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"Terrible outcome": Leading scientist says CGT change will kill innovation 🔬💸 · Money News

• 0:00
  S1: Great to have you with us tonight on Money News
• 0:02
  S1: across our network. It's hard to recall a more unpopular
• 0:05
  S1: federal budget in recent memory and history. The fallout from
• 0:10
  S1: our small business and start up sector has been enormous,
• 0:13
  S1: and it is growing by the day, and many successful
• 0:16
  S1: Aussies from both sides of politics. Clearly, people that have
• 0:19
  S1: historically voted for the Labor Party and also for the
• 0:22
  S1: conservative side of politics have had no issue all at
• 0:25
  S1: once criticising the budgets and, critically, the changes to the
• 0:29
  S1: discount on the capital gains tax, which is applied since 1999.
• 0:33
  S1: People who have made their money taking risks, innovating and
• 0:37
  S1: developing world leading technologies, including our growing and remarkable biotech sector,
• 0:44
  S1: which includes dozens of companies on the Australian Stock Exchange
• 0:48
  S1: and someone who has made a lot of common sense
• 0:50
  S1: about this today with his comments, is one of Australia's
• 0:53
  S1: top scientists, Professor Andrew Wilks, who developed a molecule to
• 0:57
  S1: treat a rare form of blood cancer, which was eventually
• 1:00
  S1: bought by the pharmaceutical giant G. Kay. He's on the
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  S1: line for us tonight. Professor, many thanks for your time.
• 1:07
  S2: No problem. James, good to talk.
• 1:09
  S1: We've heard negative feedback about Labor's tax plan from a
• 1:12
  S1: range of sectors. Are we safe to add the biotech
• 1:15
  S1: sector to that list?
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  S2: Yeah I think you're pretty safe there. I'm completely flummoxed
• 1:21
  S2: by by what's been happening. And I think it's a
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  S2: really terrible outcome for a sector that I've been involved
• 1:27
  S2: in and helped grow this last 20 or 30 years.
• 1:31
  S1: Andrew, an opportunity to you, firstly, to explain the research
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  S1: and work that you've done over the past few years
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  S1: in relation to rare forms of blood cancer? Please just
• 1:40
  S1: give us a summary of that work and how it
• 1:43
  S1: is helping patients today.
• 1:45
  S2: I was a young academic scientist. Well, you can tell
• 1:48
  S2: from my accent, I'm not from these parts. I came
• 1:50
  S2: from Liverpool to Australia and worked on the ways in
• 1:55
  S2: which blood cells communicate with each other. And so the
• 2:00
  S2: normal development of blood cells, and I discovered some interesting
• 2:05
  S2: proteins that were actually fundamental to how normal cells develop,
• 2:10
  S2: but also how cancers developed left academia sort of late
• 2:14
  S2: 90s to start a biotech company. And this is where
• 2:16
  S2: I came across the team of scientists to help develop
• 2:20
  S2: a molecule called momelotinib, which is an inhibitor of one
• 2:24
  S2: of these enzymes. And my colleague Chris Burns and I,
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  S2: we were very fortunate to be awarded the Prime Minister's
• 2:30
  S2: Prize for that. And this molecule is for actually a
• 2:36
  S2: bone marrow cancer, uh, a disease called myelofibrosis. And that's,
• 2:41
  S2: that's caused by a mutation in the gene that I
• 2:44
  S2: discovered all those years ago. And so our molecule, our
• 2:47
  S2: inhibitor is a good way to get in amongst, uh, those,
• 2:51
  S2: those cancer cells and switch them off and stop them growing.
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  S2: And I've, again, there's been a fair number of accolades
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  S2: around that myself and Chris and our whole team, I think,
• 3:03
  S2: are you're grateful to have been part of that. But
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  S2: I've also met some of the patients and absolutely, you know,
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  S2: forget about the Prime Minister's prize. That was absolutely the
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  S2: icing on the cake for me and my colleagues to
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  S2: meet people who truly benefited, whose lives had been changed by, by, uh,
• 3:19
  S2: by taking this molecule.
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  S1: Absolutely. It's so important, Andrew. But for those that want,
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  S1: what we really need here is for those in medicine
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  S1: like you and science to encourage them and incentivize them
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  S1: to take risk, go out on their own, and be
• 3:37
  S1: world leaders in their field. I'm wondering how tough things
• 3:41
  S1: like that are pathways like you took and your your
• 3:44
  S1: partners took, wondering how tough that will be in Australia now,
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  S1: and is it genuinely likely to be one of those
• 3:50
  S1: situations that could move some of our best and brightest
• 3:54
  S1: in the fields of medicine and science offshore?
• 3:58
  S2: I think, unfortunately, that's what's going to happen. The government
• 4:01
  S2: produced a document from the Department of Industry. It's called
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  S2: the ambitious Australia Agenda, and it talks about how we're
• 4:10
  S2: going to use knowledge and information and stuff like that
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  S2: to create new a new business sector, making new drugs.
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  S2: A whole bunch of tech. So that is incredibly enlightening.
• 4:24
  S2: Document came out and then the budget came out. And
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  S2: within the budget are a set of circumstances that will
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  S2: prevent any sane Australian scientists from starting a company. It's
• 4:40
  S2: the length of time it takes. It's how difficult it
• 4:42
  S2: is to get the money.
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  S1: Well, Andrew, let's talk about that for a moment. And
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  S1: I've heard these stories firsthand. And I know you're in
• 4:48
  S1: this space, but you're working in a sector where the
• 4:50
  S1: research money can be volatile. It can be very difficult
• 4:54
  S1: to obtain an even harder to maintain. And it is
• 4:58
  S1: the frustration of a lot of scientists and those in medicine.
• 5:01
  S2: Yeah. Look, I mean, when I left academia to start
• 5:04
  S2: my company. There was one person in particular who put
• 5:08
  S2: dollar one into the company. I've never forgot that guy.
• 5:11
  S2: He was an absolute diamond, and I think we were
• 5:15
  S2: very lucky to get that level of support. And from there,
• 5:18
  S2: the investment grew in the company that we were building
• 5:22
  S2: until ultimately, of course, it was bought by Big Pharma
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  S2: and away you go. But dollar one hardest dollar on
• 5:30
  S2: the planet to get in for a founder. This is
• 5:33
  S2: the longest sort of j-curve of value appreciation of long
• 5:37
  S2: dated capital appreciation. I think it's called. It takes ten
• 5:40
  S2: years before you've got something of real value from a
• 5:43
  S2: position of nothing. You have to be a real optimist
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  S2: to be an angel, to be an investor in that
• 5:49
  S2: sort of company. And then you have to be patient.
• 5:51
  S2: And now to have taken all that risk. And it's
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  S2: a significant risk for a product that takes such a
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  S2: long time to develop and where all the value arrives
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  S2: at the end. It doesn't make any sense, any sense
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  S2: financially as an investor to to put your money into
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  S2: something like that.
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  S1: Well, nor Andrew, nor does it make sense to just
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  S1: give a carve out or protections from these increased taxes
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  S1: to the tech sector.
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  S2: I think the tech sector have done very well, and
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  S2: they also have some of those same parameters of delayed, uh,
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  S2: success and, and, and where the value really appreciates only
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  S2: at the very end of the process. And I can
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  S2: understand why they have a similar point of view that
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  S2: that sort of their tech sector founders ought to be
• 6:33
  S2: looked after as well. But the thing that we have
• 6:38
  S2: is all of that plus the value of, of the proposition,
• 6:42
  S2: the value of the research, the value of the development process,
• 6:46
  S2: the value of the molecule in the end to the
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  S2: health sector, the vaccine for cervical cancer. Uh, Ian Fraser
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  S2: started all of that in Australia. You know, there are
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  S2: many examples of these sorts of things that have happened
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  S2: in the past. And my suspicion is that, uh, that
• 7:04
  S2: the way that all of this is now settling down.
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  S2: It's going to it's going to cut the knees off
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  S2: of of the ecosystem, the biotech ecosystem that's been developing. Um,
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  S2: and I don't know whether they appreciate that. I don't
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  S2: know whether they understand what the consequences are, but I
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  S2: can guarantee that they're, they're going to happen.
• 7:28
  S1: Uh, professor, we really appreciate your time. We've heard from
• 7:31
  S1: a range of sectors over the past two weeks. And hopefully,
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  S1: given the work that the biotech sector is doing, world
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  S1: leading work like your research, uh, which was eventually bought
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  S1: by the pharmaceutical giant GSK to help fight rare forms
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  S1: of blood cancer. Hopefully, the federal government will wake up
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  S1: pretty soon and scale this back dramatically. And if it's
• 7:54
  S1: about property, let's make it all about property. But the
• 7:57
  S1: wider impact on business and investment seems very, very unfair.
• 8:00
  S1: I really appreciate your time tonight on the program.
• 8:03
  S2: And thank you so much for the call. Thanks.
• 8:05
  S1: That's Professor Andrew Wilks joining us on Money News.