Brandon Capital was created to solve a problem
We recognised the global strength in biomedical research capabilities across Australia and New Zealand but we were frustrated by the lack of translation of ideas from the lab bench to patients’ bedsides.
We wanted to develop a model which enabled the capital markets to engage with scientists to help bridge the funding gap, often referred to as the “The Valley of Death”, which occurs when therapeutic candidates need to progress from the test tube to the human testing phase. At the time, no other funds existed for such early-stage biomedical research translation in Australia or New Zealand, and no one was prepared to fund the gap.
In 2007, we worked hard to convince seven brave medical research institutes in New South Wales and Victoria, supported by those State Governments, to join the Medical Research Commercialisation Fund (MRCF) collaboration when we established our first fund with AUD$30 million under management.
We also saw a unique opportunity for Australian superannuation funds to help finance some of the most promising biomedical innovations coming out of Australia. We thought that super funds could be interested in investing in opportunities which improve the future health of the nation, while at the same time accessing strong deal flows offering above market-average returns. When our initial superannuation fund members joined the collaboration, it was the first time there had been a true partnering between research organisations and multi-billion-dollar superannuation funds to help drive innovation translation.
We currently have more than 55 medical research organisations across Australia and New Zealand within the MRCF network. Support is provided by the Victorian, New South Wales, Queensland, South Australian, West Australian state governments, as well as the Australian Federal and New Zealand governments, and leading Australian superannuation funds.
The sale of Fibrotech Therapeutics to Shire in July 2014 for US$557 million, the successful sale of Spinifex Pharmaceuticals to Novartis (June 2015) for US$725 million, and the sale of Elastagen to Allergan for US$95 million (February 2018) provide strong validation of the MRCF model and its ability to guide very early stage technologies through to commercialisation on the world stage.
By investing in biotech discoveries, our superannuation funds are generating long-term, superior returns on behalf of their superannuate investors. This is a virtuous circle where returns are generated for our aging population, while at the same time, the capital superannuates invest, supports health-enhancing discoveries.
Australia and New Zealand are two of the world’s leaders in biomedical research and drug discovery. The creation of medical devices is an opportunity for Australia and New Zealand to expand their advanced manufacturing capabilities, with huge potential for growth and expansion in the future.
We are lucky to have some of the country’s leading superannuation funds as investors. In addition to capital, our close working relationship with these organisations allows Brandon and our portfolio companies to access their investment knowledge and capabilities. In addition to this financial horsepower, CSL, being Australia’s largest and most successful biotechnology company, know a thing or two about developing and commercialising biomedical discoveries. Our portfolio companies are able to tap into this expertise, on a case-by-case basis, to guide their development.