The report by MTPConnect, Australia’s Growth Centre for the medical technology and pharmaceutical sector, details the pandemic's significant hit to the value of companies, the shutdown of clinical trials and the drying-up of much-needed capital.
The report, which has been developed in partnership with L.E.K. Consulting, includes insights from 80 senior sector leaders and involved one-on-one interviews and a survey targeting high-level decision-makers.
It covers the period from February to May 2020. MTPConnect said a follow-up report will be published in the third quarter of 2020 to outline strategies and initiatives to position the sector for future growth.
The report, 'MTPConnect COVID-19 Impact Report', identifies five key factors across the value chain it says will affect the sector's growth over the next six to twelve months, including healthcare system burden, unemployment, supply chain disruptions, slowing of the innovation pipeline, and the opportunity to strengthen Australia’s clinical trials reputation.
MTPConnect managing director and CEO, Dr Dan Grant, said the sector has been battered while simultaneously fast-tracking vaccine, diagnostic, device and therapeutic research to fight COVID-19 and securing essential medical supplies.
“The medtech, biotech and pharma sector has not been immune to the pandemic,” said Dr Grant.
“While our startups, researchers and companies are significant contributors to the Australian economy, generating more than $5 billion in gross value add and sustaining nearly 70,000 jobs in 2019, our new report makes it plain that the sector is being tested now like never before.
“The MTPConnect COVID-19 Impact Report details concerns from sector leaders that tens of thousands of jobs in universities, research institutes and early-stage MTP companies are at risk. It documents fears that efforts to plug substantial revenue shortfalls at universities will lead to a rationalisation of research activities and damage to the commercialisation pipeline.
“Combined with the impact we’ve seen on clinical trials, where up to 90% of trials have been put on hold, the development and translation of new life-saving drugs and devices will inevitably slow. Our impact report has found commercial activity across the sector, as measured by the market capitalisation of ASX-listed MTP companies, has taken an $11 billion hit and many companies and organisations across the sector have seen severe declines in revenue and margins.
“Australia’s MTP sector has an enviable track record in delivering life-saving new devices and therapeutics. We’ve done it in the past with innovations like the pacemaker, bionic ear and cervical cancer vaccine and we’re poised to do it again with new COVID-19 vaccines, diagnostics and devices.
“As our report demonstrates, the MTP sector’s role has never been more important in driving Australia’s pandemic response and recovery and protecting the health of Australians.
“The world has seen how well Australia has responded to COVID-19 and been reminded of the quality of our health system and medical research infrastructure. So while the lockdown has shutdown many clinical trials, the recovery phase presents us with a unique opportunity to take our clinical trials sector to the next level,” said Dr Grant.
According to MTPConnect chair, Sue MacLeman, “As the number of global cases and deaths continued to rise, Australia’s MTP sector, which is on the frontline for research, translation, advanced manufacturing, prevention, diagnosis, management and treatment of infectious diseases, mobilised to meet the challenge.”
MTPConnect has also produced a supplementary report in collaboration with the Medical Technology Association of Australia. It details how the sector came together to collaborate with the government in response to the pandemic.
“Industry input into Federal Government Taskforce working groups has been integral to securing essential supplies of ventilators, testing kits and personal protective equipment for our healthcare system. And from these experiences, there’s no doubt that industry is uniquely placed to inform and deliver sovereign manufacturing capabilities and robust supply chains as part of future pandemic planning," said Ms MacLeman.
“MTPConnect too will continue its critical work to support the MTP sector through the response and recovery, which has included the recent launch of a rapid round of our Biomedical Translation Bridge program, specifically designed to support COVID-19 research projects,” she added.