Latest / BioSpace / Stability, speed and strategy: Inside Australia’s early‑stage edge
Transcript
- speaker-0: Hi, my name is Jennifer Smith Parker, Director of Insights at Biospace, and you're listening to Denatured. In this episode, I speak to Jerome Barley, Commercial Director at Avion Medical, and Ryan Klein, Vice President of Business Development, US and APAC at Rosollian. We explore why Australia has become such an attractive place for early clinical development and whether it can evolve from a trial destination into a broader biotech powerhouse. Jerome and Ryan, thank you so much for joining this episode of Denatured, especially with our very, varied time zones here of myself in the UK, Ryan in the US, East Coast, and Jerome in Australia. So let's go ahead and kick it off. Jerome, if you can introduce yourself and then Ryan, that would be great. speaker-1: Thank you, Jennifer. my name's Jerome Barley. I'm the commercial director of Avion. So Avion are a full service contract research organization and research imaging specialist part are we are headquartered in Australia, based in Melbourne, so we fully understand the highly favorable research environment that Australia provides. And we also work globally with far far reaching capabilities. speaker-2: Yeah, thanks Jerome and hi Jennifer, right? Good morning, good afternoon, good evening, right? Different parts of the world. It's a pleasure for me to be here also. My name's Ryan Coin. I'm the VP of business development at Rosolyan and I oversee our BD teams in the US and the APEC regions that we support. as Jerome mentioned, I'm based in the US. Rosoleon is a US based company, our headquarters just outside of Philadelphia. We do have five labs in four continents around the world, of course including Australia. where our laboratories in the state of Queensland and Brisbane. So again, happy to be here. Look forward to talking to Jennifer and Jerome today also about Australia. speaker-0: Australia seems to have become a preferred location for early clinical work because of speed, cost, and quality. So let's talk a bit about more of those those three areas. And then also how does US and stability also increase interest? speaker-2: great question, Jennifer. I'm happy to to to give a quick perspective from the US side as a start. And I think you're you're a hundred percent right with respect to speed, quality, and cost, right? Australia has always been an attractive location for early critical trials. speed to start up, cost and tax incentives offered by the Australian government and ultimately the high quality that the entire system offers that is repeatedly recognized internationally by regulatory authorities around the world, including the FDA. So Over the last nine to twelve months, I think US instability and uncertainty has created another factor that has acted as a bit of an accelerator to increase interest in Australia, particularly from the US and US biotechs. And I think about this in terms of the word predictability. Well really the lack thereof. And I think that this has been driven by two factors. Primarily, one is regulatory instability. Concerns about staffing and changes at the FDA have led to some uncertainty around review timelines, around the consistency of communication. And in some cases, expertise in particular therapeutic areas. And the truth is whether this instability is real, in my opinion, is somewhat irrelevant, right? Because perception is important and it influences our decision making, whether we we like it or not. So for biotech companies in the US that may have some limited cash, this perceived uncertainty adds risk from a regulatory point of view and overall timelines. And the second factor is financial instability, right? Financing remains challenging in the US. NIH and other government Organizations have reduced some funding. Private sector investors are looking for companies that can generate human POC data and safety data more quickly. And the Australian clinical trial notification process allows that advantage that most other jurisdictions, including the US, don't offer. Right? We have an upfront, relatively heavy regulatory approval process. So, in short, right, when capital is available, we can all tolerate some extended development timelines and a little bit more risk. When funding is more constrained, we have some pressure to reach inflection points faster. And the speed that Australia provides creates this advantage. And it's a very competitive advantage that I think has at least temporarily drawn more Australian biotechs or US biotechs to take advantage of what the Australian community offers. So yes, I think US instability in twenty twenty six has created a competitive advantage that has been greater in Australia this year. We don't know how long that'll last, but I think for now it continues to to grow interest in Australia. speaker-1: Yeah, fantastic answer, Ryan. I think you hit the nail right on the head. I don't think Australia is winning because the US is losing. Australia has already been a g and always has been a very compelling place to run early phase clinical trials. What we're seeing at Avion with the sponsors that we're dealing with is that it's the increased regulatory delays and the funding uncertainty, as Ryan mentions, that are making particularly early phase sponsors, they're becoming a lot more risk conscious. So what Australia does provide is is predictability or certainty on top of that speed and quality. So what we're finding and what we're seeing at Avium is the sponsors are are starting to place a much higher value on on that certainty. So if you're a small startup biotech with an 18 month cash runway, every month matters. So Australia's predictable regulatory pathway, the the rapid study startup, the experienced sites and the high quality data that you get out that all the the major regulators recognize is a massive selling point. So sponsors, whilst they can't control global s uncertainty and it doesn't I don't think anybody can, what they can do is choose where to take that risk. And increasingly at Avion, we're seeing companies choose Australia because it offers a much more certain in an increasingly unpredictable environment. speaker-0: Yeah, and I think you say it perfectly both of you is that in the biotech field or farmer field particularly, having that stability is crucial to your pathway to drug development. So let me ask you about the regulatory aspect, particularly since you both mentioned that. How do you explain Australia's regulatory pathway for early stage trials to US or European companies that may not be familiar with it? speaker-1: Yeah, I think possibly the easiest way to explain it is that Australia removes the administrative burden and the admin administrative friction, but not the scientific rigour. When we're talking to our sponsors at Avium they they do sometimes come across and go, is it quick and simple because there's no scientific rigor there? Are you cutting through stuff? And we go, No, the the scientific rigour is there. It's just as safe and a efficacious as any other regulatory. What we do do really well is remove the administrative friction because the whole clinical trial setup by the TGA has been put down to the Human Research Ethics Committee. So they are the the the gatekeeper to clinical trials. So you submit to the Human Research Ethics Committee, if they accept the quality of the data and the quality of the trial, then they give it the approval and then we're simply a a notification system to the TGA, which is our equivalent of the FDA, the Therapeutic Good Administration. So the TGA oversight remains there. But it's not necessarily duplicated because the HREC is doing all that. So that means that the ethics committee institutions perform the detailed review, the T GA remains oversight, and that means that the studies can often commence in in weeks rather than many months. We're finding with at AVO and with our sponsors that if we've got all of the documentation in place, you can get from documentation through to ethics approval in about six to eight weeks and to first patient in about in about twelve weeks to sixteen weeks maximum. So you're talking a three to four month startup, which is is really phenomenal. But it's still got that scientific rigor there as well. So that's that's how I would think that the biggest advantage is. speaker-2: Couldn't have said it better myself, right? And I don't have too much to add. I think about it very simply in in those terms that Jerome mentioned, right? It's about shifting the regulatory burden or shifting the review of the data away from the regulatory authority and into the HREC and the institutions that are conducting the study. So most importantly, which Jerome emphasized a couple of times, is that the expectations around data, around safety, around trial design are no different than they are anywhere else in the world. it's just a matter of speed because the burden has been shifted from a regulatory review to the HRAC and to the site conducting the trial. So it's that responsibility for reviewing the data, reviewing the strategy, reviewing the plan has been shifted outside of the regulatory paradigm and into another group that is extensive experience, right? This is what they do. So it's not as if anything has changed with respect to the bar that is required before we're putting any any experimental therapeutics into humans, right? The bar is the same, safety expectations are the same, but ultimately it's speed and and oftentimes, right? I know we're gonna talk about the tax incentive and the cost advantages of Australia. Oftentimes speed is more important to a lot of US biotechs, right? Because time is actually money as well, right? And there are trade offs for the tax incentive, which we'll get to. There are no trade offs here with respect to speed and and time. it's faster. It goes much more quickly, as Jerome mentioned. You can get into that first dose in eight weeks, ten weeks, significantly faster than the review process in the US, which can take up to six months while your studies on hold during review of the I that I and D package by the FDA. And depending on how many questions and back and forth there is, it can extend to to eight months or even longer sometime. So That speed and alluding back to the first question, Jennifer, it's predictability, right? This is a very predictable review process, assuming you've put everything into the package that needs to be in there. And you can expect and plan ahead, knowing that your first dose and and that recruitment will start within that eight to ten week trial period. speaker-0: I was curious in the comparison with the US, but you answered it for me, Ryan, of that up to eight months. And then you're looking at almost a year essentially, and then you're looking just essentially with just a couple of months here, potentially or even weeks, is saying in Australia. that's that's vast money-wise. Okay. and you both have mentioned too about the tax structure here. So what role have state and federal incentives, especially R D tax credits, played in making Australia more attractive for biotech development? speaker-2: Yeah, I'll take a stab first. I'd start by saying I am not a tax advisor, right? The the country has a number of yeah, right. It's not our area of expertise, but we can certainly comment, right? And there are is great support within Australia, right? Homegrown tax advisory firms that do this extensively have a lot of experience and then there are global firms also that can advise global biotechs that are exploring Australia, but The most important financial incentive often is that R D tax incentive program or RDTI for all companies and more importantly for many eligible small biotech organizations that are not yet generating revenue, a significant portion of the RD expenditures can be recovered through a refundable tax offset the year following the study. So this effectively lowers the net cost of conducting the clinical trial in Australia. And you can essentially get a rebate the following year. That you can then apply to future studies. And those future studies don't have to be in Australia. That money can be used from my understanding anywhere. But there's a trade-off, right? Like I said before, there's no trade-off when it comes to speed. Speed is speed, right? You can get to where you need to go faster. some of the trade-offs for taking advantage of the R and D tax incentive is that these companies must create and maintain a local Australian entity that finances the trial. And then that local entity is the one that receives that tax rebate or that tax credit. In some instances, this local Australian entity retains some of the IP or all the IP that's generated during the trial. And there are a lot of some details, right? The devil's in the details, and this is where those tax advisory firms can come in. Evaluate the situation with each biotech company, understand what they're really trying to get by doing the trials in Australia, understand whether setting up that Australian entity and taking advantage of the tax incentive program is right for them. A lot of companies do it. Some end up deciding not to and simply taking advantage of the speed to start up. And then the other advantage is is the strength of the US dollar and some other foreign currencies. So in general, there's lower operating costs in Australia. So even if you don't choose to take advantage of the tax incentives, you also get cost advantages by running the study in Australia. So those two factors from a financing perspective, right? Is the tax incentive program and then lower operating costs in Australia. create capital efficiency for smaller biotechs and their funding partners value capital efficiency, right? It reduces financial risks and creates more value inflection points earlier in the clinical development program. So that creates in a lot of value for the biotech companies themselves. speaker-1: Beautifully said, Ryan. I think it it's important to say that R and D tax incentive has been one of Australia's strongest competitive advantages for years. The the maximum rate you can get is forty three and a half percent, upwards to forty eight and a half percent with some of the changes that may be coming through the budget. There are certainly hoops that you need to jump through to get there. As as Ryan has mentioned, you do need an Australian subsidiary. you do need to cross all your T's and dot your I's on your tax refunds and things like that to make sure that you are following the the letter of the law. But for eligible companies, particularly pre revenue small biotech companies, they can recover a significant proportion of the R and D expenditure. And you get that back important time, you get that back as cold hard cash. So, you know, we we've got s Avian's got companies and sponsors that are running five, ten million dollar trials and they're getting millions and millions of dollars cash back. So when you're a small company, that can materially extend your your cash runway, right? So when you combine that, as Ryan said, with the very fast and efficient regulatory environment, very efficient recruitment, favorable operating costs combined with the exchange rate, it it means Australia develops that really good value and ultimately the incentives get the companies through the door. It's certainly a a a cherry on top, but I think it's the quality and speed that that keeps them coming back and keeps them coming back. Probably also to note, and we have this discussion a lot at Avion, you don't need to have an Australian subsidiary or Australian entity to run clinical trials in Australia. That you only need it to get the R and D tax incentive. We have a lot of sponsors that come here and for some reason or another they they don't want to to get an Australian subsidiary. So then we can act as a local sponsor for them or other companies can act as a local sponsor. And they can still run trials in Australia without ever technically setting foot in Australia. so they can take advantage of the speed and the quality and everything else without having to run an Australian subsidiary. So you can do it either way, but if you can get that tax back, it's a substantial amount of cash back. And we're also now starting to see companies that will assess a clinical trial and that some of them are willing to to loan you your R and D tax incentive or a percentage of your R and D tax incentive up front so that you can use it to start your trial. And then they'll take that when it actually comes through. So it it is a very, very good system. and it's certainly one of Australia's strongest competitive advantages, but by by no means is it our only competitive advantage. speaker-2: And I just add Jennifer. Sure. Jerome mentioned, you know, you don't have to set foot in Australia to run your trial there, but I'd highly recommend it as a the US citizen who's been there a couple of times. Beautiful country, right? So great place to be. Highly recommend being on site when you get started. speaker-0: Yeah. Yeah. Still one of the countries I haven't been to. Still I will be one day I will doing w one else be spending extensive time there. That's my rationale instead of just going for a quick trip. So very much will be good. speaker-2: That's why we're doing this interview, isn't it? I got it. Yeah. speaker-0: Yeah, yeah, yeah, yeah. Exactly. This is kind of my plug-in right here. When we had our initial conversation, we were talking about the different regions within Australia. So Victoria and Queensland seem to be emerging as particularly active hubs. What are they doing well and how does that compare with other Australian states? speaker-1: Yeah, and and that's a great question, Jennifer, and plays into the previous question that it's not just the federal incentives that are creating an amazing environment for us for companies to come to Australia. The state level incentives are are also there. So Victoria and Queensland seem to be emerging quite well. Victoria has built an incredible mature life sciences ecosystem with outstanding hospitals, outstanding KOL knowledge, universities, biotech companies. They're developing a world class globally scaled manufacturing capability. and they have been a lot of time and effort in in doing that and they export themselves quite well. Queensland government has recently hopped in, they're spending a lot of money and they're investing heavily more in the translational aspect of research. And developing the whole precincts around things. They've got a radio pharmaceutical precinct and they've got a Salon Jean precinct. So that it's it's becoming very, very attractive, particularly for the it for the innovative therapies and the the new emerging therapies. One thing to say though about Australia, it is a great place and and most Australians are are nice people and they play very well in the sandbox together. The states are they're not competing, they're often complementary. So we find That sponsors don't often need to choose. They can leverage strengths across from one state to another. And certainly when we're we're doing feasibilities for sponsors' trials and stuff, we will canvas the entire country and we will pick the sites from the different states depending on on on their feasibility and then the advantages that they have. So it's definitely a strength across the country. But I'd say Victoria and Queensland have probably taken the front foot in in really trying to leverage this. There's a real business model and and driving Export and import into into the country. speaker-2: Yeah, agree. Rosolian being in Queensland, we engage quite heavily with local government organizations like Trade and Investment Queensland, TIQ, and Queensland Health. They were both incredibly welcoming for us as an organization as we invested in building our own facility in Australia back in twenty twenty two. And I know they collaboratively work together to actively attract international sponsors to run the studies there. And I think Jerome highlighted it pretty well. There are differences in what Queensland and Victoria do really well. Queensland's strengths, which Jerome accurately described, right, lie in integrated statewide clinical trial networks, and then particularly a focus on translational research. And there are a number of local institutions that are growing rapidly from government investment over the last five years, including the University of Queensland, TRI, the Translational Research Institute, QIMR Birkhoffer, Bogo R Road Innovation Junction, all significant investment that has continued to grow. Queensland's strength and translational research leading into clinical trials and and phase one studies. Queensland's also focused a lot on developing broad wet networks and and ways to improve and speed up patient recruitment, particularly from outside major metropolitan areas. So bringing folks in from more rural areas using teletrials, emphasizing decentralized trial operations. Again, to be able to get recruitment happening and accelerating more quickly. Not necessarily with a focus on healthy volunteer studies, right? There are hopefully lots of healthy volunteers, right? Not only throughout the world, but also in Australia, right? So much easier to recruit. But those phase one Bs that a lot of companies are adding on to their sad mad studies often require some unique recruitment strategies. And I think Queensland has led the way in Australia in order to do that. As we know, population is limited and that's something that that Australia just has to deal with, right? Twenty seven million people or so in Australia is about the size of New York or maybe a little bit smaller. So it doesn't have the advantages of size and number of patients to run trials for some therapeutic areas, but they've really focused on things like infectious disease, vaccines, oncology, rare diseases, tropical medicine, some very more focused areas, and then using some of these patient strategies to allow that recruitment for those patient studies to accelerate. And again, back to the very first question, right? This contributes to predictability. when you're running your trials in Australia. And I think that's something that Queensland has focused on and done really well. Victoria also incredible strengths where Avion is, right? Really the hub for homegrown biotech companies coming out of Australia is what has really happened there is early research. again, coming out of great institutions like Menache University, also locally there. And the Victorian government has also invested quite heavily in those organizations again, to lead the way in Australia. With continuing to try to recruit and bring global biotechs into the the country and continue to build what I'd call is this a sovereign clinical trial, not just clinical trials ecosystem, right? But discovery to commercialization is really what I think the ultimate goal is, is to use the clinical trial network and where they've really excelled over the last twenty five years as a way to continue to evolve and become that front to finish biotech hub. speaker-0: Well, on that end, we have to end, gentlemen. It's been a pleasure. We can talk about this for another hour in Australia, and I would love to, but we cannot. So thank you so much, Jerome, and thank you, Ryan. And if you'd like to listen to more episodes of Denatured, please turn to biospace.com. Feel free to send me a pitch at jennifer.smith-parker at biospace.com. Thank you.