Thursday 18 September 2003 Media Statement

New trans-Tasman biotech fund features in Govt response to Biotech Taskforce

A new $12 million fund to support trans-Tasman joint ventures in biotechnology is part of the Government's response to the report of the Biotechnology Taskforce, Science Minister Pete Hodgson announced today.

The fund, to be managed by New Zealand Trade and Enterprise, will offer partnership funding to New Zealand and Australian companies working together on biotechnology development, manufacturing and marketing.

The first call for proposals is due to be issued by July next year, with $3 million to be allocated in the first round. Further allocations will be made in 2005-06 and 2006-07. Eligibility criteria will be developed over the coming months.

Mr Hodgson said the fund addressed the Biotechnology Taskforce's recommendation that industry and government act to stimulate the formation of international biotechnology partnerships, with Australia noted as a priority.

The Biotechnology Taskforce was set up last year under the Growth and Innovation Framework, which identified biotechnology as one of three key sectors with high growth potential and economy-wide benefits.

The taskforce reported to the Government in May this year with 28 recommendations for action and an ambitious 10-year vision for the sector. This included increasing the value of biotechnology exports from the current $250 million to more than $1 billion a year.

Mr Hodgson said another important new initiative in response to the taskforce was a $2.3 million programme to support best practice in commercialising biotechnology research.

"The taskforce highlighted a need to improve the flow of good ideas from the lab to the market. This four-year programme will begin with an expert review of the state of our biotechnology research investment and its readiness for commercialisation. It will be followed up with workshops, seminars, individual mentoring and other measures to help scientists link their research to global market opportunities."

A further $1.2 million will be spent over the next four years to get better statistical
information on the development of the biotechnology sector, to track its growth.

"Overall the taskforce recommendations are a good fit with the Government's policies and initiatives to promote growth and innovation," Mr Hodgson said.
"This means most of the actions the taskforce suggests are being addressed by existing Government policy and work programmes. In this year's Budget, for example, we established a $4.8 million pre-seed fund that will help the commercialization of biotechnology research."

Mr Hodgson said he was pleased to see the biotechnology sector acting on the taskforce recommendations directed at the industry, including the establishment of a single industry body.

A new organisation – New Zealand Bio – was launched today from the merger of the industry group BIOTENZ and the New Zealand Biotechnology Association. It will receive $1.3 million of support funding from the Government over three years.

Biotechnology will also benefit from new cross-sectoral programmes designed to help growth and innovation in all target sectors. These were announced by Economic Development Minister Jim Anderton today and include science and technology education initiatives and a fund to support projects aimed at building capability within sectors.

Attached:
- Questions and Answers

Previous Item This Wire:
- table of Biotechnology Taskforce recommendations and Government responses

GOVERNMENT RESPONSE TO THE BIOTECHNOLOGY TASKFORCE REPORT
QUESTIONS AND ANSWERS

What is the most important message the Government has taken from the Biotechnology Taskforce report?

Growing the sector requires a partnership between government and industry: neither can achieve success on its own. Biotechnology is the quintessential knowledge-based industry. The government sector provides much of the knowledge on which new products are based, while a strong and capable industry is needed to turn this knowledge into value for New Zealand.

How will progress be monitored on the actions arising from the taskforce report?

Each of the 24 recommendations requiring government action has been assigned to a department, ministry or agency to implement. Ministers will oversee these actions. The industry's new joint body – NZ Bio – is expected to oversee and track progress on the actions recommended for the sector. The Government expects to sign a Memorandum of Understanding with the new industry body in the near future that will formalise the commitments to action.

What kind of ventures will the new trans-Tasman fund support?

The fund could be modelled on the Israeli joint venture fund "BIRD" – the Israel-United States Bi-national Industrial Research and Development fund. This fund cost-shares with Israeli and US companies the development to the point of commercial readiness of innovative technology-based products or processes. An example of the type of NZ-Australian joint venture that could be supported is a project under discussion between parties in Tasmania, New Zealand and Queensland to develop a compound found in seaweed that has potential as a herpes virus treatment.

What is being done to reduce compliance costs for biotechnology research?

Changes to the Hazardous Substances and New Organisms Act are now going through Parliament in the New Organisms and Other Matters Bill. These include streamlining the processes for importation and development of low risk substances and new organisms in containment, which will reduce compliance costs for researchers.

What is being done to address the tax issues the taskforce raised?

Policy work on the tax issues raised by all the industry taskforces is well under way, with members of the taskforce and biotechnology community assisting the Inland Revenue Department and Treasury. Issues include the role that tax changes might play in helping biotechnology companies – and small businesses in general – to get access to the capital they need. Officials are due to report to the Minister of Finance by the end of the year.

Are there any taskforce recommendations the Government has not adopted?

In two areas the Government has endorsed the intent of the taskforce's recommendations but taken a different approach. The recommendations on how to work with pharmaceutical companies and how to streamline regulations are being considered alongside other policy work in these areas. There is work going on across government involving pharmaceutical companies, with further work planned on identifying areas where New Zealand’s science strengths might lead to research partnerships with particular companies. On regulation, changes to the Hazardous Substances and New Organisms Act are already being considered by Parliament and work continues on how to reduce uncertainty in the processes of the Environmental Risk Management Authority.

Where does genetic modification fit in?

Biotechnology is much more than genetic modification, which is one tool amongst the many available to biotechnologists. It is an important tool, however, which is a key reason for the "proceed with caution" approach the Government has adopted following the recommendations of the Royal Commission on Genetic Modification. The Royal Commission recommended the development of a biotechnology strategy and this has been completed. The strategy provides the framework within which the taskforce recommendations are being implemented.

What is Government doing to encourage pharmaceutical companies to pursue biotechnology research in New Zealand?

The Government recognises that pharmaceutical companies play an important role in building an environment where there is knowledge and experience of commercialising biotechnology. These companies contribute significantly to international and domestic partnerships in commercialising local discoveries. The issues that pharmaceutical companies raise with government policy cut across a number of policy areas, including health funding, innovation policy and intellectual property. The Government is investigating a number of options for developing research partnerships with pharmaceutical companies over the next few months.

What is the response to the taskforce's recommendation for a Biotechnology Investment Fund?

The taskforce recommended "that industry and Government establish as horizontal Biotechnology Investment Fund in the order of $200 million to stimulate the commercial development of viable biotechnology research and to encourage growth in new companies". The Government expects the industry to take the lead in developing this fund. Once it has made some progress the Government will consider further how it could be involved.

What is the response to the taskforce recommendation to increase basic biotechnology research funding?

The taskforce recommended that investment in basic biotechnology research continue to grow to $300 million a year over the next five years. Current public investment is about $135 million. The Government recognises the importance of basic research in generating novel ideas in biotechnology. The funding available for basic research has increased significantly over the last few years with Budget increases for the New Economy Research Fund and the Marsden Fund. Further increases will be considered as part of the normal Budget process.

What is being done to ensure that the opportunities for biotechnology to enhance growth in other sectors are taken?

Primary industries are likely to be significant adopters of biotechnology and ICT. The Ministry of Economic Development and the Ministry of Research, Science and Technology will be following on from the Taskforce's work and assessing specifically how these enabling technologies can best be applied to stimulate growth in these sectors. They are due to report back to Ministers by March 2004. The Government’s Growth and Innovation Advisory Board has also launched a major agribusiness project to investigate how New Zealand's primary industries can reach their full potential for innovation and wealth creation. The board is working with government agencies and with private sector interests and intends to report to the Prime Minister by the end of the year.

ENDS

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