Making Melbourne a magnet for science: the synchrotron is due to open in 2007.
These days, no competent national government can be without a strategic plan for developing its biotechnology sector. But in the case of Australia, it is the State of Victoria that is making most of the running, setting the goal of reaching the top five in biotech worldwide by 2010. As it reaches the mid-point of a ten year strategic plan there is evidence that the ambition could translate into reality.
GM to banish hay fever?
One eye-catching example of Victoria’s science is a rye grass,
currently under development in Melbourne, that does not cause hay
fever. This has been achieved by knocking out the genes for two
proteins, Lolp-1 and Lolp-2, that are the main causes of allergenicity
in rye grass pollen.
The plant has been tested in field scale trials and shown to be
equivalent to its non-modified counterparts in all other respects.
VABC has set up a joint venture with PGG Wrightson of Auckland, New
Zealand, the largest grass seed producer in the southern hemisphere, to
commercialise the non-allergenic rye grass.
VABC opened in October 2005 with a brief to apply high throughput
genomics and computational biology to crop plants. John Brumby,
Victoria’s Minister for Innovation, says this is key to future
prosperity in Australia, where agricultural commodities are the second
largest export.
“Low allergy rye grass will have a global impact. Anywhere with a
temperate climate where rye grass is a source of hay fever there is the
possibility of a cure,” said Brumby.
“This shows we are up there with leaders in the world of agribiotech.
We have identified the genes and taken them out of rye grass. The
beauty of this discovery is that it is good for human health and good
for agriculture.”
In any country building a synchrotron is a significant and expensive project. Unusually, in Australia the majority of the capital cost has been met not by the national government, but by Victoria, which put in AS$157 million (€94.6 million) to ensure the synchrotron would be built in Melbourne.
Largest investment
This investment is the largest sum a state government has ever spent on any aspect of R&D infrastructure, and Victoria is investing in a number of other high profile infrastructure projects.
These include the Dairy Innovation Centre, pulling together several existing groups working on husbandry and food products, which opens in January 2007; Bio21, a purpose-built cross discipline, translational research centre at Melbourne University; the Australian Stem Cell Centre, located at Monash University; and the Victorian AgriBiosciences Research Centre (VABC) at La Trobe University.
According to John Brumby, Victoria’s Minister for Innovation, “At present Ernst and Young ranks us at 10 or 11 in the world. The target of being in the top five is ambitious but achievable.”
The ambition is focussing on healthcare and agricultural biotechnology. While Victoria accounts for 5 per cent of Australia’s landmass, it is responsible for a far higher proportion of its agricultural output.
Somewhat embarrassingly for Brumby, Victoria’s agbiotech credentials are currently tarnished by a state moratorium on planting genetically modified canola. He is keen to note that the moratorium – which runs until 2008 – is on the commercial planting of GM canola and has no effect on any aspect of GM crop research.
Brumby openly admits the ban is at odds with Victoria’s biotech ambitions. But, he says, other GM products in development in Victoria currently, will offer more obvious human health and other benefits than the first generation of GM crops.
He believes this will shift public perceptions, “The history of GM shows that where it benefits human health the general public has been very supportive.”
Collision course in stem cell research
Meanwhile, Victoria’s ambitions have put it on a collision course with the Federal government in Canberra over stem cell research. The state is pushing for human therapeutic cloning to be legalised in the face a recent government decision not to liberalise existing law. While he would prefer a single national framework, Brumby has suggested Victoria may enact its own law to permit therapeutic cloning.
The most recent move was to commission a report by two of Australia’s top scientists, which was published earlier this month. This concluded that stem cell research worldwide has accelerated and Australia risks falling behind if it did not pass laws allowing somatic cell nuclear transfer.
This Monday (16 October) the Victorian government convened a meeting of scientists to consider the report and to suggest draft legislation. Brumby said the draft legislation will be made available to members of the federal parliament. “The [Victorian] government has been a leader in stem cell research and we will continue to lobby the federal government not to pass up this historic opportunity.”
Seeing research through to commercialisation
When it reviewed progress on its strategy in 2004, the Victorian government was forced to acknowledge that one shortcoming was that the sector has too many small companies that find it difficult to get consistent financial support. A lack of venture capital has led companies to list on the Australian Stock Exchange before they are mature enough for such a move.
One example of this is Virax Holdings Ltd of Melbourne, which recently announced plans to add a listing on the Alternative Investment Market (AIM) in London to its long-term membership of the Australian Stock Exchange (ASX).
The company aims to raise £5 million in the process, to fund a Phase II US and Australian trial of the lead product, a therapeutic HIV vaccine.
“We believe there are deeper pools of capital here [in the UK],” said David Beames, CEO, “There are more experienced biotech investors, and we are looking to find people who can understand our story a little better.”
In particular, Beames wants to tap institutional investors. “Currently we have 3,200 shareholders, of which the top 50 own 50 percent. The rest is a retail base with a very long tail, so it is a totally different make-up from what we would expect on joining AIM.”
In its ten years of being listed on ASX Virax has seen some severe ups and downs in its share price. Beames said this is great for investors that sell at the right time but a serious flaw in the system for anyone trying to grow a biotech company.
Virax has been held back also because there are very few biotech analysts in Australia. After ten years on a public market and investing AS$22 million in R&D, Virax’s current valuation is AS$15 million.
Acknowledging these problems in its 2004 review of its biotech strategy, the Victorian government said it would work to address the issues underlying access to adequate R&D development capital.
Despite some shortcomings, Victoria has declared itself the leading biotech sector in the Asia Pacific region. But with governments worldwide active on this front, it remains to be seen if it can claim a global top five spot in 2010.
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