Australia’s Little-Known Biotech Advantages and Risks

Most US biotech entrepreneurs and investors don’t consider Australia a thriving global hub. But there are compelling reasons to take another look at what’s happening there now.

Australia has become more attractive based on its willingness to allow fast, affordable clinical trials to help early-stage developers gather human data on new drug candidates. That low-cost, high-speed, high-quality early development capability allows for capital efficiency and amplified returns on venture investments.

In the early 2000’s, the Australian Government and industry leaders sought to create a favorable climate for biotech.  A quarter of a century later, those efforts are paying off. The Government offers a comprehensive regulatory framework, substantial incentives, and supports world-class research. 

The pro-growth business environment in Australia enabled Cambridge, Mass.-based Myeloid Therapeutics (TR coverage, Jan. 2021) to initiate the first ever application of in vivo mRNA CAR development candidates into clinical trials, for advanced epithelial tumors and hepatocellular carcinoma, respectively.

As an Australian by birth, this advance is meaningful to me. I finished my PhD research at the University of Sydney but departed for the greener innovation pastures in the United States. I became an American citizen and US-based biotech repeat-entrepreneur. It is particularly fulfilling to see Australia build its relevance in the biotech world anchored by major coastal US cities. I see the strengths of the US and Australian operating models and continually reflect on how we can work together to accomplish more.

Opportunities for American Biotech in Australia

Regulatory Advantages

Australia’s regulatory environment, spearheaded by the Therapeutic Goods Administration (TGA) is renowned for its efficiency and scientific rigor. This enables clinical trials to be initiated earlier than in other countries, based in part on a rational safety assessment. It often takes multiple years to move from concept to the clinic In the US. In the case of Myeloid, the Australian system allowed us to move from a white-board product concept to human clinical testing in eight months. 

The TGA is generally viewed as more open to collaborating with scientific entrepreneurs. Within the past five years, Australia’s streamlined process has made the country an attractive destination for early-stage clinical trials, particularly for companies focused on innovative advanced therapies, such as CAR-mRNA constructs and other cell and gene therapies.

Generous R&D Incentives

The Australian Government supports entrepreneurship through its R&D Tax Incentive program, which annually reimburses up to 43.5% of eligible research expenditures. This reimbursement can significantly lower the cost of early-phase trials, a key consideration for U.S. biotech companies operating in a capital-intensive, high-risk environment.

World-Class Infrastructure

Australia boasts a well-established network of research institutions with a proud history of scientific innovation and established clinical trial networks. In the progression of Myeloid Therapeutics, this infrastructure enabled rapid progression of its CAR-mRNA and myeloid-targeted therapies into the clinic. Getting to the clinic faster means collecting human data faster, getting the answers executives and investors want to see with less capital committed, so we can ultimately get the therapies to the patients faster.

Moving to a lower-cost environment doesn’t necessarily mean it’s lower-quality. Biotech companies have ready access to an excellent network of hospitals, and research universities such as The University of Sydney, University of Melbourne, University of New South Wales and University of Queensland. All regularly rank in the top 100 of world research universities. The Australians are justifiably proud of their operating setting and related mindset.

Gateway to Asia-Pacific

Australia is a member of the Five-Eyes strategic alliance — Australia, Canada, New Zealand, the United Kingdom, and the United States — all countries that ally and share national intelligence. This high degree of trust, at the senior levels of government, makes Australia a country well suited to the expectations of global investors. Australia has a much lower geopolitical investment risk than other parts of the world in 2025.

We see this as an important consideration as trade tensions between the US and China run high, despite the continuing progress of Chinese discovery candidates into global pharmaceutical pipelines.

Australia provides stable strategic access to the broader Asia-Pacific region. This region has 60 percent of the world’s population and a growing set of healthcare needs. US biotech companies can use Australia as a launchpad for expanding into large and growing markets like Japan, South Korea, and even to Taiwan or China, including for additional clinical development.

Beyond R&D to manufacturing advanced medicines

Recognition of the R&D tax breaks and fast regulatory framework in Australia prompted the Myeloid team to evaluate working in Australia. We saw an opportunity to expand further into GMP manufacturing.

In partnership with RNA Australia, a non-profit economic accelerator, and the NSW Government, Myeloid embarked on the design construction and development of Aurora Biosynthetics. Aurora is a novel private-public partnership focused on transforming the biotech ecosystem through advanced biologics manufacturing in Sydney. We expect it will bring significant investment opportunities to harness the Australian operating model described here.  

Challenges

There are risks to all investment, but after careful evaluation our team determined they are manageable risks.

Interstate Rivalries

Think California and Texas are fierce rivals? Or Ohio and Michigan? Try New South Wales and Victoria. Economic competition between Australian states is more intense here than in the US. It contributes to fragmentation that dilutes the labor pool, making it harder for companies to hire enough people.

Within the RNA therapeutics field, two states (Victoria and New South Wales) have designed separate “solutions” viewed as driving innovation and supporting drug development. Each state holds its own investment priorities.

New South Wales, with Sydney at the core, is focused on startups through mid-sized biotechs. Victoria, with an emphasis on working with well-capitalized publicly listed companies, has taken a different path.  Each path has innovation considerations. As entrepreneurs and company creators, we gravitated to NSW, where the emphasis is on building a local biotech ecosystem, that in turn will create broader network effects with global impact.

Australia’s land mass is vast, comparable to the contiguous United States. Yet the population is comparatively small — about 27 million. With a few urban centers attempting to become concentrated biotech economic zones, the main risk is spreading the talent pool too thin.

Talent Recruitment and Retention

Australia has a highly skilled workforce, but there’s no denying the magnetic pull of global biotech hubs Boston and San Francisco. There are reasons why so many talented Aussies emigrate to the US. Salaries can be lower in Australia. Career advancement opportunities are also fewer at this stage in the ecosystem’s maturation. Access to venture capital is more limited than in the major US biotech hubs. All of these factors make it harder to attract and retain top-tier local talent.

Development of advanced immunotherapies requires expertise in a range of disciplines, including translational research, regulatory strategy and affairs, and commercialization. As Australia continues to build up its biotech capabilities, it will attract some talented immigrants. Companies like Myeloid need to find a balance between developing talented local people and attracting people from elsewhere to move to Australia. This is a long-term strategy, but we have found it’s possible.

Geography

Australia is a long distance from major U.S. biotech hubs. It’s about a 14-hour flight from Sydney to San Francisco. This requires increased flexibility in collaboration and execution. Many parties have found a way to succeed by collaborating across wide geographies and time zones. But it also means that supply chain logistics require careful thought and increased reliance on local suppliers. This isn’t always easy for startups. Myeloid has learned to address local supply chain logistics and do so within cultural considerations on project teams.  

How to Succeed in Australia

Embrace Regulatory Benefits

Companies should prioritize leveraging the TGA’s efficiency to expedite timelines while using Australian trial results to support global regulatory submissions, including subsequent filings with the US Food and Drug Administration.

Leverage Tax Incentives

The R&D Tax Incentive can be a game-changer for companies managing tight budgets. Ensuring compliance with program requirements and working with local partners familiar with the system can maximize these benefits.

Collaborate Across State Lines

Rather than navigating interstate rivalries, ex-Australia parties including US companies can bring a collaborative mindset as an objective participant in economic growth. Myeloid Therapeutics continues to successfully build partnerships bridging research institutions and clinical sites across the Australian continent.

Invest in Talent Development

US companies can help deepen the talent pool by forming partnerships with Australian universities and advising on workforce training programs. Partnerships may include co-op programs. The Aurora Biosynthetics manufacturing site located at MacQuarie University, New South Wales, is one example of a co-op program where undergraduates can earn credit toward their degrees while gaining valuable career skills.

Companies can engage by guiding curriculum development and providing pro-bono mentoring to students, which Aurora does at The University of Technology, Sydney and The University of New South Wales.  

By investing in local talent, companies can build a long-term, skilled, and loyal workforce while reducing the risks of reliance on international hires and associated transfer costs. Offering competitive compensation and global career development opportunities can help to retain talent over the long term, creating a mutually beneficial situation for employees and employers.  

The Future for US Biotech Companies in Australia

With change as the only constant, investors will need to revisit established playbooks of company scaling and milestone attainment. As investors look to continue reaping high and higher returns on capital invested, American biotech operating managers need to re-evaluate their paths to bring new products to the global market.

The benefits outweigh the risks. It’s a good time to be building great biotech companies in Australia.  Looking forward to seeing you Down Under.