New Zealand Biotechnology Industry Growth Report

Publication date: Dec 2006

The New Zealand Biotechnology Industry Growth Report 2006 was commissioned by the Ministry of Research, Science and Technology (MoRST), New Zealand Trade and Enterprise (NZTE), and NZBio, New Zealand's national biotechnology industry body. It was completed by L.E.K. Consulting. 

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New Zealand Biotechnology Industry Growth Report (PDF, 2MB)

New Zealand Biotechnology Industry Growth Brochure (PDF, 694KB)

Introduction

New Zealand Trade & Enterprise (‘NZTE’), The Ministry of Research, Science and Technology (‘MoRST’), and NZBio believe it is critical to be able to measure and track the economic performance and growth of the New Zealand biotechnology sector. We have jointly supported the development of this economic report (‘the Report’) on the New Zealand biotechnology industry, the first of a biennial series, which is based on the Growth Measurement Framework developed by NZTE in 2003.

The objective of this report is two fold:

1. to measure sector performance and growth over time, and
2. to highlight New Zealand’s biotechnology successes and capabilities.

Our goal is to make this report more than just a useful compendium of statistics. We have attempted to highlight the many qualitative successes of the New Zealand biotechnology industry in addition to measuring its quantitative progress, and to highlight opportunities and constraints as the sector moves forward.

This report is structured in seven key sections:

• The State of the Sector (Section 5) provides a crisp overview of the sector which over time will provide a longitudinal perspective of the sector’s health and growth and its role within the broader New Zealand economy.
• Financing and Deals (Section 6) assesses the ability of the sector to attract funding and its ability to attract deals and collaborations to facilitate the commercialisation of the sector’s products and technologies.
• The Products and Technology chapter (Section 7) discusses the activities and capabilities of the sector and highlights the achievements being made by New Zealand biotechnology organisations.
• The chapter on Research Institutions (Section 8) describes the contributions and capabilities of biotechnology research in the public sector and higher education sector which underpins the industry’s long term success.
• Public Policy (Section 9) reviews changes in the broad areas of public policy relevant to biotechnology and will over time monitor the progress of the government’s policies and initiatives in the sector.
• Within Industry Perspectives (Section 10) we examine perspectives on the current state of the sector from domestic and international participants and highlight issues and concerns and their views on the industry’s potential.

We have also created appendices which provide a snapshot of biotechnology activities for each key region and across major biotechnology application areas of human health, medical devices and diagnostics, agricultural biotechnology and industrial biotechnology. Additionally, we have included appendices on the key technologies employed by New Zealand’s biotechnology sector and a description of New Zealand as an investment location for biotechnology in order to educate international investors on New Zealand and its business environment.

The study period extended from 9 June to 31 October 2006 and was sourced from a combination of publicly available information and interviews with industry participants. We have drawn upon existing publications and reports, notably from government sources such as Statistics New Zealand, the Ministry of Research, Science and Technology, NZBio, New Zealand Trade and Enterprise, and Investment New Zealand as well as other non-government sources such as the New Zealand Venture Capital Association.

We have also conducted a number of interviews with industry participants both in New Zealand as well as internationally. We would like to express our gratitude to all of those organisations and individuals who have responded to our requests for information and interviews, and sincerely appreciate the time and effort
contributed to the generation of this report.

Within this inaugural report are a number of key findings:

• The sector continues to grow at a robust pace, driven primarily through growth in private sector biotechnology activities supported by a stable public sector. 
• The sector encompasses a diverse range of activities. New Zealand has particular strengths in the fields of agriculture, animal health, forestry, human nutraceuticals and pharmaceutical medical research. These capabilities reflect New Zealand’s historical focus on the primary industries as well as the strengths it is building in relatively new areas, such as human health.
• Funding remains an issue but overall trends are positive, with more venture capital funds available, an increase in public offerings and creation of the SciTech index on the NZX to increase profile in the public markets. The increasingly fluid exchange of public and private funds between Australia and New Zealand is also positive.
• Products and technologies continue to mature and grow in commercial stature. New Zealand organisations currently have almost a dozen pharmaceutical products in advanced clinical development. In addition, momentum continues to build with key launches of agricultural, medical devices and industrial biotechnology products and diagnostics.
• The sector continues to collaborate actively with more than 75% of collaborations involving international organisations. This has lead to a growing number of significant commercial collaborations with both Australian (assisted by the trans-Tasman fund) and international organisations.
• Government funding and focus on the sector has also been positive. Direct funding of biotechnology programs continues to play a key role. In addition, funds designed to support the venture capital sector and to promote trans-Tasman links have played an important role in sector health and growth. Expenditures on international promotional activities (Investment NZ and NZTE) also appear to have paid dividends in terms of international profile and
  direct collaborations.
• The Biotechnology Taskforce set up in 2002 helped catalyse a variety of positive activities including the formation of NZBio which has been critical to enhancing the sector’s profile and building a community of participants which benefit from increasing critical mass.
• Other policy trends are generally positive including tax reforms, regulatory changes and increasing harmonisation with Australian and international regulatory standards.
• Perspectives on the sector reflect many of the above trends in terms of perceptions of vibrancy, growth, and increasing profile. Both external observers and participants note the excellence of New Zealand science and biotechnology in a wide variety of areas. Participants also continue to emphasises the sector’s relatively small size and distance from markets and funding issues, but believe the overall trajectory on these issues remains
  positive. 
• Overall, New Zealand remains a great location to invest in and support biotechnology activities. The small size of the sector, combined with its successful growth trajectory, has created a close and vibrant community that is committed to success and is characterised by an ease of “doing business” and a high degree of public/private cooperation. Participants
  and observers confidently predict continued sector growth and success.