Apr 17, 2019 04:36 PM

Australian University Signs $72 Million R&D Deal With China

(AFR) — Australia’s Monash University has signed a deal worth AU$100 million ($72 million) over 10 years for Chinese investors and local governments to commercialize research and development (R&D) coming out of the university's Melbourne campus.

Monash Technology and Transformation Institute (MTTI), based in Shenzhen, will incubate early-stage IP developed in the university's faculties of medicine, pharmaceuticals and engineering.

The announcement comes after the Australian government was criticized by universities for failing to put more money into R&D in its annual budget.

Monash deputy vice-chancellor for enterprise Ken Sloan said the decision to tie up with China was owing to the country's giant scale which made it invaluable for investment dollars, clinical trials and long-term sales.

“The majority of Australian taxpayer-funded research is never commercialized; that means the full potential for Australians and the international community is not realized.”

He said the “commercialization valley of death” between academic research and industry application was particularly bad in a country like Australia with just 25 million people.

As well, Australian philanthropic and industry-funded schemes had reached a saturation point.

“What Australia lacks and is likely never to have is a capacity to complete the development pathway.”

He said venture capital investment in China exceeded AU$200 billion in 2018 and the Shenzhen government (which is one of the partners) spends more than 4% of the province's gross domestic product on R&D.

The commercial partners, Shenzhen Junye Yungu Investment Development Co. Ltd. and Changjun Capital Investment Management (Shenzhen) Co. Ltd., are based in southern China and involved in management of science parks, incubation services and investment management. The other partners are Shenzhen Municipal and Pingshan District governments.

Mr Sloan said he was well aware of the other potential controversy in doing a research deal with China, the Huawei factor.

Huawei Technologies Co. Ltd. has been banned from tendering for Australia's 5G broadband network on grounds it might be infiltrated by the Chinese communist government.

“On IP security, we've talked to our partners about the fact we want to protect the university's interests. That wasn't a surprise to them. They have their interests to protect as well.

“This has reputational impacts for everybody. As a university we're an international organization. We are in India and Malaysia. And after all, we already do research in China.”

Pharmaceuticals and therapeutics

Mr Sloan said the biggest activity of MTTI would be pharmaceuticals and therapeutic goods.

“For pharmaceutical products you have to be close to the market.”

“The university wants to make a significant contribution to Victoria and Australia but to do that you have to be international.”

He said the university was not putting any equity into the deal but it would earn income once products reached commercialization stage.

It was a model that other universities in Australia would have to be looking at, even allowing for deep-pocket funds like the nation’s Medical Research Future Fund.

Monash University has run a graduate research school with Indian Institute of Technology in Mumbai since 2008 and has a medical school in Kuala Lumpur, Malaysia.

This story was originally published in The Australian Financial Review.

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