On October 9, Australia's biotech community completed its annual pilgrimage to Melbourne at the conclusion of Australia Biotech Invest 2015 and AusBiotech 2015. This year's conferences once again evidenced the primacy and importance of the biotech industry in Australia and the significant interconnections between Australia's research universities, primary care facilities and private concerns. For example, there is a federal government tax incentive allowing for a 45 percent tax credit for eligible R&D expenses, which has contributed to the growth of Australia's clinical trial expertise and its globally recognized drug, development and discovery practices.
One interesting aspect of Australia's biotech industry is the reliance by Australian companies on the Australian public markets to finance early-stage development. The Australian Stock Exchange lists over 100 publically traded biotech companies, from CSL Limited with a market capitalization of more than AUS$42 billion to a number of companies with market capitalizations of less than AUS$30 million. Due to a lack of a deep venture capital market, Australian firms continue to seek venture capital funding from US and European firms as well as partnerships and collaboration with US and European-based large pharma firms. In addition, Australian firms are gaining a sophistication regarding accessing US government funding in the form of non-dilutive capital. Australian firms have a keen appetite for unlocking the various regulatory paths for obtaining funding.
The Australian market also is following global market trends in the significant increase in digital medicine and precision medicine. For example, Adherium is focused on developing, manufacturing and supplying digital health technologies that address sub-optimal medication use. Clarity Pharmaceuticals is a privately held company which is focused on personalized medicine technologies to deliver targeted treatments of serious diseases. ResApp Health utilizes smartphone medical applications for the diagnosis and management of respiratory diseases. Each of these companies, and their competitors, are acting at the intersection of health care and technology, bringing paradigm changes to treatment effectiveness. As these products come to market they will face regulatory, privacy and commercial challenges, which will be particularly acute given the complex layers of overlapping and conflicting regulation in Europe and the United States.
Finally, China's importance as a market for Australia pharma continues to grow and become more complex. Australian companies face regulatory, cultural and legal hurdles as they bring their products to market in China. However, given their proximity to this market and the spirit of partnership developing between the two countries, Australian pharma companies seem primed to benefit from this massive potential market, and they may have some distinct advantages over their American and European competitors.