Innovation comes of age

There's a lot of chatter about innovation as the basis for economic transformation on both sides of the ditch and it's been going on for well over a decade. There are generally many naysayers when grandiose visions of world leading clusters, hubs, capabilities and investment opportunities don't miraculously appear after a couple of years.

The team from BioShares, the independent share publication which covers a portfolio of Australian stocks and holds an annual CEO and investor summit recently engaged with New Zealand Trade and Enterprise and brought to Queenstown 130 people who have dedicated many decades to building the Australian biotech sector.

This sector is now valued at A$36 billion, has 106 listed companies, boasts arguably one of the most significant deals in the global sector and has an increasing number of companies attracting investors, becoming profitable, paying dividends and being acquired.

Highlights of the year in review include:

• Mesoblast, a stem cell company acquired by US firm Cephalon for $1.83 billion;
• Acrux (trans-dermal drug delivery) now paying shareholders a dividend;
• Biota, an anti-viral company best known for developing the flu drug Relenza, which secured a non-diluting $231 million US BARDA contract;
• Between $500 million and $600 million working capital raised; and
• The biotech index outperformed the Australian Stock Exchange for the second year running.

These names may not mean much to New Zealanders, but the numbers should - and the fact that 10 years ago (and in some cases much more recently than that) these were the types of expensive and risky technologies we were constantly told New Zealand should not pursue.

The theme of the day for me centred around Blake Industry and Market Analysis co-founder Mark Pachacz's statement: "The ten years of biotech investment are now starting to pay off."

Many of these companies have been in existence for much longer than ten years and that investment is not just financial. The stalwarts of the industry have given up their lives, their talent and in some cases their health, to deliver new treatments for those that suffer from diseases and to deliver significant returns to shareholders who have stood by them when things perhaps haven't gone to plan.

Now we see a truly world class sector doing world leading deals.

Truly world class innovation is a long term game and it takes at least ten years. Patient investment and commitment to a course of action is key, but the biggest determinant is faith - faith in the people and the talent and that results will happen eventually.