Leigh Dayton has written an interesting story in The Australian which highlights what can happen to an Australian life sciences company when it gets bought by an overseas company.
June 04, 2009
Australia's first dedicated stem cell biotech firm, Melbourne's Stem Cell Sciences, is shutting down, a victim of budget-cutting by its new California-based owner.
Up to 10 mostly scientific positions will be lost, according to an announcement to be made today by StemCells Inc.
The Palo Alto-based firm has already acquired all SCS's intellectual property for handling embryonic stem cells, the new embryo-free stem cells, gene manipulation technology, existing licensing relationships and a portfolio of more than 20 patent families.
Until recently, there were four Australian stem cell firms: SCS, Bresagen, Embryonic Stemcells Inc and Mesoblast. Melbourne's Mesoblast is the last biotech standing, after Bresagen dropped stem cell work and ESI moved to Singapore.
"Hopefully, (Australia) can learn from the experience and rethink our participation in the innovation system," said SCS founder and former chief executive, Peter Mountford. He said he understood the Melbourne closure was a cost-cutting measure by SC Inc, and that he had been told the British arm of SCS would remain open.
Stem Cell Sciences managing director Paul Bello was unable to comment yesterday.
California's SC Inc bought SCS last March for about $5million and clearance of a $US715,000 loan to SCS. The sale came with the expectation that the 20 Australian and British staff would remain with StemCells.
Although Science Minister Kim Carr has announced that under this year's federal budget biotech firms would have access to about $1.4 billion a year through research and development tax incentives, Melbourne-based biotech analyst David Blake said the demise of SCS proved these measures were "too little, too late".
He claimed the sector had suffered under the Rudd Government, which had axed the Howard government's popular $700 million Commercial Ready program. It provided dollar-for-dollar funding to start-up companies able to attract other investment funds.
In March, Mr Blake reported in Bioshares Weekly that 11 of the 128 life science companies listed on the Australian Securities Exchange had left the sector or would do so shortly. Yesterday, he predicted this trend would get worse.
Senator Carr was unavailable for comment.
www.theaustralian.news.com.au/story/0,,25584042-23289,00.html
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Wednesday, June 3, 2009
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