Hopes of bridging WA biomedical industry’s ‘valley of death’ as new round of incubator funding opens

Adrian LoweThe West Australian
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Camera IconBrandon Capital investment analyst Helga Mikkelsen. Credit: Andrew Ritchie/The West Australian

Major players in WA’s nascent biomedical industry hope an emerging start-up incubator program can help to bridge the sector’s so-called “valley of death” between research and commercialisation.

Medical professionals report difficulty being able to bring projects to a stage to make them attractive to investors without difficult to find significant capital expenditure.

A second round of applications have been invited for the national CUREator, backed by the Federal government and run by Brandon BioCatalyst, amid hopes further promising pre-clinical research and innovation projects can be identified and supported to encourage potential commercialisation.

Telethon Kids’ Institute Associate Professor Joost Lesterhuis and UWA medicinal chemist Matt Piggott created Setonix Pharmaceuticals to build on their work to develop tablet-based cancer immunotherapy. They were awarded $500,000 in the first round to aid their testing.

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After a research project of about four years, the pair began think about developing a drug “so it benefits patients rather than science”, Associate Professor Lesterhuis explained.

“To get a drug to registration costs tens or hundreds of millions of dollars — you need investors and a lot of know-how that is not necessarily academic,” he said.

“Funding is critical because of this ‘valley of death’ people talk about. We are able to do fundamental research and clinical research but we need to get professional investors on board.”

Perth-based Helga Mikkelsen, investment analyst at Brandon BioCatalyst manager Brandon Capital, said WA had internationally competitive researchers making world-class developments and discoveries. “We’re not just little isolated WA,” she said.

But despite “a lot of the right ingredients coming together” to support the industry’s growth in WA, missing was a broad reach of investors.

Camera IconBrandon Capital investment analyst Dr Helga Mikkelsen, centre, hopes the biomedical industry in WA can attract a broad range of investors. Credit: Daniel Wilkins/The West Australian

“We’ve got a lot of sophisticated investors and a lot of cash but not a lot of them touch biomedical despite the fact it’s a very exciting space,” Dr Mikkelsen said.

“Sometimes the risk is considered very high in the biomedical industry but compared to mining, they know that space well without considering those risks are equally high.

“I think what would be nice to see is if more local investors engage in the industry and back companies at the stage of growing.”

Associate Professor Lesterhuis agreed, saying the support of CUREator funding would allow his research to be “de-risked”. Many potential investors prior to the grant had been hesitant to back the work because it was too early. By being test if the drug would “fail fast and fail cheap”, “that means we might have something on our hands that could float”.

Dr Mikkelsen said the spillover impact of having up to three mid-sized biomedical firms in Perth could not be underestimated — scale the likes of CSL was not the only indicator of success.

“The generation of biomedical companies coming through now, and in not many years, can change the WA landscape substantially,” she said.

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