$10m Government biotechnology boost

By SIMON COLLINS science reporter

The Government will today give a $10 million shot in the arm to New Zealand's budding biotechnology industry, which has been struggling to keep the confidence of investors.

Prime Minister Helen Clark will visit Auckland University at 3pm to announce "partnerships for excellence" grants of about $10 million to a proposed Institute for Innovation in Biotechnology and $7.7 million for a student mentoring scheme, Starpath.

The new biotech institute will represent a leap in the country's biotech capacity with places for an extra 80 university scientists, 80 graduate students and 80 researchers from businesses and crown research institutes.

Crown institutes HortResearch and Forest Research signalled last year that they would be keen to move researchers into the institute.

The university already has joint ventures with Fonterra to find valuable ingredients in milk as well as with AgResearch for work on structural biology and computer processing of biological data.

The institute will be housed in a $15 million building planned to open in early 2007 on a site occupied by glasshouses on the Symonds St side of Old Government House.

It will be integrated with the existing School of Biological Sciences next door, but with an independent scientific advisory board drawn mainly from outside the university, probably including two or three leading scientists from overseas.

The school's director, Professor Joerg Kistler, said the plan required raising $32 million for the building, for state-of-the-art equipment and for recruiting "world-class" scientists.

"We are really hoping we can attract top-level academics internationally, with a specific aim to bring back expatriate New Zealanders who have achieved highly overseas," he said.

The university plans to use $12 million from its own funds to top up the expected $10 million from the Government and $10 million which needs to be raised from the private sector.

Biology professor Grant Cooper and his wife, Maggie, are believed to be underwriting the bid for private sector funds from a trust they set up with profits from Amylin Pharmaceuticals, a Nasdaq-listed company founded by Cooper in the United States.

Kistler said naming rights to the institute were available to a suitable private sector sponsor.

"The deal with the Government is that they put up the money which we have to match with money from industry," he said.

"This can be generated by industry co-locating people and paying appropriate overheads, or it could be generated by direct investment from industry into research projects, or it could be generated through sponsorship."

He said the state-of-the-art equipment planned for the new institute would be available to anyone in the biotech sector.

Companies or crown research institutes (CRIs) in the institute would also work with the 200 existing graduate students in biology and the 80 new students.

"We need research projects for them and, through the clustering, we can increase the number of projects because we will be able to do joint supervision with industry people and CRI people," Kistler said.

"Not only will the students get research projects, but they will also get exposed to a more market-savvy environment. They will learn what is the value of intellectual property and how to protect it."

Research will target "bioactive" molecules for food and medicine, new uses for "biomaterials" such as wood, and wine science.

Space will also be provided for an "incubator" to nurture new businesses arising out of biological research.

The institute will host a new master of bio-enterprise degree course due to be launched in 2006 by the schools of biological sciences, business and law.

Students will need a science degree before starting the one-year master's course which will teach them how to start a business and protect its intellectual property.

The Partnerships for Excellence scheme provides public funding to match private sector investment for projects which must "increase New Zealand's tertiary education system capability at world-class level, enhance innovation, and support national economic and social goals, including regional development".

The only two other projects funded under the scheme so far are Auckland University's business school and an Otago University proposal to appoint "leading thinkers" to new professorships.

The Government gave $25 million to each of those projects.

The biotech institute comes at a welcome time for the biotech sector, which has been hit by recent layoffs at Genesis Research and Development and ViaLactia, Pfizer's withdrawal from a $60 million research contract at Auckland University and health research funding cuts affecting Blis Technologies founder John Tagg. However, Cooper's new company Protemix, cancer research company Proacta and a new life sciences venture capital fund backed by AgResearch and Direct Capital have all recently succeeded in raising new capital.

Wins and losses

* DOWNS

May 11: Pfizer cancels $60 million research contract at Auckland Cancer Society Research Centre.

June 16: ViaLactia axes seven jobs after parent Fonterra cut its funding by 40 per cent.

July 27: Genesis R & D axes 29 jobs to focus on fewer projects.

August 23: Blis Technologies founder John Tagg loses health research funding.

* UPS

December 2, 2003: Protemix raises $20 million for diabetes research.

June 24: Proacta raises $12.7 million for cancer research.

August 12: AgResearch/Direct Capital-backed Life Science Ventures says it will raise $60 million by September for biotech investments.

August 24: Government gives $10 million for new biotech institute at the University of Auckland.