Knowledge wave: Long-term biotech targets 'ambitious'

The biotechnology taskforce came up with four very specific goals, but its report is short on those same specifics.

Over a period of 10 years, the taskforce's targets are to triple the number of biotech organisations from 350 to 1000; increase employment from 3900 to 18,000; boost the number of core biotech companies from 40 to 200; and improve export revenue from today's $250 million to $1 billion.

The report says the goals are "ambitious but achievable" and, tellingly, does not include specific figures that indicate progress towards them.

"These goals were aspirational," Economic Development Minister Jim Anderton says. "If they got them, that'd be a pretty good effort. If they didn't, well, if they got even halfway we'd be a lot better off. We weren't too concerned about it."

Instead, the report spotlights successes in other areas of the taskforce's 28-point framework.

Key among these are the creation of NZBio, an industry body charged with continuing to identify the sector's constraints; the country's inclusion in the Australia New Zealand Biotechnology Alliance; and changes in tax legislation to improve capital investment and loss provisions.

These areas, according to NZBio chief executive Brian Ward, are vital to getting the sector on track so that it can come anywhere near the taskforce's lofty goals.

"There's much more focus [now] on creating commercial enterprise," he says. "A lot of the underpinning components are beginning to fall into place."

The biggest problem facing New Zealand biotech firms, Ward says, is a lack of scale and thus a lack of capital. While the country has traditionally been strong in research, the challenge has often been in trying to bring products to market, he says.

One of NZBio's roles, then, is to help smaller firms make links with venture capitalists, which is why an alliance with biotech-hungry Australia is so important, Ward says.

While New Zealand has six listed companies that can arguably be considered biotech, Australia has recently seen an explosion - about 112 now list on the Australian Stock Exchange, up 331 per cent in six years.

One of them is Auckland-based Neuren Pharmaceuticals, recently granted US Federal Drug Administration approval to skip phase II testing on one of its brain drugs.

Chief executive David Clarke says international links not only help New Zealand firms access capital funds, but also build international credibility in a high-risk, high-reward business.

"That partner credibility is an issue where we're certainly not as strong and as favoured as others."

Most observers agree that what the industry really needs is a Peter Jackson with a Lord of the Rings-type success story that will act as a rainmaker for the rest.

"It will happen in the next five years, and that will put us on the map because it's a zero-sum game," Clarke says. "When these drugs work, the returns are immense."

As for the taskforce goal of creating more firms, Brent Ogilvie - director of venture development and corporate advisory firm Pacific Channel - says it's misguided.

"They certainly are ambitious goals ... that might come about and it's wonderful if it does. But I'd like to see an equal amount of effort in the creation of at least one very successful company," he says.