From The Editor | September 2, 2014

More To Report From Australian Life Sciences -- And Some Best Practices From The BioMelbourne Network

By Louis Garguilo, Chief Editor, Outsourced Pharma


Australia just keeps making news.

It was again named one of the “happiest countries” in the world by the OECD. Scientific American Worldview ranked it fourth in 2014 in the global biotech industry, a one-year vault from seventh. For the fourth year in a row, the Economic Intelligence Unit annual Liveability Survey called Melbourne “the best city in the world to live.”

In a recent article on Melbourne-based Fibrotech’s acquisition by Shire, founder and CEO Darren Kelly iterated the value of starting his company within that nurturing life-sciences location. As might be expected with all the rosiness above, providence provided an opportunity to follow-up on that part of the Oceanic continent-country. I met with Michelle Gallaher, CEO of BioMelbourne Network, just prior to her moving from that role to start her own life sciences company in Melbourne.

Gallaher provided some best practices applicable to pharma-related organizations around the world, summed up as: plan for business success, not continuing funding; connect internally, but focus externally; small support goes a long way (literally); and the greater good of the region helps the locality.

The (Quick) Overview

The learning from Gallaher came quickly. Minutes into our discussion I’d received a fortnight’s worth of information. For example: “Melbourne was a growing research hub generating translational research, including in immunology, oncology and hematology. It started with people like Professor Don Metcalf (the ‘father of modern haematology’) known for research in identifying colony-stimulating factors (CSFs), at The Walter and Eliza Hall Institute. We have a large research hub for AIDS. We focus on malaria and hepatitis, and the infectious diseases that are relevant in our APEC region of the world.”

A deep breath and then, “We led in the field of cochlea: The bionic ear was first implanted and developed in Melbourne, and now we are developing a bionic eye. Years ago we started our pioneering leadership in IVF; 12 of the first 15 of the world’s IVF babies were born in Melbourne.”

Eyes, ears and babies immediately led to: “Seven Nobel prizes have come from Melbourne in physiology and medicine. So per capita, we have one of the best track records in the world in developing and launching Nobel laureates.”

Now, an industry support organization that grows Nobel laureates, that is real news.

BioMelbourne Network was founded 13 years ago, if not specifically to grow Nobel laureates, to support and promote all this life sciences activity in Melbourne’s southeast state of Victoria, and all of Australia by extension. The organization was seeded with government capital, but according to Gallaher, “within about 18 months we were self-sufficient.” She points to this funding independence as fundamental to understanding the Australian mindset, and a first best practice of note.

“The great thing with Australian government money, and I don’t know if this happens around the world,” she says, “is that often at the bottom of your grant it says you are expected to become self-sufficient. This ‘Stand on your own two feet’ culture is strong here. For better or worse, it is a clear expectation for business success.”

Support Of A Far-Off Cluster

Outsourced Pharma has written recently about the increasing importance of industry clusters. Gallaher says “a strong sense that commercialization is vital to getting full value from investments in our research engines spurred the creation of this association. And that means we need to make international connections.” Regional biotechnology support organizations can’t be myopic and internally focused; bringing the rest of the world to your cluster, or bringing your cluster to the rest of the world is as important as supporting what is happening within it.

An example is a detailed study BioMelbourne conducted for the Canadian government on digital health in Australia. “Our goal is to help the Canadians get access to our markets and provide them a wide-open door,” says Gallaher.

Another example involves Paul Stoffels, worldwide chairman, pharmaceuticals, for Janssen. As Gallaher tells it, “Dr. Stoffels was coming to Australia for the first time. We said, ‘This is the job of our organization, let us host you.’ He moved into our boardroom with a team of about 10, and in coordination with Janssen’s biotech scout in Australia, we brought all the companies to him.” The immediate result is that Janssen followed up with visits from their oncology and virology departments. “They have kind of discovered Melbourne,” says Gallaher.

Offshore travel is the other side of the coin. According to Gallaher, for Australians that starts with China. “China is on our doorstep and will become our number one trading partner. The largest trade mission to ever go to China from anywhere in the world came from Victoria. We had 620 companies, five ministers, a premier, and a governor. It was sensational.”

Of course China is not all of Asia. “I think Australia is beginning to understand it has choices. Look at Indonesia, right above us. It is the biggest untold story in biotech and pharma. (Editor’s note: not untold to readers of Outsourced Pharma).

Moreover, international pharma sees Australia as a more culturally familiar access point to the entire Asia Pacific region. Australia has strong trading relationships with all the regional players, including China, Japan, Indonesia, Singapore, Malaysia and Taiwan. Western Pharma can – and has been, particularly from Sydney, the capital city – leverage Australia’s existing relationships and prowess in the region.

Internal Mechanizations

“Clusters work,” says Gallaher, focusing internally for a moment. “The deeper our intra-connectivity, the bigger the support network to keep us self-sufficient and motivated. We all are great at talking about each other. Everybody knows what everybody else is doing,” she says. Gallaher mentions such activities as a ‘leadership lunch’ hosted every month for biotech CEOs. “We sit the new CEOs next to those who know the ropes to create a strong support network.”

Gallaher called herself a “simple optometrist” when we spoke, but she is her own good example of networking. “I worked in a veterans affairs hospital that was conducting a major glaucoma clinical trial. As head of the out patients clinic in ophthalmology I got dumped with the trial responsibility,” she laughs. “It turned out I was more interested in the clinical trial than my own patients.” Gallaher’s career went on to include experience at a biotech start-up, and she was head of government and public affairs for the Australia Stem Cell Center for the five years prior to her role at BioMelbourne. Now she’ll move back into the ecosystem with another life sciences start-up.

Sometimes, Gallaher says, with start-ups “it is the small dollars that add up to success.” Kelly of Fibrotech mentioned in our article that one of the most important things for innovators is to get on planes and go talk to pharma early on. When you are in Australia that is not a small expense. “All of our companies can get $2,500 grants three times a year for business development meetings, conferences or to talk with the FDA,” says Gallaher. Eighteen months ago, this might have been the difference in a go/no go decision even for a Fibrotech.” The Victoria State Government also has voucher programs of up to $20,000 to help secure IP or manage a clinical trial design. “These help both our service providers and our innovating companies,” says Gallaher.

Gallaher, born and raised in Melbourne, says she spent a little time living in Queensland, “just so I know about it,” she jokes, referring to her cluster competition along the coast in the north. So what about the other clusters?

The Whole of a Large Whole

Brisbane in Queensland has its own set of biotechnology companies and growing life science infrastructure. Cochlear, the company that developed the “bionic ear” – better known worldwide as the Nucleus cochlear implant, is headquartered in vibrant Sydney, the capital city between Victoria and Queensland that boasts a sizable and established medtech cluster and a number of pharma offices. “We are fabulous rivals and competitors,” Gallaher says with a smile. Do they poach opportunities from each other?

Gallaher turns serious. “Oh, no. We are rivals from an international perspective. If a pharma wants to headquarter in the APEC region, you might have Queensland and Victoria saying ‘put it here.’ But what we really need is all clusters growing significantly. There is a huge collaboration axis along the east coast of Australia, sort of cutting through Sydney, which has the big pharma, multinational offices like Eli Lilly and Merck. When Dr. Stoffels was here he also visited Brisbane. The more we have in Australia as a whole, the better. There has to be enough to lure companies and researchers from abroad. We absolutely think regionally and nationally.”

Perhaps that is our last point to learn from Australia this time around, one we have heard from a growing chorus throughout the competitive biotechnology industry around the world: combining regional assets to ensure local momentum and provide the critical mass that lures companies and individual innovators. And now Gallaher will be taking some of her own advice and taking advantage of some of this ecosystem she helped create.