Australian life sciences companies are increasingly looking beyond traditional Western markets for growth opportunities, driven by the pursuit of higher returns and strategic partnerships in developing geographies. While the United States remains a lucrative but challenging market, and established regions like Western Europe and the UK present their own complexities, a growing number of local players are casting their nets wider.
Türkiye: A New Frontier for Bioscience Investment
One of the most significant shifts is the burgeoning interest in Türkiye, a nation strategically positioned at the crossroads of Europe, the Middle East, and Asia. Boutique firm Bioscience Managers (BSM) has recently launched its largest fund to date, targeting US$100 million ($145 million) with a specific focus on Türkiye’s bioscience sector. This initiative capitalises on Türkiye’s growing reputation for technological innovation, which is now extending into the medtech arena, building on its strengths in fintech and gaming.
The BSM fund is notable for being the first foreign-backed fund dedicated solely to Türkiye’s bioscience industry. Melbourne-based BSM is collaborating with Maxis, a venture capital platform and a subsidiary of the prominent Turkish private bank, Isbank. Victoria Durrans, a partner at BSM, highlighted the firm’s long-standing interest in digital technologies, which aligns perfectly with the fund’s objectives.
Key drivers for this focus on Türkiye include:
- Government Support: The Turkish government is actively backing the bioscience sector.
- Lower R&D Costs: Research and development expenditures are generally more cost-effective in Türkiye compared to Western markets.
- Untapped Potential: While early-stage venture funds exist, there’s a perceived gap in funding for the later stages of development and commercialisation. Durrans noted that BSM is observing “real opportunity with deals there.”
BSM aims to raise capital from Turkish sovereign wealth funds, family offices, and strategic investors, with individual investments anticipated to be in the range of US$5-10 million. With US$250 million in funds under management, this move into Türkiye represents a significant strategic step for BSM, and Durrans indicated that further international ventures are likely as local fundraising conditions remain challenging. BSM, an arm of Phillip Capital Group, has a strong track record, having completed over 200 health investments and led more than 40 IPOs and mergers. The fund targets an internal rate of return of at least 20%.
Several Australian companies are already seeing value in Türkiye. Cynata Therapeutics has established multiple trial sites in Türkiye for its phase II graft versus host disease study. Similarly, OncoSil Medical is experiencing strong adoption of its targeted pancreatic cancer radiation treatment, with four hospitals routinely ordering the device and five more expected to follow. Early results from Ankara Bilkent City Hospital have been promising, with five out of the first six patients treated experiencing tumour reduction sufficient for surgical removal.
China: A Hub for Drug Development and Clinical Trials
China continues to be a significant destination for Australian biotech companies, not just for its market size but also for its capabilities in clinical trials, particularly in areas like cell therapies. AdAlta, for instance, is pursuing a strategy of acquiring early-stage Asian assets, primarily from China, to develop and commercialise.
AdAlta’s subsidiary, Adcella, recently secured its first asset: an oncology treatment for mesothelioma, known as BZDS1901. Adcella has acquired the ex-China rights to this therapy from Shanghai Cell Therapy Group. The company is now actively seeking investment from Australian venture capital funds that have been awaiting a concrete asset. CEO Tim Oldham estimates the program’s cost at US$14-19 million, which includes conducting trials compliant with FDA requirements. AdAlta is focused on advancing these studies under a US New Drug Application, emphasising quality, structure, and scalability of manufacturing.
Developing Nations: Niche Markets with Promising Returns
Beyond the major economies, several Australian companies are finding success in developing countries by tailoring their products and strategies to local needs.
Truscreen Group: This company specialises in cervical cancer screening, operating primarily in developing nations. Its portable Truscreen Ultra device, equipped with AI-enabled technology, can detect cancers in a two-minute procedure using precision lenses and electrodes. Truscreen has gained approval in 14 countries and is actively selling its device in India, China, and Indonesia, with plans to expand into Vietnam, Zimbabwe, Uzbekistan, Romania, and Mexico. CEO Marty Dillon argues that despite perceptions of lower profitability, the lower overheads and government support in these markets can lead to significant profitability for mid-sized companies.
Immutep: This cancer drug developer has forged a significant collaboration with India-based Dr Reddy’s Laboratories. The agreement grants Dr Reddy’s exclusive rights to develop and commercialise Immutep’s immunotherapy drug, eftilagimod alfa (efti), across India, Latin America, and the Commonwealth of Independent States (including Russia). Crucially, Immutep retains rights to key Western markets like the US, Europe, Japan, and Greater China. The deal provides Immutep with an upfront payment of US$20 million ($30 million) and potential milestone payments of up to US$349 million, plus royalties, offering a strong alternative to equity financing.
Recce Pharmaceuticals: The company has chosen Indonesia for its phase III anti-infectives trial, focusing on diabetic foot ulcers. This makes Recce one of the few, if not the only, ASX drug developer to conduct a study in its near neighbour, leveraging Indonesia’s high incidence of the disease.
Island Pharmaceuticals: Focusing on infectious viral diseases, particularly dengue fever, Island Pharmaceuticals is well-positioned to serve a cluster of developing tropical regions where the disease is prevalent. They also note that the disease is increasingly affecting developed nations, including Australia.
EZZ Life Science: This nutraceuticals company has a long-standing focus on China and has recently expanded into Vietnam, targeting its growing middle class. EZZ has also entered into a partnership with Chinese-focused AuMake International, making AuMake the exclusive global distributor for certain EZZ products.
These diverse strategies underscore a broader trend within the Australian life sciences sector: a willingness to explore and embrace opportunities in emerging markets, recognising their unique potential for growth, innovation, and strategic advantage.
