Australia’s medical technology industry has experienced significant growth over the past few years, with industry experts saying healthcare is a major area for digital disruption.
In 2021, the medtech industry was investing $10 billion a year in Australia, up from around $300 billion in 2013, according to the New Daily. Whatsmore, 15 of the top 20 biotech companies have sales and revenue, which wasn’t the case 15 years ago. Whether the demand has been a long time coming with an aging population, or comes off the back of the global pandemic and staffing shortages, or both, the industry has seen major growth because of simultaneous domestic and international interest.
International interest in Australian originated R&D has also increased.
For instance, Michigan, US-based Stryker has officially opened a new R&D lab in Brisbane’s Herston Health Precinct, for the development of a revolutionary treatment, using additively manufactured just-in-time patient-specific bone tumor implants. The lab was announced last year, following a five-year partnership between the Fortune 500 company and various Australian partners, which was supported by a $3 million grant from the Innovative Manufacturing Cooperative Research Centre (IMCRC).
President of Stryker South Pacific Maurice Ben-Mayor said in a statement last month, “Stryker’s project with IMCRC demonstrated the importance of collaborative, open R&D and helped shape our current approach to innovation… With its world-class research institutions and highly skilled workforce, Australia has the capabilities Stryker needs to develop and produce the next generation of innovative medical technology.”
Additionally, Canadian company Algernon Pharmaceuticals Inc. recently received a $500,000 (AUD) refund for its Australian clinical research work in pharmaceutical development. Combined with Canada’s Federal Scientific Research and Experimental Development (SR&ED) tax credit, the Company has received approx. $3.3 million (AUD) in cash refunds for its work on treatments for idiopathic pulmonary fibrosis with chronic cough, chronic kidney disease, and a psychedelic program investigating a proprietary form of DMT (a hallucinogenic tryptamine drug) for stroke.
Another Canadian company, Lobe Sciences Ltd., recently announced it has incorporated Lobe Sciences Australia Pty Ltd., a 100% owned Australian subsidiary, to facilitate clinical trials in Australia with newly announced partner iNGENū Pty Ltd. The company looks to develop psychedelic derived medicines for neurologic and brain disease.
However, ‘homegrown’ innovation is also playing a major role in the industry’s growth, which has seen the rise of a number of Australian success stories in recent years, including:
All of these companies have been recipients or strong advocates of Australia’s R&D Tax Incentive, which has been one of the key drivers of incubating Australian medical technology since 2012.
Alongside the successes have been a number of failures, resulting in the market capitalisation of some ASX listed companies to plummet upon receipt of adverse clinical data. However, the unique nature of the industry requires willingness to invest in risky R&D Activities, and the R&D Tax Incentive plays a key role in encouraging companies to take on such risks.
The previous federal government had also introduced to parliament earlier this year the ‘Tax Concession for Australian Medical Innovations Bill 2022’, proposing to introduce a patent box scheme that would see profits from a medtech or biotech patent taxed at 17%, as opposed to the standard 30% for large businesses and 25% for smaller companies. It is not clear at this stage whether the new federal government will pass this measure as law.