Biotech sector tipped to overtake meat

By SIMON COLLINS

New Zealand's fast-growing biotechnology sector will be bigger than the meat industry within eight years, says investment analyst Dr Claire McGowan.

McGowan, a microbiologist with Auckland-based investment bank Northington Partners, told a biotechnology network dinner last week that the sector's turnover would grow from $619 million this year to between $7 billion and $11 billion by 2010.

That would make it bigger than the meat industry, which had total sales of $6.7 billion in the year to last September.

McGowan said she found "a lot of interest in investment in New Zealand" at the recent Pharma and Biotech Licensing and Deal-making Summit in San Diego.

She was the only Australasian delegate at the summit, and believes she is the only person with a doctorate in microbiology working in New Zealand's venture capital industry.

"There are US funds that have invested in Australia and are investing in New Zealand in the next two months," she said. "So there is demonstrated interest down here. I think it is just beginning."

Dr Garth Cooper of Protemix last month said that US investors would not invest in New Zealand biotechnology until local institutions showed them the way.

But McGowan said the big pharmaceutical companies were more than happy to look at investing directly in New Zealand biotech firms because they were "looking to fill their pipelines" with new products that could be ready for the market in the future.

"They are moving out of the 'not-invented-here' syndrome and recognising that a cure for cancer is a cure for cancer, so they are increasing their investment overseas," she said.

Other advantages included New Zealand's highly developed primary industries, its "world-class human and animal health researchers", its "natural clustering of biotech players in Auckland and Otago" and its low costs and efficiency for clinical trials.

Candy Pettus of the NZ Biotechnology Group told the meeting that there was already an increase in clinical trials of new drugs coming to New Zealand.

McGowan said many New Zealand biotech projects were too small to interest the big US funds, which often had hundreds of millions to invest and wanted to concentrate their investments in a few projects which they could monitor.

She suggested that local biotech companies could overcome this by "bundling" some of their projects jointly.

She said New Zealand was still handicapped by the absence of some of the big pharmaceutical companies, and by tax laws which treated capital gains on employee share options as taxable fringe benefits. But she was determined to find ways around these problems.

McGowan also has an MBA and has worked for Pfizer, Genesis, Caltech and the Dairy Research Institute. She is the Auckland regional convener of the Association for Women in Science.