Taking Australian medical research to the world
AustralianSuper members are helping make a difference to the health and quality of life of people around the world, by bringing important medical innovations to life. They’re also benefiting financially from the successful launch of Australian medical products in markets all over the world.
Australia is a global leader in medical research. In fact, our largest manufacturing export industry is medicinal and pharmaceutical products. It is worth $4 billion a year to the Australian economy and employs more than 40,000 people.
“AustralianSuper has been an early and enthusiastic supporter of the medical research industry”, says Terry Charalambous, Investment Manager at AustralianSuper. “Through our investment partners, like the Medical Research Commercialisation Fund (MRCF), we have access to the work of more than 60 medical research institutes in Australia.”
“One of the advantages of our size and expertise, is that members gain access to exciting opportunities at an early stage. This is a real bonus as it means we get to pick from the best investment opportunities, which have the greatest capacity to grow in value over time.”
Bringing the best ideas to life
Doctors, scientists and students in universities, research institutes and hospitals around the country are making medical discoveries every day that have the potential to change people’s lives.
The Australian government contributes around $9 billion a year to research and development to institutions like these to come up with new ideas.
Without the support of investors like AustralianSuper members, bringing those ideas from proven ideas to functioning businesses is difficult.
It’s a long journey involving teams of medical researchers, clinical specialists, business managers and investors and government. And given its direct impact on people’s health, it’s not surprising that the industry is highly regulated with lots of checks and balances along the way.
Here’s how the process works:
Once an idea has been discovered, it needs to be tested to see if it can be developed into a product concept. The research behind the idea is proven and reviewed by medical researchers working in universities, research institutes or hospitals– this step can be funded by the government or industry.
Clinical development phase
If an idea passes this test, it then goes into clinical development, which also requires money from investors or the government. This is where a drug, treatment or medical device is developed that can then be tested on real patients in clinical trials to prove it is safe and effective.
Approval, registration and production stages
Products that make it through this stage, then need approval from the relevant authority (like the FDA in the US) before they can be sold. A start-up company might be formed at this stage to manufacture and take the product to market.
Terry Charalambous points out that: “Once a product is brought to market, it is protected by patents (making it difficult to produce copies like in other industries), which is what makes it such an attractive investment.”
“AustralianSuper invests at different stages of the process, taking its pick of the very best ideas. There are many opportunities to make profits along the way. For example, sometimes the companies we invest in that develop these products are sold or listed on a stock exchange.”
A long-term investment with long-term benefits
AustralianSuper is one of the largest Australian investors in helping to move medical research ideas into business. The MRCF, which AustralianSuper members invest in, is able to look across all of Australia for the best ideas that have been developed through hospitals and universities. The size and scale of AustralianSuper gives us a real advantage in this area. It allows us to invest in the very best ideas and help Australians’ take these ideas to the world while at the same time growing our members’ retirement savings.
Investing in medical research innovations takes time to pay off, but the rewards can be significant.
Chris Nave, Principal Executive at MRCF said: “The shortest time from investment to exit for us has been five years, but in many ways it makes it’s a perfect asset class in superannuation because they have a very long-term investment horizon for their members,” he said.
It’s for this reason that medical research suits an investment like superannuation. Unlike assets geared to a short term gain, medical research is a long-term investment that aims to make incremental improvements that lead to larger benefits – for people’s lives, the Australian economy and members’ retirement incomes.
The impact of the Medical Research Commercialisation Fund
Making a cup of tea, jotting down a note or walking down the street are things we often take for granted. But for people living with chronic illness, ordinary tasks like these can be a struggle.
The MRCF is helping to change that. It develops technologies and innovations that help people with health conditions such as diabetes, cancer, and heart and genetic diseases.
Global Kinetics Corporation developed a wrist-worn device to help people with Parkinson’s manage their disease wherever they are.
Sold in 17 countries and manufactured in Australia, this smartwatch looking device “can be the difference between being able to work and being confined to home,” said Chris Nave, Principal Executive at MRCF. “Patients that haven’t been able to go out on their own for two or three years are now back out shopping or playing tennis.”
Cardiora is a drug developed by cardiologists at the Alfred Hospital in Melbourne for heart failure patients. People with this condition have trouble getting up and out of a chair and getting to the kettle, and can be in and out of hospital every few weeks for treatment. This new drug is in tablet form so patients can take it at home and stay out of hospital for longer.
Osprey Medical developed a medical device that reduces the amount of toxic dye going into people’s kidneys when they have an angiogram or stent put in. It has since been approved for sale by the FDA, the US government’s regulatory authority, and is now being rolled out to a potential total market in the US of over $1 billion.
Looking for more information on what matters? Head back to the It Matters page for more stories on your investments and more.
The views expressed in this article are those of the interviewee and not necessarily of AustralianSuper. The interviewee made their comments based on their experience and expertise. Members should obtain the PDS at australiansuper.com, assess their own financial situation and consider obtaining financial advice before making an investment decision.