Spinning off, cashing up and branching out: Commercialisation ...


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Spinning off, cashing up and branching out: Commercialisation ...

  1. 1. Nick Wells is a partner at Chapman Tripp Spinning off, cashing up and in New Zealand, where his practice focuses on biotechnology, energy, branching out: acquisitions and communications. Commercialisation Brendan Coady is a Partner in Gilbert + Tobin’s Intellectual Property Group. considerations for He has a particular focus on technology licensing and royalty rates, and the bioentrepreneurs in management of complex IP portfolios. Australasia Josephine Inge Nick Wells, Brendan Coady and Josephine Inge works in Gilbert + Tobin’s Date received (in revised form): 13th February 2003 Intellectual Property Group. Her work has a biotechnology focus. Josephine also works Abstract with the Commercial, Property and Corporate Groups on There are myriad issues to consider when commercialising a biotechnological innovation. In biotechnology-related issues. Australia, because of market structure, the tendency for biotechnology companies to list early in their life cycles has caused problems. A fledgling venture capital market in Australia has been partly to blame. The authors outline practical, strategic considerations for bioentrepreneurs in Keywords: life science, Australasia, focusing on innovations stemming from biomedical research. biotechnology, spin-out companies, venture capital, fund raising, IPO, tax reform, second board INTRODUCTION SPINNING-OFF You may recall the Red Queen from The biotechnology sector in Australia has Lewis Carroll’s ‘Through the Looking a reputation for generating world-class Glass’. She runs terribly fast yet goes research but being ‘deplorably bad’ at nowhere and to get anywhere at all commercialising such research.1 she has to run faster again. To some Australia’s poor ability to commercialise extent biotechnology companies in research successfully has been blamed on a Australia have suffered from the Red combination of insufficiently developed Queen effect – putting considerable commercialisation skills in the effort into expanding their businesses, biotechnology sector and inadequate Nick Wells only to find themselves working financial support by government and Chapman Tripp, harder and harder to maintain the private industry.1 For example, the New Zealand Tel: +649 357 9004 status quo. premature licensing away of ‘first-born’ Fax: +649 357 9099 This paper looks at some of the products to generate revenue is a E-mail: underlying reasons for this phenomenon recognised trend in the Australian nick.wells@chapmantripp.com and how industry and local institutions biotechnology sector.2 (such as the Australian Stock Exchange While there have been successes, Brendan Coady Gilbert + Tobin and the Australian Government) are Australia has missed opportunities to Australia working to overcome it. We will capture significant value from its research Tel: +612 9263 4065 approach our subject matter by outlining findings – for example, the discovery of Fax: +612 9263 4111 E-mail: bcoady@gtlaw.com.au the commercialisation considerations the cause of haemochromatosis (the most facing biotechnology companies common inherited liver disease known), Josephine Inge throughout three main stages of the as well as the location of the underlying Gilbert + Tobin, company life cycle, from spinning off genetic defect.1 Australia through cashing up (including listing on This section examines factors in the Tel: +612 9263 4254 Fax: +612 9263 4111 a stock exchange) to the expansion ‘spin-off’ phase that affect our ability to E-mail: jinge@gtlaw.com.au phase. commercialise innovations in the & HENRY STEWART PUBLICATIONS 1478-565X. J O U R N A L O F C O M M E R C I A L B I O T E C H N O L O G Y . VOL 9. NO 3. 209–218. MARCH 2003 209
  2. 2. Wells, Coady and Inge biotechnology sector. We deal later with complex processes of commercialisation.7 how market structure is also partly to This is reflected by the finding that blame, what is being done to address these Australian publicly funded research bodies problems and strategic considerations for (including 34 universities, 15 medical biotechnology companies wanting to research institutes and 21 divisions of the commercialise their innovations. CSIRO) collectively generated only AUD$99 million from licences in the year Institutional barriers to 2000.3 commercialisation While this represented a greater licence Much of our life sciences research income per US$1bn spent on research emanates from publicly funded research than either the USA or Canada, two-thirds organisations, including universities, of this income was derived from only 9 (13 medical research institutes and the per cent) of the 70 bodies surveyed and Commonwealth Scientific and Industrial one-quarter of Australian research bodies Public funded research Research Organisation (CSIRO).3 These failed to execute a single licence or to organisations must publicly funded bodies play a central role generate any income from licences in the exploit innovations in developing biotechnological year 2000.3 These findings indicate that a consistently with their innovations that have medical only a small proportion of Australian role in disseminating applications. They face the additional research bodies is commercialising and sharing knowledge challenge of recognising the value of an research in a successful manner. For the innovation and exploiting it in a manner majority, improvements can be made and that is consistent with their role in there is a general need among publicly disseminating and sharing knowledge.4 A funded research institutions for better major review of health and medical performance and outcomes when research in Australia revealed that there commercialising research. are institutional barriers to university researchers’ involvement in new business Broadening the portfolio of enterprises – especially in relation to commercialisation activities holding equity, directorships and moving Another relatively recent development in between academia and industry.5 both UK6 and Australian7 university With some exceptions, Australian systems is the use of spin-off enterprises to universities have generally not been commercialise IP. Up to 2000, Australian actively involved in the commercialisation university policies failed to specifically of research until relatively recently. They address the issue of start-up companies, have confined their role until the recent being focused on commercialisation past to the pursuit and exchange of through the licensing of intellectual knowledge through teaching, publishing property.7 Yet the formation of start-up and collaboration between researchers. In companies is one of the key factors to The formation of start- the face of dwindling support from the successful commercialisation.8 up companies is a key public purse, however, universities in It has been reported that the ability to factor to successful Australia have come under increasing form new business enterprises is more commercialisation pressure to attract private sector funding likely to bring long-term, substantial and to generate revenue by exploiting commercial benefit than licensing (ARC,3 intellectual property (IP). Similar citing the report of the National pressures are being experienced by Innovation Summit held in 2001). In turn, universities in the UK.6 however, licensing is key to the ability to While Australian public research bodies spin-off new commercial enterprises. today view it as an important part of their role ‘to encourage and facilitate Dealing with conflicting commercial development of intellectual interests and responsibilities property’,4 they are hindered by a lack of Researchers may find the duties they owe cumulative experience in handling the to any new commercial enterprise conflict 210 & HENRY STEWART PUBLICATIONS 1478-565X. J O U R N A L O F C O M M E R C I A L B I O T E C H N O L O G Y . VOL 9. NO 3. 209–218. MARCH 2003
  3. 3. Commercialisation considerations for bioentrepreneurs in Australasia with their academic interests. The mentors, and assist researchers to ‘publish or perish’ culture of most participate in entrepreneurial activities. universities rewards academics who The adoption by universities of Educating researchers regularly and freely share their knowledge commercialisation measures (eg numbers about business by publishing in academic journals. of patents) in assessing staff performance processes, management However (with the exception of countries will also assist to address cultural barriers and responsibilities will that provide a ‘grace period’), publication to commercialisation.8 help develop a culture precludes the ability to obtain patents – that is more aware of and positive towards the cornerstone of any licensing activity. Cashing up commercialisation This is illustrated in the Rescare case, in Sources of funds available to biotechnology which the inventor published an article in companies The Lancet about his invention shortly Figure 1 shows the important sources of after a provisional application had been capital raised by Australian biotechnology lodged with the Australian Patents companies.11 In 1998, stock exchange Office.9 When Rescare tried to sue a listings (initial public offerings, IPOs) competitor for infringement of its patent, were the third largest individual source of the competitor cross-claimed that (among income for biotechnology companies in other things) the complete patent was not Australia. By 2000, the importance of ‘fairly based’ on the provisional venture capital (VC) had grown specification. The Full Federal Court significantly as the local VC market agreed (and a subsequent application to matured, and VC was a much larger appeal to the High Court was contributor to income than public capital dismissed).10 The effect of this decision raising.11 was that the priority date of the patent More recent statistics have shown that was taken to be the date of filing of the venture capitalist confidence in Australia complete specification and not the date of and New Zealand continued to increase filing of the provisional application. This until the first quarter of 2002, a time meant that publication in The Lancet when capital confidence in the USA and rendered the patent invalid. Australian the UK was at its lowest levels in years.12 patent laws have recently been amended While local confidence among venture to introduce a grace period so that capitalists waned early in 2002, 65 per Funding to the publication in the 12 months prior to cent of Australian and New Zealand biotechnology sector by filing a patent application will not venture capitalists remained confident that Australian governments preclude the inventor from obtaining a the financial performance of their investee has greatly increased in patent. companies would improve until the end recognition of the Even in the absence of any patents, of 2002, compared with 38 per cent in sector’s economic importance knowledge gained for the benefit of a the UK.13 commercial enterprise may be valuable and confidential. Disclosure of such Government funding information may have commercial In recent years, both State and Federal consequences (and potentially be a breach government funding of the biotechnology of director’s duties in Australia and New sector has been greatly increased, in Zealand, where director’s duties are more recognition of the importance of the onerous than in the USA). The education sector to the economic future of Australia. of researchers about business processes and For example, in 2001, the Federal management, as well as business Government announced proof of concept responsibilities and potential conflicts funding grants (known as the ‘Biotech with academic duties will help develop a Innovation Fund’) as part of a wider research culture that is more aware of and initiative to promote research, positive towards commercialisation. The development and innovation in transfer of researchers to industry will help Australia.14 build a network of role models and Despite the increased availability of & HENRY STEWART PUBLICATIONS 1478-565X. J O U R N A L O F C O M M E R C I A L B I O T E C H N O L O G Y . VOL 9. NO 3. 209–218. MARCH 2003 211
  4. 4. Wells, Coady and Inge Source of funds raised by biotech companies, 1998 & 2000 to extended time frames for decision making and uncertainty about the identity 25 of the entity entering into the transaction. However the accountability which 20 government investment brings to a 1998 biotechnology company is a major Per cent of funds raised 2000 15 advantage in attracting private investors. For overseas investors particularly, the validation of investment by Australian 10 government bodies is necessary to confirm the credibility of the investee.16 5 The Australian government has recognised the importance of forging 0 partnerships with private investors in Private Second IPO Other VC START Parent Strategic Friends PDF placement offering grants company partner and angels biotechnology companies and has focused Source of funding its own investment programme on initiatives which encourage the Figure 1: Source of funds raised by biotechnogy companies, 1998 and 11 2000 (Source: Bivell and Thorburn ) participation of private capital through PDF = pooled development fund co-investment.8 Other government initiatives to assist the biotechnology sector in Australia The accountability which government funds for the biotechnology sector, include tax concessions and a cash rebate investment brings to a demand has outstripped supply. For scheme for small-loss companies that biotechnology company example, demand for one major source of undertake eligible R&D.15 While these is a major advantage in government funding – the Federal initiatives are not sources of income per se, attracting private Government R&D Start Grant Scheme – they can free valuable capital for cash- investors was so high in 2002 that it caused a $40m strapped biotechnology companies. blowout in the allocated budget. As a However, there has been criticism that result, the body administering the grants the eligibility criteria for R&D tax unexpectedly halted the review of any concessions or cash rebates are too new applications for a period of seven stringent to assist many biotechnology months.15 Nevertheless, government companies. funding remains one of the major sources of funding for Australian biotechnology Private sector support companies, most of whom are still in the In the past, a paucity of private-sector research phase and therefore are unable to support for the Australian biotechnology rely on income from sales as a revenue sector plus an overheated stock market stream.14 encouraged many biotechnology Government investment will always companies to list on the Australian Stock have different benefits and disadvantages Exchange (ASX) in order to generate to investment from the private sector. In sufficient resources to continue research Australia government investors tend to be and development. motivated by broader aims than simply a The overheated stock market was the ASX initiatives to financial return on investment – therefore result of ASX initiatives to encourage encourage developing issues such as control of intellectual developing industries, including lowering industries paved the property, and the location of aspects of of the entry bar to its main board.17 This way for many the business such as manufacturing may paved the way for many biotechnology biotechnology be influenced by policy imperatives as companies to list on the ASX earlier in companies to list early well as commercial factors. In addition their life cycle than would previously in their life cycles government investors are often structured have been possible. It is not surprising that as grant-making bodies, with complex such immature companies have small systems of corporate governance, leading market capitalisation. The fact that one- 212 & HENRY STEWART PUBLICATIONS 1478-565X. J O U R N A L O F C O M M E R C I A L B I O T E C H N O L O G Y . VOL 9. NO 3. 209–218. MARCH 2003
  5. 5. Commercialisation considerations for bioentrepreneurs in Australasia third of listed Australian biotechnology to list rather than entering into foreign The large number of companies have a market capitalisation of partnerships as a means of raising listed biotechnology less than AUD$10m14 reflects the large capital. companies in Australia sets Australia apart proportion of biotechnology companies from its regional that have adopted the strategy of listing The authors of the survey expect to see neighbours early in their life cycle. growth in individual local biotechnology A recent survey published by analysts stock markets in line with growth of the Frost & Sullivan Asia Pacific nominates industry as a whole – a trend they see as Australia as the clear winner in the being led by Australia. However, as we biotechnology race in the Asia Pacific.2 discuss in the section ‘Branching out’ One of the factors that they identified as below, listing is no guarantee of liquidity setting Australia apart from its regional and lowering the entry bar to assist neighbours was the large number of biotechnology companies to list on the publicly listed biotechnology companies ASX has created problems for the sector. in Australia (around 74 at the time of Biotechnology companies that list too writing18 ).17 By contrast, for example, early often end up in a cash-strapped Singapore has yet to see its first position, unable to raise funds from the biotechnology IPO. However, activity in market or from private equity.11,14,21,22 the region is set to change, with: The ASX is now looking for new ways to assist the biotechnology sector, • increasing awareness and interest in including the possibility of re-introducing local biotechnology stock markets in a second board for developing Hong Kong and South Korea;2 industries.17 The aim would be to enable differentiated shareholder rights, so that • aggressive venture capital investment VC providers can invest in listed securities (up to US$2bn) in local and foreign (which their trust deeds generally prevent biotechnology companies by the them from doing currently).17 This would Singapore Government, as part of a 15- provide listed companies with the profile year push to turn Singapore into a of listing but still allow them to access VC world class hub for biomedical capital after they have listed. research;19 The ASX has also recently amended the escrow provisions of the ASX listing Listing too early can • the establishment of a Biotechnology guidelines,23 which prevented founders, leave a company in a Strategy Council in Japan to review promoters and directors of newly listed cash-strapped position, deregulatory and other proposals in companies from selling their shares for unable to raise funds order to expand the value of the two years after listing. This was an from the market or from private equity nation’s biotechnology markets 20-fold additional deterrant to VC investment in by 2010 and enhance the industry’s young biotechnology companies. Under overall competitiveness;20 and the amended guidelines (effective since March 2002), an investor who meets the • the relaxation of listing requirements definition of ‘genuine venture capitalist’ for biotechnology firms in certain can obtain relief from the two year countries, in order to encourage the escrow provision. The four criteria that listing of biotechnology companies. For must be satisfied to meet the definition example, the Securities and Futures are:23 Commission rules for listing on the TAISDAQ stock exchange in Taiwan • the VC fund has a strategy of VC have been relaxed so that the investment and there are no personal completion of a new product is no connections between the investor and longer a prerequisite to listing. This is the founders of the company; expected to increase the number of local biotechnology companies looking • the fund holds no more than 30 per & HENRY STEWART PUBLICATIONS 1478-565X. J O U R N A L O F C O M M E R C I A L B I O T E C H N O L O G Y . VOL 9. NO 3. 209–218. MARCH 2003 213
  6. 6. Wells, Coady and Inge cent of the company prior to the employee share ownership plans.26 company’s listing on the ASX; Currently, employee share options are taxed when they are issued or exercised, • the fund has no more than one non- rather than when they are sold. They are executive director on the company’s also subject to rates of tax payable on board; and ordinary remuneration, rather than lower capital gains tax rates. AVCAL argues that • the fund has paid issue prices for the current tax structure is an impediment securities comparable to the prices paid to Australian biotechnology companies by other unrelated parties investing at attracting and retaining the best and or around the same time, and has not brightest employees. obtained any identifiable benefit beyond the opportunity to invest in the BRANCHING OUT: THE company. EXPANSION PHASE As discussed, there is a general perception Increasing VC market Together with increasing VC market that Australian biotechnology companies sentiment towards the sentiment towards investing in the generate world-class research but fail to biotechnology sector biotechnology sector, these reforms are compete internationally because of a lack may make private aimed at lifting private equity support for of funding and/or commercial nous. In equity a real alternative biotechnology companies and making recent times, biotechnology companies to listing for young biotechnology private equity a real alternative to listing have been are forced to go to IPO for companies in Australia for young biotechnology companies. cash flow in order to survive, rather than using funds raised through IPO for Encouraging further private strategic, mid- to long-term growth.27 equity investment in the This problem is compounded by the biotechnology sector trend in Australia for share prices to be In recognition of the difficulties being buoyed by newsflow.21 Thus public Public companies must faced by Australian biotechnology companies must make frequent make frequent companies, a number of reforms are being announcements to sustain public interest in announcements to touted by ASX and the Australian Tax their shares. For companies that have listed sustain public interest in Office, to assist the biotechnology sector. at a premature stage, this is problematic their share price; this is problematic for Australian Tax Office reforms include: because they do not have a strong product companies that do not pipeline in place and are not generating yet have a strong • broader concessional tax treatment of significant sales. This forces them to make product pipeline or venture capital funds, in particular24 announcements on trivial matters,21 if at all. significant sales ‘flow through’ taxation treatment for Public interest wanes, along with the Venture Capital Limited Partnerships company’s share price. This has been the (VCLPs) and exemption from tax on traditional path for biotechnology profits on the disposal of investments in companies on the ASX and has even eligible investee companies for foreign resulted in some companies choosing not to investors who are tax exempt residents list on the ASX because of the danger of of specific jurisdictions or partners in being tarred with the same brush. eligible VCLPs. The demands of public life (listing, reporting requirements, public scrutiny) • proposed alterations to tax regulations are an additional drain on resources that affecting the professional managers of immature biotechnology companies can VC funds, lowering their taxes on what ill afford. are essentially performance bonuses.25 Dollars and sense: the value of The Australian Venture Capital the VC experience Association Limited (AVCAL) is also Our advice to early-stage biotechnology urging reform of tax laws relating to companies is that they should look to 214 & HENRY STEWART PUBLICATIONS 1478-565X. J O U R N A L O F C O M M E R C I A L B I O T E C H N O L O G Y . VOL 9. NO 3. 209–218. MARCH 2003
  7. 7. Commercialisation considerations for bioentrepreneurs in Australasia Early-stage venture capitalists as a preferable source of connections and management rigour to biotechnology funding to listing on the ASX. While biotechnology companies. Venture companies should look access to VC funds has often been difficult capitalists in high-technology companies to VC as a preferable source of funding to for Australian biotechnology companies are actively involved in monitoring listing on the ASX in the past, the maturing biotechnology business performance and prosperity – a venture capital market in Australia may role they have adopted because of the improve the availability of VC funds in high-risk nature of such investments and the future. Venture capital investment in the length of time before returns may be the Australian health/bioscience sector realised.30 increased from AUD$26.54m in 1996/ Typically, venture capitalists involved 1997 to AUD$116.14m in 2000/2001.11 in high-technology ventures employ This reflects a similar increase in VC detailed monitoring mechanisms investment in the region. Asian VC involving the following:30 investment into the biotechnology sector has increased from US$30m in 2000 to • Extensive shareholder contracts US$106m in 2001. In the first quarter of Typically, venture capitalists hold a 2002, US$61.2m was invested, control block of shares and exercise a representing a doubling of VC investment broad range of governance roles. A into the biotechnology sector on the shareholders’ contract sets out the previous year’s figures if investment relationship between the venture continues at the same rate.28 capitalist and the VC-backed company We note, however, that economic and may be contingent on specified confidence among Australian and New financial or non-financial performance, Zealand venture capitalists has fallen since actions, dividend payments or future the first quarter of 2002, when it was security offerings. As such, shareholder relatively high compared with investor contracts provide a mechanism for confidence in the USA and UK.14 By the venture capitalist monitoring of a third quarter of 2002, only 3 per cent of funded company. venture capitalists in Australia and New Zealand expected the economic climate • Differentiated shareholder rights to improve over the six months to The ability of venture capitalists to March 2003. This has been reflected by monitor business performance will transaction volumes being much lower depend on specific shareholder rights. than market expectations. In light of By differentiating voting rights from global market turbulence and political cash flow rights during the lifespan of tensions, there is still much uncertainty venture-backed companies, venture among private equity investors in capitalists have developed a mechanism Australia and New Zealand, with 53 per for monitoring business performance. cent expecting deal volumes to improve This difference may be achieved in the six months to March 2003 (from a through unvested stock options, non- very low base), and 47 per cent voting stock or explicit contractual expecting deal volumes to decrease.29 rights to exercise votes depending on This is similar to the UK private equity specific targets. The rights (voting or market, where 55 per cent of venture cash flow) may be contingent on capitalists expect the environment to performance-related incentives or Dealing with venture become more challenging for raising new time-based milestones. The voting capitalists is an funds.29 rights of venture capitalists increase important pre-float step, because they bring Despite the currently downbeat when a VC-backed company is management rigour and private equity market, we advocate underperforming or as the venture experience to dealing with venture capitalists as an proceeds and needs additional biotechnology important – even essential – pre-float financing. Conversely, venture companies step, because they bring experience, capitalist control of voting rights & HENRY STEWART PUBLICATIONS 1478-565X. J O U R N A L O F C O M M E R C I A L B I O T E C H N O L O G Y . VOL 9. NO 3. 209–218. MARCH 2003 215
  8. 8. Wells, Coady and Inge decreases when management CONCLUSIONS performance and stock vesting There are many issues to consider when milestones are met. Cash flow rights commercialising a biotechnological may also increase as company innovation. In Australia, because of performance improves. market structure, the tendency for biotechnology companies to list early in • Board membership their life cycles has caused problems. A In the USA, venture capitalists hold the fledgling venture capital market in majority of board seats in 25 per cent of Australia has been partly to blame. cases.31 In Australia, venture capitalist In the last few years, Australia has dominance of boards is rare, but VC witnessed a growing number of VC firms representation on boards is a well- specialising in the bioscience/health recognised means of monitoring industry (from none to nine in two business performance and retaining years).11 These firms understand the some control over investments. nature of investment into the biotechnology sector, including the long- Venture firms may opt • Relationships with management term nature of investments. VC firms also to co-invest as a means Strong relationships and regular indicate a willingness to ‘co-invest’ in of spreading risk while interaction with management are biotechnology companies – this reflects maximising financial another means by which venture the high level of risk associated with support capitalists can monitor a business. investing in the sector, but also provides Experience with VC Reports of the total number of hours biotechnology companies a valuable firms assists (including site visits) devoted by opportunity to learn about accountability biotechnology venture capitalists to VC-backed regimens, public scrutiny, dealing with companies to come to companies range from 79 in France, the needs of different investors and terms with accountability through to 154 in the UK and 194 in rigorous reporting requirements. regimens, public the USA.32 The length of time Various incentives are being touted to scrutiny and rigorous increases with industry experience of increase local and international venture reporting requirements the venture capitalist and the growth capital funding of the Australian path of the funded companies, but is biotechnology sector. Coupled with Various incentives are not related to the size of shares owned maturation of the local venture capital being touted to increase local and international by the venture capitalist or market, these incentives should result in VC funding of the underperformance by the funded increased early private equity support of Australian company.32 the biotechnology sector and, in turn, biotechnology sector improved performance of listed Australian In Australia and New Zealand, venture biotechnology companies. Industry and firms may opt to co-invest with other local institutions (such as the ASX and the venture firms as a means of spreading risk Government) are also working to while maximising financial support to overcome some of the financial companies.11 Dealing with private equity difficulties being faced by biotechnology investors, particularly in co-investment companies. situations, is invaluable experience for The lessons for biotechnology biotechnology companies in preparing for companies is not to be lured into listing an IPO. This experience assists biotechs too early in their product development, to come to terms with accountability but instead to focus on other sources of regimens, public scrutiny (albeit on a funding, such as private equity and smaller scale) and rigorous reporting government grants. While VC funding requirements. The VC will often drive for biotechnology companies has been the company to IPO as a means of scarce in the past, the outlook in Australia realising its investment and potentially and New Zealand is now much more receiving very high returns on its original favourable, even in the face of global investment.33 market turbulence. Biotechnology 216 & HENRY STEWART PUBLICATIONS 1478-565X. J O U R N A L O F C O M M E R C I A L B I O T E C H N O L O G Y . VOL 9. NO 3. 209–218. MARCH 2003
  9. 9. Commercialisation considerations for bioentrepreneurs in Australasia companies seeking private equity should Application for Special Leave to Appeal to the approach firms specialising in the sector, High Court of Australia, Transcripts of Proceedings (URL: http:// and be open to the possibility of co- www.austlii.edu.au/au/other/hca/transcripts/ investment by two or more VC firms. 1994/S75/1.rtf). 11. Bivell, V. and Thorburn, L. (2002), ‘Venture Acknowledgment Capital and the Health/Bioscience Sector in The authors wish to thank and acknowledge Australia and New Zealand 1996–2001’, Damian Spruce’s research and assistance in the Pollitecon Publications, Sydney. preparation of this paper. 12. Deloitte Touche Tohmatsu Life Sciences Practice (2002), ‘Borderless Biotechnology’, References Deloitte Touche Tohmatsu. URL:http:// www.deloitte.com.au/downloads/ 1. Wills, P. J. (1999), ‘Health and Medical biotechfeature_1.pdf Strategic Review. Final Report. May 1999: The Virtuous Cycle: Working Together for 13. Deloitte Touche Tohmatsu (2002), Private Health and Medical Research’, Department of Equity Confidence Survey, Quarter 2. Health and Aged Care, Canberra. 14. Black, D. (2002), ‘The emergence of 2. Frost & Sullivan Asia Pacific, ‘Is Australia the Australian biotechnology’, in ‘Borderless black hole for biotech IPO’s in Asia Pacific?’ Biotechnology’, Deloitte Touche Tohmatsu, (URL: http://pharmalicensing.com/features/). Parsippary, USA, June. 3. ARC, CSIRO, NHMRC (2002), ‘National 15. URL: http://www.ausindustry.gov.au Survey of Research Commercialisation: Year 2000’, September (URL: 16. Liddell, C. (2002), ‘It’s a small biotech world http://www.arc.gov.au/publications/). after all’, Internet.Com, 14th October. 4. Monotti, A. L. (2002), ‘Allocating the rights in 17. ASX (2002), ‘The Code for Growth isn’t just intellectual property in Australian universities: DNA. It’s ASX’, ASX Operations Pty Ltd, an overview of current practices’, Fed. Law Sydney. Rev., Vol. 27, No. 3 (URL: http:// 18. Pricewaterhouse Coopers press release, 15th pandora.nla.gov.au/nph-arch/2000/Z2000- January, 2003 (URL: Oct-26/http://law.anu.edu.au/publications/ http://www.pwcglobal.com/Extweb/ flr/Vol27no3/monotti1.htm#P16_441/). ncpressrelease.nsf/docid/ 5. Wills, P. J. (1998), ‘Health and Medical C22300C5564F09FFCA256CAF0011C288/). Research Strategic Review: The Virtuous Cycle – Working Together for Health and 19. Herrera, S. and Landry, J. (2001), ‘Singapore Medical Research’, Department of Health and gambles with biotech payouts’, Red Herring, Aged Care, Canberra. 15th September. 6. Rodgers, P., Catton, D. and Duncan, G. S. 20. Anon. (2002), ‘Japan panel to propose (2002), ‘Practical experiences in starting up life deregulation to expand biotech market 20- science companies in the academic sector’, fold’, Austr. Financ. Rev., 24th November. J. Comm. Biotechnol., Vol. 8(4), pp. 273–280. 21. Trudinger, M. (2002), ‘We’ve paid the price, 7. Johnston, R., Matthews, M. and Dodgson, M. now let us work: Amrad boss’, Austr. (2000), ‘Enabling the virtuous cycle: Biotechnol. News, 23rd August. Identifying and removing barriers to 22. Trudinger, M. (2002), ‘ASX to help lift entrepreneurial activity by health and medical biotech’s public image’, Austr. Biotechnol. researchers in the higher education sector’, News, 28th August. Report funded by the Australian Federal Government Departments of Education, 23. AVCAL (2002), ‘New policy encourages Training and Youth Affairs; Health and Aged Australian Companies to IPO’, media release, Care; and Industry, Science and Resources 14th March (URL: (URL: http://pandora.nla.gov.au/pan/23213/ http://www.avcal.com.au). 20020424/www.health.gov.au/hmrsr/ reportpdfs/appendixg.pdf). 24. Leek, J. (2002), ‘Venture capital rules back on agenda’, in ‘The Week in Review. Gilbert + 8. Wills, P. J. (1998), ‘Health and Medical Tobin Weekly Tax Update’, 25th September. Strategic Review. Summary of discussion document. December 1998: The Virtuous 25. Young, P. (2002), ‘VC tax reforms could assist Cycle: Working Together for Health and biotech’, Austr. Biotechnol. News, 25th Medical Research’, Department of Health and September. Aged Care, Canberra. 26. AVCAL (2002), ‘Share ownership reform 9. Anaesthetic Supplies Pty Ltd v Rescare Ltd (1994) needed to attract best and brightest’, media 50 FCR 1. Release, 17th January. 10. Rescare Ltd v Anaesthetic Supplies Pty Ltd. 27. Discussion after presentation by Jeremy Rice, & HENRY STEWART PUBLICATIONS 1478-565X. J O U R N A L O F C O M M E R C I A L B I O T E C H N O L O G Y . VOL 9. NO 3. 209–218. MARCH 2003 217
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