The Australian life sciences sector has united to call for intervention from the federal government to ensure small-to-medium size pre-revenue companies can gain access to financial support during the COVID-19 pandemic.
A joint statement has been signed by AusBiotech, Medicines Australia, ANDHealth, BioNetwork Melbourne, Life Sciences Queensland and the Medical Technology Association of Australia. It follows a recent decision by the Australian Taxation Office to reject an application from AusBiotech to extend the JobKeeper program to pre-revenue life sciences companies.
"These life science companies are at the heart of the essential research and development of vaccines, repurposed and emerging therapies, diagnostics, digital solutions, as well as test kits and ventilators to combat COVID-19. They raise the quality of life for all Australians," said the organisations in the joint statement.
"The Government has acknowledged the unintended exclusion of other sectors and developed alternative tests. Charities, including medial research institutes, can now elect to exclude government revenue from the JobKeeper turnover test, thereby enabling them to continue delivering their vital services. Start-ups, including those in the tech sector who have gone through high-growth, can use the alternative ‘decline in turnover’ test that recognises that it may not be appropriate for an entity to compare their current monthly or quarterly GST turnover with the same period a year ago, for example when they are less than a year old."
The organisations say the failure to extend JobKeeper will mean pre-revenue life science companies will "lose up to a decade of substantial scientific and capital contributions."
"They face a myriad of challenges different from those of other industries. The unique business model enables them to translate research into lifesaving and enhancing products for patients, but involves very long timeframes and significant capital. Critically, life science companies are often not generating revenue for typically up to 15 years for therapeutics and seven years for medical devices.
"Therefore, they do not have revenue to show, nor revenue to reduce by 30 per cent, regardless of their fierce need for cash flow and reliance on venture capital, which is drying up during the COVID-19 crisis."
They say the risk is significant with the potential to "knock over the entire industry".
They added, "It is unjust to the sector to be left unsupported through this globally-challenging and unprecedented period. We cannot lose the social and economic benefits being delivered through the Australian life sciences sector."