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Hotbed of life-saving innovation

Jan 01, 2012

While Australia’s growth spree can be attributed to the massive global demand for its mineral resources and prudent fiscal policies, much credit is given to its focus on innovation, especially in the fields of renewable energy and biotechnology.

“Australia’s true prosperity is based on how we have transformed our natural endowments to build an economy that relies on skills, knowledge, and innovation,” said Prime Minister Julia Gillard.

Set up in 2004, Mesoblast specializes in adult stem-cell research, and has multiple products in middle-to-late stages across such diverse areas as cardiovascular disease, orthopedics, diabetes, and immune conditions.

In just seven years, it has become Australia’s seventy-fifth largest company and fourth-largest life science company, with a market capitalization of $2.6 billion.

The company produces stem cells that trigger regenerative cells and support the local tissue to repair itself. These stem cells can be expended in very large numbers from a tiny number of cells and do not activate the immune system when implanted from one person to another.

In terms of strategy, Chief Executive Professor Silviu Itescu has built a business model around a cell type that lowers risk by outsourcing different parts of the production process, which allows Mesoblast to focus on R&D.

From day one, it contracted manufacturing to leading biologics manufacturer Lansa and forged a partnership in cardiovascular and neurological applications with Cephalon, one of the world’s top pharmaceutical distributors.

“Mesoblast is a late-stage life sciences company that has been substantially de-risked. We have global pharmaceutical distribution partners sharing the heavy load at the front end on cardiovascular and neurological programs.

We are well resourced financially to unlock full value from our technology by accelerating new programs such as Type 2 diabetes and lung diseases,” says Itescu.

“All of that creates the kind of de-risking that allows us now to move to the next level as a real global biologics company. We are clearly the world’s largest regenerative medicine company and the fact that we can do that in Australia says a lot about the strengths of Australian science and the strengths of Australian entrepreneurship,” he adds.

With parliament passing a carbon emissions trading scheme, renewable energy has assumed greater importance to Australian industry.
In fact, the Gillard government is committed to ensuring that 20 percent of Australia’s electricity supply will come from renewable energy by 2020.

Founded in Tasmania almost a century ago, Hydro Tasmania has become Australia’s largest water resources manager, and currently supplies 46 percent of the country’s renewable energy. And since 1998, Hydro Tasmania has exported its expertise through its consultancy arm, Entura.

“We sell consulting services in Tasmania, in mainland Australia, and also internationally, where there is significant hydro potential. For example, if you look at Africa, only 7 percent of the hydro potential is currently tapped, while in Southeast Asia, it is only 30 percent. That gives us a range of opportunities for Entura,” says CEO Roy Adair.

Hydro Tasmania also specializes in other remote-area power supply solutions, whether it be wind, solar, or bio-diesel.
Adair believes that as Australia moves towards its “20 by 2020” goal, 70 percent of its energy supply will be wind generated. Therefore, Hydro Tasmania has consolidated its wind farms.

Through companies like Hydro Tasmania, Australia is well placed to show the world how to effectively combine renewable energy resources with nonrenewables.

“We’ll be delighted to talk to any parties that are interested in tapping into the potential for sustainable energy production around the world by the use of the expertise that we have. We’ll be delighted to share that expertise with them and utilize it so that we can build commercially sustainable solutions,” said Adair.

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Australia 2012 was prepared for and originally printed in Foreign Affairs magazine.

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