LACK of seed funding in New Zealand is strangling early-stage research vital for producing biotechnology businesses, a visiting entrepreneur and scientist says.
Peter Shepherd of University College, London, who was London Biotechnology Networks’ young entrepreneur of the year in 2002, said yesterday that he applauded recent government moves to expand venture capital funding through the New Zealand venture investment fund.
But money must also flow into basic research that generated commercially viable ideas that attracted venture capital and became businesses.
“There are world-class people working in New Zealand — the quality of research here is at least as good as I see in the UK.
“But they are being starved of access to funds,” the expatriate New Zealander said.
“High-quality research at that very basic level in New Zealand is being strangled: per capita funding is embarrassing.”
The lack of funding could lead to scientists losing interest in a career in the field, as well as the loss of key people overseas. Professor Shepherd, who studied at Massey University, left New Zealand 12 years ago for post-doctoral research at Harvard Medical School in Boston and Cambridge University.
He has since helped found Xcellsyz, a biotech company that has developed human cell-based methods to discover and test improved drugs for diabetes and obesity.
He is also working with some of Britain’s foremost experts on a second company that will look at signals telling cells what they can and cannot do — and find ways to overcome those signals.
“If we’re to achieve ultimate success, what we need to do is get all the really good ideas bubbling through in debate at the scientific level, educate the researchers to think commercially, provide the funding to turn those basic ideas into a commercial form, and then follow on with funding for large-scale development and implementation of those ideas,” he said.
Some parts of the New Zealand biotech sector were already on the international radar screen, particularly agricultural research.
There was scope to develop strengths in biomedicines, medical devices and biotech-related information technology, he said.
With limited New Zealand investment in the field, he urged biotech companies to look for funds from Australia, Singapore and Britain.
After a bear market, many investors were still waiting to realise returns from earlier investments before they made new ones.
But money was still available for well-developed ideas, or companies offering investors a clear exit strategy such as a trade sale, he said.
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