NZBio speechIndustry and Regional Development
First, thank you to Brian Ward (CEO) and Jim McLean (Chairman) of NZBio for the invitation to speak tonight.
I would like to extend a welcome to you all and make special note of those that are joining us from overseas including representatives of AusBiotech, venture capitalists from Switzerland (Erich Sieber of Inventages) and the US (Dr Roger Wyse of Burrill and Co.), and business and government representatives from China and the UK.
That the inaugural national meeting of NZBio has attracted such broad international interest underlines the strength of New Zealand biotech, and its quickly growing reputation on the global stage.
New Zealand's biotech sector represents much of what is best about New Zealand. It is a growing success story built on Kiwi ingenuity and innovation that, in several fields, leads the world.
It is also a sector that has firm backing from this government. This backing stems from a recognition of the importance of the sector to our economy now and in the future. Indeed New Zealand's biotechnology sector was singled out in this government's core economic policy, the Growth and Innovation framework.
My colleague, Steve Maharey, the new Minister for Research Science and Technology, and for Crown Research Institutes, and I are both committed to the long term development of the sector.
So tonight, we are here to celebrate the successes. The sector should be proud of its achievements to date and in particular, its success in attracting recognition and opportunities internationally.
I would like to talk to you tonight about what we are doing to help you build on this success.
The government's biotechnology strategy has three main elements.
The first is to community engagement. Early today I was pleased participate in the launch of another vehicle to promote that, the Biotechnology Learning Hub. This will help link the sector to the next generation of scientists, and indeed consumers, of biotechnology. The hub should also facilitate a better understanding of biotech among educators.
The second is the provision of robust regulatory safeguards. The existence of sound regulatory framework that can be trusted by the public is essential. It provides the basis for having a public mandate for continuing to innovate and to deliver the benefits of biotechnology to the market and the wider community.
The third is this government's commitment fostering growth within the sector.
The proportion of government research funding going into the sector compares very well with other OECD countries. Last year, around $175 million went to research into biotechnology.
But research funding is of course just the beginning of the story.
For research to make it to the world marketplace, one thing we need to do is further thicken our international linkages. Last year we established the $12 million Australia New Zealand Biotechnology Partnership Fund to stimulate these linkages. Two weeks ago I announced the first grants totalling $6.76 million. However, this figure represents just 25 per cent of the investment being made in the four projects supported.
The Fund's criteria requires funds to be matched from commercial sources and from within Australian sources. The total therefore is $27 million across the four projects.
The organisations funded also show the strength and diversity of the sector. One is a Crown research Institute, another a privately funded spin out from university research, the third a publicly funded spin out from university research and the last a commercial company.
Measures to support the commercialisation of New Zealand biotech are gathering momentum. Later this month yet another initiative will come on line. Steve Maharey will open the Bio Commerce Centre in Palmerston North. This is being backed by a government grant of around $1.8 million.
We have also seen the roll-out of the Foundation for Research Science and Technology's Pre-Seed Accelerator Fund ($4.8 million in 2003), introduced to help bridge the 'valley of death' period, when development funding is need to bring projects to investor-readiness. To date around half of the projects supported have been in biotechnology related research.
Further funding for commercial projects is provided through the Technology for Business Growth (TBG) scheme. It has seen its funding increase two and half times in the last five year. Proacta was awarded a $1.1 million TBG grant just two weeks ago.
We have also established the Venture Investment Fund (VIF), to stimulate the provision of venture capital funding in our economy. The first VIF investment in biotechnology was made was by No. 8 Ventures and Endeavour into Proacta Therapeutics. Significantly, this investment has been successful in pulling in international investors; Roche and Genetech and Australia's GBS Ventures.
And taking the next step, this year two New Zealand biotech companies have listed on the Australian stock exchange - Living Cell Technologies and Neuren Pharmaceuticals.
These listings, the investment coming in through VIF, the trans-Tasman partnerships promoted through the Australia New Zealand Biotechnology Partnership Fund and the recent opening of offices in the US by Protemix and Proacta are all indicative of the progress being made by the New Zealand biotech sector in the international arena.
The trend towards internationalisation makes sense, and cannot be viewed as a loss to New Zealand. In all these cases, New Zealand gains from the international experience but, crucially, remains part of the key research and intellectual property generating engines of the companies.
But it is not just the funding bodies and companies that have been busy. NZBio has gone from strength to strength since its establishment in December 2003.
NZBio now has 85 corporate members and a well developed range of services covering special interest and regional groups. It has also been successful in building links overseas on behalf of members, particularly in Australia and the US. And as is evident by our being here tonight, it has also organised a fine inaugural conference.
The theme for this conference is “The New Zealand Advantage”. It is clear that the world is coming to see the advantages we offer in our ability to conduct high quality research and generate valuable IP across a range of specialisations.
The latest example of our ability to attract international interest was announced earlier today. The BioPacificVentures (BPV) fund was launched with an initial $100m available for investment in the food, agriculture and biotechnology sectors in Australia and New Zealand. Up to an additional $50 million is set to be raised on a first in basis.
The fund is a partnership of the Swiss-based inventages venture capital fund, AgResearch and Direct Capital in New Zealand. Its corner-stone international investor is Nestlé, through their investment in Inventages, and the corner-stone New Zealand investor is Wrightson. The Venture Investment Fund is also contributing.
Its management has a broad range of experience in biotech investment both locally with Andrew Kelly, previously general manager investment for Celentis and Bill Kermode, founding director of Direct Capital, and internationally with inventages investment managers Erich Sieber and Gunnar Weikert.
Crucially the management involves people with experience in biotech in both local and international spheres: Howard Moore, who founded Tercica in Auckland and saw it successfully listed on the NASDAQ, and Arki von Roy, who was European President of Bristol-Myers Squibb and has since been involved in a number of local companies including Proacta and bioinformatics company, Biomatters.
The world knows New Zealand as a producer of the world’s best food and agricultural products. The creation of this fund and the involvement of such well known international companies in it is a sign that the international community looks to New Zealand as a source of innovation.
I see the advent of BioPacificVentures as a mark of the success government, investors, business can deliver when they work together. I am proud of the government's role as a catalyst for this success. Both Steve Maharey and I want to see that we continue to build on this success.
But at the end of the day, it comes down to the world-leading quality of our science and our proven ability to innovate, but most of all, it's down to our scientists and business leaders.
Together, we have made an excellent start. I wish you well for the rest of you conference and for the future.