The next wave: ICP biotech pair totally 'chuffed'

By DANIEL RIORDAN

ICP kicks off a weekly series, The Next Wave, highlighting the innovators, companies and industries that represent New Zealand's future.

Talk to Maxine Simmons and Rosemary Sharpin and a word you're going to hear a lot is "chuffed."

Chuffed at the recognition for their 17-year-old embryo transfer company, ICP, which has become only the fifth recipient of the Biotechnology Association's distinguished biotechnologist award.

And chuffed at what they sense is a new-found official acceptance that it's okay to make money out of New Zealand's edge in animal science.

Ms Simmons says the mood at last month's industry conference was a huge fillip.

For the first time, business and science seemed on the same wavelength about reaching the Government's goal of $2 billion in biotech exports by the end of the decade.

"We've battled it over the years, this idea that commerce was a bit tainted and dirty.

"But finally there's an acceptance that what we've been struggling to do for the past 17 years is legitimate and actually worthy of the science community's support.

"We claim we're in a knowledge economy and New Zealand has to do all these great things to be part of that. And now you can start to feel it can happen, whereas five years ago you doubted it, with just the odd biotechnologist plugging away."

Ms Simmons, aged 42, and Dr Sharpin, 52, have been doing that since they met as researchers at the Auckland Medical School.

They were using their pathology degrees to study the immunological processes in rheumatoid arthritis, and had to purify their biochemicals to ensure untainted test results.

That gave them the idea for a business. First thoughts of medical diagnostics went into the too-hard basket - tackling established multinationals did not appeal. So they looked at their own strengths, where New Zealand's advantages lay, potential markets overseas, and decided to apply their skills to animals rather than humans.

ICP started out making antibodies. Now it makes kits to test milk, products to make cows ovulate, animal pregnancy tests, and products to assist in embryo transplants.

Ninety-five per cent of their sales are overseas, mainly to North America and Europe, and the company is now the leader in several markets. Recently developed food and water-testing products offer scope for expansion in Asia.

The co-founders' families have always owned ICP, apart from three years when an Australian venture capitalist took a quarter share and helped to fund a new building.

Retaining ownership meant slower growth, but more opportunities to learn, says Ms Simmons, who believes the company is stronger for following a steady path.

Growth in the past couple of years has been at 25 per cent a year.

ICP doesn't disclose its turnover or profits but Ms Simmons says they're fairly typical for a 30-person manufacturing business.

"You can call us a multimillion-dollar company and were planning to get bigger, much bigger."

Having managed the move from science to business, they have devoted their energies over the past year to setting up a middle management needed to take ICP to the next stage.

By next June ICP will have moved from its Mt Albert factory to a new facility in Waitakere City.

Its board is looking swish, too, with former Finance Minister Ruth Richardson and professional director Don Clark now members.

The aim is to stay in NZ, but there are opportunities to contract out some work overseas.

ICPs products, like those from the rest of the biotechnology sector, have their biological origins in one of the cleanest, most natural and environmentally secure corners of the world, free from the diseases that could devastate the agricultural sector.

Dr Sharpin: "We talk about trading on our clean green image but the reality is that just means it's a level playing field. It doesn't make overseas customers buy your product; it just means there's no reason to think they wouldn't."

But gone are the days of Dr Sharpin making five marketing trips to the same US companies just to establish ICP's credibility.

Being market leaders in embryo transplants - a market with sales potential of over $100 million - means ICP's new products are now readily accepted by customers.

In terms of research and development, ICPs staff do "D." The "R" comes from NZ's research base, the universities and the crown research institutes (CRIs).

"By the time you've chosen which of the research available you want to develop, you don't expect too many failures," says Ms Simmons.

However, that crucial CRI structure is under fire from many at the commercial end of our life sciences sector, who say too much of this country's research is never going to be saleable. The CRIs in particular are struggling to come to grips with the intricacies of patenting and licensing, without which even the best ideas have limited value.

Jim Watson, head of the country's biggest biotech company, Genesis, recently claimed that morale at the institutions was at an all-time low, because the business models they tried to follow were tying them up in a bureaucratic blunderland of blurred vision.

Ms Simmons and Dr Sharpin agree the CRI structure isn't delivering. Ms Simmons, a director of the Foundation for Research, Science and Technology, charged with distributing public science funding, says the CRIs are getting false messages.

"Instead of thinking how can I make the most of this for New Zealand's benefit, they're thinking how can I capture the most return to my CRI? Often in the very short-term."

Perhaps the biggest problem facing NZ biotech is the public perception that those in the industry are a bunch of genetic engineers, despite few local biotech companies actually doing that kind of work.

Ms Simmons: "Biotech and a lot of things done within that science, and a lot of genetic engineering as well, are excellent and necessary.

"It's a safety issue at the end of the day.

"And I find it ridiculous that it's okay to inject something that might have been genetically modified - like insulin - but you shouldn't eat it.

"We do damn good science [in NZ] but we need to get more of it out there as export products, because that's what is going to create the wealth for the future and ensure NZ doesn't get totally left behind.