The commercialisation of medicines and therapeutic treatments is a long and expensive journey. The scientific and regulatory hurdles are significant. Ensuring there is sufficient cashflow along the way is essential for such innovations to reach the market and eventually, patients in need.
Australia offers an attractive environment for biotechnology companies to invest their medical research efforts through conducting clinical trials and other R&D activities.
Miguel Payró is the Chief Financial Officer of GeNeuro – a Swiss clinical stage biotechnology company developing therapies against auto-immune diseases. With a focus on Multiple Sclerosis and Type 1 Diabetes, GeNeuro looked to Australia as a candidate for their next round of clinical trials due to the prevalence of these two diseases in Australia, along with our world-class health system.
For a small biotechnology company like GeNeuro, the critical benefit of the RDTI is the additional cashflow that it provides that can be re-invested in future clinical trial processes.
In order to benefit from the RDTI however, the Swiss company needed to Incorporate a subsidiary in Australia and find an advisor to assist in applying for the RDTI.
CharterNet began working with Mr Payró and his team at the end of 2016 to assist GeNeuro in incorporating in Australia, with their RDTI application process, and the remainder of the accounting/tax administration required for the Australian strategy to be a successful undertaking.
“Incorporating the Australian subsidiary of GeNeuro up-front meant that all costs associated with the clinical trial were separated from the parent company, as well as meeting a primary requirement of the RDTI. Isolating the Australian R&D costs from the outset was an important step in planning for GeNeuro’s RDTI claim. Not only does it ringfence the eligible costs for easy identification but setting up a clear & structured approach increases the chance of success in claiming the RDTI,” says Sameer Kassam of CharterNet. CharterNet also has a direct relationship with a number of CROs in Australia, and could hence liaise directly with them to identify and document eligible R&D activities for the purposes of the RDTI.
Clinical trials commenced in April 2017 and with the R&D activities eligible costs clearly identifiable, the first R&D Tax Incentive claim was lodged in July 2017 for the first 3 months of activity.
“It was as simple as promised. In less than three months, we received the money from the Australian Government,” says Mr Payró.
CharterNet was also able to assist in aligning GeNeuro’s Australian subsidiary’s financial reporting to that of its parent. The lodging of an ATO request to change the assessment year to the end of December meant that not only was GeNeuro’s reporting process more streamlined, but that a second R&D Tax Incentive claim could be made at the end of December 2017. The funds were received by GeNeuro a short time later.
The company’s first study of therapies for Type 1 Diabetes & Multiple Sclerosis was a success – both clinically and operationally.
As a result of the success, GeNeuro launched a second trial.
“The RDTI is an excellent scheme and is clearly a very powerful incentive to attract international research to Australia, where we can benefit from a top-class health system, high quality investigators, very good CROs and support from a tax & accounting standpoint from companies like CharterNet, who have provided us with stellar service throughout,” Mr Payró said.
As long as the RDTI stays in place, GeNeuro intends to continue performing future clinical trials in Australia. With the correct set up in place as a result of the Australian incorporation process, the Australian economy is poised to benefit from ongoing foreign investment. The CEO of AusBiotech, Mr Glenn Cross says, “The RDTI has been critical to Australia’s success in attracting more investment for the commercialisation of medical research because it stretches our medical-research dollars further. By fostering a strong Australian medical technology, pharmaceutical (MTP) and life sciences R&D sector, we are encouraging the long-term investment in Australia that creates highly-skilled jobs, attracts clinical trials and grows the economy we need.”
By helping companies effectively gain entry to the Australian economy and the RDTI, it’s hoped we can further propel such gains so they are felt within the biotechnology industry and across the broader economy.
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