business Attraction & Development
Rec 7 That the attraction of a major new research
centre be established as a medium term goal for
Geelong
Rec 11 That the feasibility of developing regional scale
up facilities at the GTP be investigated by the
BioGeelong Network
Rec 12 That the feasibility of developing GLP facilities
at the GTP be investigated by the BioGeelong Network
Short Term
December 2004
117
BioGeelong
Network
Geelong Council
Consultant
BioGeelong
Network
Geelong Council
Nov 2004
99
2005 onwards
99
Short Term
BioGeelong
Network
Geelong Council
Consultant
Feb 2005
99
Medium Term
BioGeelong
Network
Geelong Council
BioGeelong
Network
Geelong Council
BioGeelong
Network
Geelong Council
BioGeelong
Network
Geelong Council
BioGeelong
Network
Geelong Council
2005 -onwards
98
March 2005
100
June 2005
101
Rec 13 That the attraction of a major biosciences
related manufacturing operation be pursued as long
term goal for Geelong
Rec 14 That the attraction of a smaller scale
biosciences related manufacturing be pursued as a
medium term priority for Geelong
Marketing and Promotion
Rec 15 That an ongoing biosciences industry
marketing program be implemented for Geelong
Biotechnology
Rec 16 That Greater Geelong City Council take the
lead in developing the marketing materials
Long Term
2007 onwards
102
2006 onwards
103
BioGeelong
Network,
Geelong Council
Geelong Council
Feb 2005
104
October 2004
104
Short Term
Medium Term
Medium Term
Medium Term
Medium Term
Short/Medium
Short Term
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Appendix 1 References
Australian Biotechnology: A National Strategy. Australian Government. July 2000.
An Industry Training Plan for the Delivery of Training in Biotechnology, 2003. A Report
for Box Hill TAFE Acuity Technology Management.
Australian Biotechnology Report. Ernst & Young and Freehills. For the Australian
Government. 2001.
Australian Biotechnology: Progress and Achievements. Australian Government. July
2000.
AusBioInfo News - www.ausbioinfo.com. Australian Biotechnology News.
Beyond Borders Global Biotechnology Report. Ernst & Young. 2002.
Backing Australia’s Ability – An Innovation Action Plan for the Future. Australian
Government. 2001.
Bioscience to Bioindustry A Role for Local Government in Biotechnology in Victoria,
Aoris Nova January 2004
Biotechnology Strategic Development Plan for Victoria. Department of State and
Regional Development. 2001.
Biotechnology 2004 Strategic Development Plan for Victoria 2004, Victorian
Government, June 2004
Benchmarking Study of R&D Costs in Selected Segments of Australian Biotechnology
Final Report. Ernst & Young, Hay Group, Strategic Industry Research Foundation,
January 2001.
Biotechnology in Australia. Federation of Australia Scientific and Technological
Societies. Occasional Paper Series, Number 1. Jan 1999.
Biotechnology in NSW: Opportunities and Challenges, NSW Innovation Council,
August 1998.
BioFirst - NSW Biotechnology Strategy. NSW Government. 2001.
Borderless Biotechnology Report 2003, Deloitte Touche Tohmatsu. 2003.
Commonwealth and State Government Programs Supporting Innovation in Firms.
Department of Industry Tourism and Resources. January 2003.
Co-operative Research Centre Compendium 2002. Department of Education, Science
and Training. 2002.
Cooperative Research Centres. Commonwealth Department of Education, Science and
Training website. www.crc.gov.au.
Deloitte Biotech Index – 6th Edition. A review of key biotechnology stocks listed on the
Australian Stock Exchange. October 2001.
Engineering ‘in Synch’. Science and Engineering Vocational Education and Training Implications of the Synchrotron. Chisholm Institute. June 2003.
Establishment of a National Biotechnology Organisation. A Feasibility Study for
Biotechnology Australia. Buchan Consulting. 2000.
Feasibility Study - Specialist Centre in Biotechnology. Buchan Consulting November
2003.
Highlights of Victorian Biotechnology and Bioscience Based Industry. BioAccent David Fayle and Diana Fayle. 2001.
Longitudinal Study of Innovative Australian Firms. Innovation Analysis, Innovation and
Industry Policy Division. September 2002.
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Geelong Biotechnology Opportunities Study
Mapping Australian Science and Innovation, Main Report Department of Education,
Science and Training, November 2003.
Mapping Australian Science and Innovation, Working Paper - Business Innovation,
Department of Industry Technology and Resources December 2003.
Mid-term Review of the National Biotechnology Strategy 2002. Biotechnology Australia.
2002.
Queensland the Smart State - Investing in Science: Research, Education and
Innovation. Queensland Government October 2003.
Smart Geelong Smart Future – Smart Geelong Network Brochure.
Technology Facts 50 – Technology Industry Survey. Deloitte Touche Tohmatsu. 2003.
Victorian Biotechnology and Bioscience Based Industry Report, by David Fayle,
BioAccent. June 2002.
Victorian Biotechnology Industry Report Thorburn & Hopper September 2003
Victorian Biotechnology Directory 2003. Advance Consulting & Evaluation and Aoris
Nova for the Department of Innovation, Industry and Regional Development. May 2003.
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Appendix 2 Geelong Technology Precinct
Overview
The Geelong Technology Precinct (GTP) is based at Deakin’s Geelong Campus.
The precinct concentrates on core research capabilities in materials, biotechnology,
chemistry, and environmental engineering, combined with regional strengths in
manufacturing and agri-processing.
 Stage 1 of the GTP consists of a newly refurbished 8000m2 research and commercial
facility together with existing biotechnology and other research capabilities on-site.
 Future stages in the development of the precinct will include co-location of commercial
businesses and major research initiatives on the adjoining 56-hectare site.
Key Features of the precinct are:
 8000m2 research and commercial facility, including 850m2 of hi-tech laboratories
1150m2 of networked offices & workstations, 1000m2 of high profile demonstration
space , 4500m2 of quality industrial space;
 Open plan areas designed to encourage communication include meeting venues and a
stylish 'R&D' Cafe
 Technology infrastructure including library, high-speed data links, demonstration and
testing equipment, and other complementary research facilities
 Accommodation and conference facilities (447-person student accommodation, 93person conference accommodation with 200-person management conference centre)
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Geelong Biotechnology Opportunities Study
Stage 1 Tenants
The activities included in the Stage 1 of the GTP range across these areas of
specialisation.
Activity
Description
Advanced Materials Research
Advanced manufacturing and performance of materials,
materials manufacturing, intelligent systems and
advanced fibres, textiles and polymers
Materials for
manufacturing
Victorian Centre for Advanced
Manufacturing (VCAMM)
Materials
textiles,
metals
and
automotive
Development of high-performance materials (include steel,
light metals and composite materials) for automotive and
aerospace
Textiles Research
Textiles and fibres research group works with natural and
synthetic fibres. It covers a wide range of fields such as
chemistry, fibre metrology, dyeing, polymers, extrusion,
processing, and conductive polymers.
National Centre for Cool Climate Wine Science
Teaching and research winery. Research focus is on
canopy management, clonal selection and integrated
disease control
ChemGenex Pharmaceuticals
ASX listed biotechnology company, which focuses on
gene discovery and validation. It incorporates the
commercialisation of in-house intellectual property
together with a fee-for-service technology platform
Chirogen Pty Ltd
Chirogen is a biotechnology R&D company. Its proprietary
platform technology enables the production of pure single
enantiomer
compounds
for
the
pharmaceutical,
agrochemical and specialty chemicals industries
Water Resource Management
Environmental engineering, combining expertise in
industrial systems, environmental technologies, catchment
and ecosystem management.
Mobile Architecture and Building Environment
Laboratory (MABEL)
World's first mobile facility to offer integrated on-site
measurements of power, sound, light and comfort for
buildings.
Aims to improve building design and energy efficiency for
the purpose of achieving environmental and economic
savings.
International Fibre Centre (IFC)
Training and education in the fibre and textile industries.
A collaborative partner in Deakin's advanced fibre
research.
Cooperative Research Centre for Cast Metals
Manufacturing (CAST)
Joint research program with Ford.
Focus on light metals to decrease vehicle weight and
reduce fuel consumption and exhaust emissions.
Source: Deakin University Website Accessed June 2004
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Appendix 3 Werribee Technology Precinct
Werribee Technology Precinct
In the report 'Melbourne 2030 – Planning for sustainable growth' Werribee is identified
as a Principal Activity Centre and the Werribee Technology Precinct as a Specialised
Activity Centre.
The advantageous aspects of the site were seen to be access to economic and social
development in the eastern region of Melbourne, support from the two universities, the
opportunity for expansion and land availability offering potential for social interaction
through ancillary uses (eg accommodation, recreation and cultural activities).
A feasibility study in 2002 suggested that the WTP was positioned to become a hub of
excellence in biotechnology including veterinary applications, agribusiness (food and
related R&D) and environmental sustainability.
The Werribee Technology Precinct covers 925 hectares and includes branch
campuses of The University of Melbourne and Victoria University of Technology, R&D
providers and providers of contract research. The total workforce of about 350 is mainly
engaged in subsidiaries of larger research organisations.
The Precinct has a strong animal biotechnology base through the Victorian Institute of
Animal Science and the School of Veterinary Science of the University of Melbourne. It
is seen as an opportunity to create a mix of uses in a community rather than a 'sterile
drive in – drive out science park'.
The rate of development of the precinct, which has been reserved for scientific and
educational purposes, has been slower than expected, and has been attributed,
partially at least, to the absence of a coordinating administration or governance body.
A sustained ability to attract a skilled professional workforce has been identified as a
challenge to growth of the precinct, while its assets are regarded as the estate itself,
the stakeholders and their support for the project.
According to the head of the VIB (see below) the groups at the WTP currently hold
monthly precinct seminars between the various sites. People are (gradually) talking and
assisting one another where synergies are identified. Money has been set aside (by
Victoria University) for a dedicated Precinct Web site to increase the precinct profile.
Occupants are discussing gaining value from shared resources such as large items of
equipment, library services etc
Victoria Institute Biotechnology (VIB)
The VIB is a joint venture between the Austin Research Institute and Victoria University
located at the university’s Werribee campus. The ARI plans will re-locate researchers
on completion of the new building, expected to open in August 2005.
The joint venture entity includes a commercialisation entity to cover any discoveries
arising from the joint venture.
To differentiate VIB from Melbourne (Parkville, Monash strip) where biotech has a
heavy emphasis on the research side, the VIB is aiming to position itself about midway
between a research institute and manufacturer of pharmaceutical-type products. It will
focus on processes for manufacture. Focusing broadly on the production and analysis
of proteins, the VIB seeks to become a Centre of Excellence in antibody engineering
for diagnostic and vaccination purposes. A substantial fermentation facility designed
into the new building will offer the capacity to produce large amounts of proteins very
quickly. Biotechnology products, which incorporate a lot of added value to physically
small units, are expected to be relatively easy to export from, say, Avalon.
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Links
VIB is keen to make links with industry as soon as possible to be able to do protein
analysis etc on products that are already on the way to commercialisation. They have
not looked at synergies with Geelong but would be interested in doing so.
Their focus on antibody engineering may put them in competition but is likely to be
synergistic with CSIRO's extensive research program on animal vaccines. It would be
important for the two organisations to avoid head-to-head competition.
Food Sciences Australia (FSA)
FSA is a research-based business, a joint venture between CSIRO and the Department
of Primary Industries.
FSA activities as regarded as being on the fringe of biotechnology. FSA tends to enter
the picture after any biotechnology has been done. They are mainly involved in food
processing. Trends include the development of nutriceuticals, both for the delivery of
health benefits and the prevention of disease. The FSA's interests are the extraction of
valuable materials from food products or waste streams, the creation of products with
an active ingredient and the protection of active ingredients during processing.
The research budget of $35 million is spread over sites in Sydney, Brisbane and
Melbourne. Melbourne employs 100 people, or 45% of the total and is estimated to
receive about 45% of the budget (about $16 million).
The approximate breakdown of the budget is 50% from government, 25% from semigovernment and 25% from contract research.
Links
They have had virtually no interaction with AAHL to date and limited interaction with
Fibre and Textile Technology in relation to analytical chemistry techniques. FSA has a
regional connection with Geelong as a lot of their staff live there.
Links with the University of Melbourne are through co-supervision of students and FSA
staff taking courses at the University.
The FSA has done projects with Agrifood Technology and has the potential to work
with the State Chemistry Laboratory (an institute within the DPI at the WTP). From the
FSA point of view, not much has been achieved in the way of interactions with groups
located within the precinct, despite attempts to address this.
The FSA works on a project with Deakin University, funded by the Geoffrey Gardener
Foundation, called 'Closing the Loop – a holistic approach to dairy waste', in a group
led by the DPI that includes about six research providers and 20 companies in the dairy
industry.
About 25% of the FSA's interactions are with dairy companies in the region west of
Geelong.
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Appendix 4 Public Sector Biotechnology Research and
Development
Australia has developed a strong public sector research base in biotechnology and
related fields – that include health and medicine, agriculture and environmental
sciences. The main contributors to Australia’s primary research output are CSIRO,
universities, research institutes, government funded research facilities and cooperative
research centres.
These public research facilities are the employers of postgraduate and graduate
researchers and support staff.
They have also been the source of much of the technologies under commercial
development, through spin-off companies, licensed technologies and joint R&D activity.
CSIRO
CSIRO is one of the world’s largest and diverse research organisations. The CSIRO is
ranked third in the world for the frequency of citations for its publications on
environmental science and fourth in the field of agricultural research 56.
Major areas of biotechnology related research include programs in health, agriculture
and the environment.
CSIRO biotechnology activity involves 3,300 staff located at a total of 60 sites in
Australia and overseas.
Major research projects are in the areas of plant growth and development, new
diagnostic therapies for cancer, drug targeting and delivery and gene therapy.
CSIRO launched its National Research Flagships initiative in April 2003. The initiative
brings together science and industry to tackle key challenges in areas including
preventive healthcare, light metals, water, food, oceans and energy57.
Biotechnology is a major component of a number of the Flagships including healthcare,
water, agrifood, oceans and environment.
Some of the activities at CSIRO, at the Australian Animal Health Laboratories in
Geelong, in animal health and marine science and aquaculture are under the Flagships
umbrella.
Australian Universities
Australian universities receive operational grants from the Australian Government, with
competitive grants for medical and other research provided by the National Health and
Medical Research Council (NHMRC) and the Australian Research Council (ARC).
Through direct funding and the competitive grants, universities receive around half of
the public funding available for biotechnology research in Australia.
A number of universities are leaders in the teaching of biotechnology and are also
involved in significant research programs including the commercialisation of research.
These include the University Melbourne and Monash in Victoria.
Research Institutes
Australian research institutes are often affiliated with major public hospitals,
universities, and health related CRCs.
Some of the larger institutes include the Walter and Eliza Hall Institute, the Howard
Florey Institute, the Baker Heart Research Institute and the Murdoch Children’s
Research Institute, which are all based in Victoria.
56
57
USA Journal Science Watch. 2002
CSIRO Media Release – National Flagships April 14 2003
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Many of Australia’s biotechnology start-up companies originated in research institutes.
For example, in the 2001 financial year an estimated 70% of new start-ups were from
research institutes58.
Most major institutes have business development units that work with researchers to
identifying at early stages, projects and ideas that have commercialisation potential.
Major National Research Facilities (MNRF)
MNRFs are significant nodes of scientific information, expertise, facilities and/or
collections of specimens.
MNRFs are part of a strategy, implemented by the Australian Government, to
encourage partnership investment in national research infrastructure among all tiers of
government, universities and public and private research agencies.
In 2001, $100 million was allocated to facilities involved in biological science.
Successful applicants include the Australian Proteome Analysis Facility and the
Australian Genome Research Facility.
Rural Industry R&D Corporations
The Rural Research and Development Corporations (RRDCs) are focused on
increasing Australia's rural R&D effort.
Central to the RRDCs are partnerships between industry and Government to
implement R&D.
In 2002–03 the Australian Government contributed around $170 million to fund the
activities of the R&D corporations, with industry providing a similar amount.
With other third party contributions, expenditure by Rural R&D Corporations is about
$365 million59.
Cooperative Research Centres (CRCs)
The Cooperative Research Centre Program brings together in partnerships, researchers
from universities, the public sector and industry.
The CRCs undertake long-term, collaborative research and development ventures and
bring together researchers and research users from universities, the public sector and
business.
CRCs were conceived as a major vehicle, to improve the performance of R&D and to
build strong collaboration between industry and the research sector.
The program has several objectives that focus on enhancing:
 The contribution of long-term scientific and technological research and innovation to
Australia’s sustainable economic and social development.
 The transfer of research outputs into commercial or other outcomes of economic,
environmental or social benefit to Australia.
 The value to Australia of graduate researchers.
 Collaboration among researchers, between researchers and industry or other users,
and to improve efficiency in the use of intellectual and other research resources.60
Australian Biotechnology News 2002
Mapping Australian Science and Innovation Working Paper Business
Innovation Department of Industry Technology and Resources December 2003 p 94
60
Co-operative Research Centre Compendium 2002. Department of Education, Science and Training.
58
59
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CRCs are generally funded for 7 years, in a system that sees Australian Government
funds matched by partners in the centre. The Program has funded more than 90 CRCs
across Australia.
 Most CRCs are small with an average annual budget of $7 million.
 There are 64 CRCs and around one third are directly involved in biotechnology.
 Industry has committed more than $1.4 billion over the life of the program.
 Most CRCs operate on more than one site and usually operate across State borders.
The following table provides details for all CRCs that are utilising biotechnology. As
most CRCs collaborate with researchers and organisations across State boundaries,
we have used the location of the main research body to classify the State in which the
CRC operates.
 Of 64 CRCs currently funded in Australia, 24 have a focus on biotechnology, mostly
involved in either agriculture or medicine.
 Of these 24 biotechnology CRCs, seven have the administering institution in Victoria.
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Table 28.
CRCs in Australia by State and Industry – 2002
Co-operative Research Centre’s
Location by
State
Manufacturing Technology
CRC for Microtechnology
VIC
CRC for Bio products
VIC
Agriculture and Rural Based Manufacturing
Australian Cotton CRC
NSW
Australian Sheep Industry CRC
NSW
CRC for Cattle and Beef Quality
NSW
CRC for Innovative Dairy Products
VIC
CRC for Molecular Plant Breeding
SA
CRC for Sustainable Aquaculture of Fin Fish
SA
CRC for Sustainable Production Forestry
TAS
CRC for Sustainable Rice Production
NSW
CRC for Tropical Plant Protection
QLD
CRC for Value Added Wheat
NSW
CRC for Viticulture
SA
Environment
CRC for Australian Weed Management
SA
CRC for Biological Control of Pest Animals
ACT
Medical Science and Technology
CRC for Asthma
NSW
CRC for Cellular Growth Factors
VIC
CRC for Chronic Inflammatory Diseases
VIC
CRC for Cochlear Implant and Hearing Aid Innovation
VIC
CRC for Diagnostics
QLD
CRC for Discovery of Genes for Common Human Diseases
VIC
CRC for Eye Research and Technology
NSW
CRC for Tissue Growth and Repair
SA
CRC for Vaccine Technology
QLD
Source: Co-operative Research Centre Compendium 2002. Department of Education, Science
and Training
Since the commencement of the program in 1990, a total of $7.3 billion in cash and inkind support has been committed under the program. This includes $1.8 billion from
universities, $1.8 billion from the Australian Government and $1.3 billion from industry
contributions. 61
Biotechnology Centre of Excellence
The Biotechnology Centre of Excellence (the National Stem Cell Centre) – funded by a
$44 million grant from the Australian Government brings together Australia’s expertise
in embryonic and adult stem cell technology.
The central node of the National Stem Cell Centre is located in the Monash
Biotechnology development in Victoria. It will house up to 200 scientists in state-of-theart facilities, which will include standard cell production suitable for clinical applications.
61
Mapping Australian Science and Innovation Working Paper Business Innovation December 2003 p 95
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Appendix 5 Location of Biotechnology Firms by LGA
City of Melbourne (59)
City of Melbourne(59)
City of Yarra(24)
Acrux Limited
AgSeed Research (Division of
Monsanto)
Angiostar
Ausgenics
Auspep
Australian Genome Diagnostics
Autogen
Bio Nova International
BioDiem
Biogreen
Biota Holdings*
Biotechnology Ventures
Bonlac Foods
Calibre Biotechnology
Cardiac Science Australia
Cell Therapies
Centre for Development of Cancer
Therapeutics
Cervax
Innovonics
Kryokor
Advanced Surgical Technologies
Ag Genomics
MedSeed
Melbourne IVF
Mercy Tissue Engineering
Monsanto Australia
MuriGen
Neurosciences Victoria
Optech Diagnostic and Surgical
Orica Australia
Pargenex Pharmaceuticals
Pharmasafe
PinnacleVRB
PlantTech
ProBio International
Schumacher Pharmaceuticals
SciBAC
AMRAD Corporation
bio Revive
Bioscreen
Cardiac Science Australia
Carlton and United Breweries
Cerylid Biosciences
Compumedics
Cytopia
Dynamic Hearing
Florigene
Gene Type
Gene Type
Genetic Technologies Corporation
ImmunAid
Mabtech
Seed Grain Biotechnology
Australia
Shedden Uhde
Siemens Ultrasound
Solagran
Starpharma Pooled Development
Technology Commercialisation
Thomson Scientific Instruments
Thorgard Pharmaceuticals
Tocovite
Viralstar
Vita Life Sciences
Vital Health Sciences
McFarlane Laboratories
CogState
Cryptopharma
CSL
Cytoscreen
Dendritic Nanotechnologies
Eiffel Technologies
Epi Tan
ES Cell International
EvoGenix
Hatchtech
Hepatope
Hexima
Monash IVF
Pacific Medical
QIAGEN
Rarecellect
Silbase Scientific Services
Simons GeneType Diagnostics
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City of Monash (33)
City of Knox (14)
Aus Bio
Applied Biosystems
Bayer Australia (Health Care
Baldwin Medical and Veterinary
Operation Centre)
Biogenome
Bayer Australia Diagnostics Group
Coloplast
Chemicon Australia
Copyrat
Connetics Australia
CryoLogic
Devices (Australia) Australia
Diamed Australia
DNA Solutions
Excalibur Laboratories
Fairmont Medical Products
Felton Grimwade & Bickford
GlaxoSmithKline Australia
Gallay Scientific
Institute of Drug Technology
Gambro
Kodak(Australasia) Pty Ltd
Getz Bros &Co.(Aust)
Medical Concepts Australia
Ingenko
MiniFab (Aust)
Invetech
Southern Dental Industries
Invitrogen Australia
Trewavis Surgical Instruments
Laerdal
Maccine
Mayne Pharma
Medos Company
Met-App
Mimotopes
Monash Mouseworks
Mondo Medical
Olympus Australia
Optiscan Imaging
Premier Bionics
Prostate Diagnostics
Pulmosonix
Science Supply Australia
Shimadzu Scientific Instruments
Varian Australia
Vision BioSystems
XRT Limited
Source: Bioscience to Bioindustry A Role for Local Government in
January 2004
City of Wyndham (9)
Animal Reproduction Company
Australian Starter Culture Research Centre
Clone International
Cottee Health Pharmaction
Environmental Biotechnology (Systems)
Nufarm
Nugrain
Peerless Holdings
Plantic Technologies
City of Hume (8)
Agriculture Victoria Services
Anadis
Applied Biotechnologies
Cognis Australia
Crystal Healthcare
CSL Bioplasma
Micronized Foods
Southern Dental Industries
Biotechnology in Victoria, Aoris Nova
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Appendix 6 Location of Metropolitan Research Institutes
Major Research Institutes - City of Melbourne
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Major Research Institutes - City of Monash
Major Research Institutes - City of Yarra
Major Research Institutes - City of Wyndham
Source: Bioscience to Bioindustry A Role for Local Government in Biotechnology in Victoria , Aoris Nova
January 2004
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Appendix 7 Government Funding Programs
There are number sources of government funding that can be accessed to develop the
biotechnology sector in Geelong. These are in addition to the national competitive
grants funding (and other national program funding) that is pursued by individual
institutions.
The key programs are:
 Regional Innovations Clusters Program
 Victorian Endowment for Science Knowledge and Innovation (VESKI) Fellowship
 Science Technology and Innovation (STI) Initiative Infrastructure Grants Program
 Regional Partnerships (Commonwealth Government)
Victorian Government
Regional Innovation Clusters Program
The Regional Innovation Clusters Program (RIC) of the Office of Science and
Technology was created to foster clustering as a key tool in regional economic
development. It is a $2.9 million, three-year program to develop and strengthen
'potential, emerging, and existing clusters in rural and regional Victoria'.
Biotechnology in Geelong already meets a number of the criteria that define a cluster
according to the RIC Program. These include the sharing of geographical location,
specialised infrastructural requirements, common labour markets and similar threats
and opportunities.
Geelong biotechnology would be classified as a Potential and Emerging Cluster with
potential for the establishment of a network of organisations, and for the participation of
Deakin University and the Gordon Institute of TAFE.
In order to apply for assistance to the RIC Program, it is necessary to identify a local
champion from participating organisations to drive the cluster and provide financial and
in-kind support.
Current and future collaborative activities must be described, for example between
Deakin, PIRVic and CSIRO/AAHL in the area of aquaculture. The involvement of
universities (Deakin), TAFE colleges and research organisations is important.
An emphasis on the development of technology and, where appropriate, new skills to
support such development, is desirable.
Geelong already has a biotechnology and aquaculture base, meeting two of the
Government's nominated industry sectors, and there is demonstrated support from the
City of Geelong and other G21 Councils.
Eligible projects under the Potential and Emerging Clusters category include the
engagement of a cluster coordinator/facilitator, development of a feasibility
study/scoping report for the development of a cluster, development of a cluster
governance arrangements and of a vision and action plan.62
The Regional Innovation Clusters Program provides for grants of up to $50,000 on a $3
(Government) to $1 (cluster) basis (Potential and Emerging Clusters), where the cluster
contribution may be cash or in-kind.
62
This Opportunities Study has been part funded under the RIC Program.
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Victorian Endowment for Science Knowledge and Innovation (VESKI)
Fellowship
VESKI seeks to facilitate the return of expatriate Victorians who have been successful
in science, technology and design, and assist them in developing their expertise and
contributing to Victoria's future.
VESKI is relatively new, with the first phase involving the awarding of 2-3 VESKI
Victorian Innovation Fellowships for research in Victoria for up to five years. They are
funded at up to $100,000 per annum with matching funding (rather like the
Commonwealth Government’s Federation Fellowship program).
Science Technology and Innovation (STI) Initiative Infrastructure Grants
Program
This program is delivered by IIRD. Round 3 of the program commenced in June 2004.
Funding is available in the following categories:

Physical capital - purpose-built facilities, laboratories, machinery and equipment;

Human and social capital - skilled personnel, including scientists, engineers, R&D
managers and entrepreneurs together with the supporting networks; and

Structural capital - governance structure, management and administrative
arrangements.
There are a number of areas that are being focused on in Round 3. These are:

Building new capabilities in priority sectors that catalyse new levels of R&D innovation,
commercialisation, and industry development.

Enabling new levels of collaboration and cross-disciplinary interaction between
researchers and industry. Projects should reflect strong partnerships and can be
public/public, public/private, and private/private ventures.

Demonstration of sustainable benefits to industry and the research community where
the pooling of resources, skills and capabilities is actively encouraged.

Facilitating earlier involvement between industry and the research sector to encourage
joint investment in projects that focus on the application and demonstrations of
research.

Attracting and retaining internationally recognised researchers, and supporting
Victorian industries to become internationally competitive.
Deakin has been successful in recent years in securing several STI grants.
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Commonwealth Government
Regional Partnerships
Through Regional Partnerships program the Commonwealth Government funds
projects that focus on:
 Strengthening growth and opportunities by investing in projects that strengthen and
provide greater opportunities for economic and social participation in the community.
 Improving access to services by investing in projects that, in a cost effective and
sustainable way, support communities to access services.
 Supporting planning by investing in projects that assist communities to identify and
explore opportunities and to develop strategies for action.
 Assisting structural adjustment for communities by investing in projects that assist
specifically identified communities and regions to adjust to major economic, social or
environmental change.
As well as funding regional development strategies funding has been provided for
development of regional infrastructure, and for incentives to attract new investment to a
region.
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