Australia’s medical community has welcomed a new ‘patent box’ tax regime designed to encourage further investment into local medical and biotech research and development.

Under the regime, income derived from applicable patents will be taxed at 17%, rather than the 30% corporate income tax rate or 25% rate applied to small and medium-sized businesses.

Patents applied for after 7:30pm on May 11 (when Treasurer Josh Frydenberg gave his budget address) will be eligible for the patent box rules, which come into effect from July 1 2022.

The announcement was welcomed “wholeheartedly” by leading industry association AusBiotech, whose CEO Lorraine Chiroiu said research and innovation are “central” to the nation’s ability to compete globally.

“The patent box will help bridge the gap to commercialisation, and support companies to keep the development of their IP and the value they create from it – especially by manufacturing locally – in Australia to benefit Australians,” she said. 

“This approach is central to helping ensure that Australian manufacturers remain competitive on an international scale by bridging the gap between R&D and commercialisation.”

Steven Yatomi-Clarke, CEO of ASX-listed oncology biotech company Prescient Therapeutics, said the changes could “contribute to an enriched innovation ecosystem”.

“What I think could be a benefit in the short term in this is to attract overseas companies who are operating in Australia to actually generate some of their IP here,” he said. “Instead of just being commercial outposts where they’re selling drugs developed overseas into Australia they might be able to develop some of those technologies here.”

Prescient announces Peter MacCallum partnership

The patent box continues a streak of good news for Prescient Therapeutics. Last week the business announced it had entered a second partnership with leading oncology research facility The Peter MacCallum Cancer Centre.

Under the terms of this agreement, Peter MacCallum researcher Professor Philip Darcy will head up a team conducting preclinical development work on Prescient’s OmniCAR CAR-T platform.

CAR-T is a type of cancer therapy in which immune system cells (T Cells) are taken from a patient and genetically engineered to fight cancer, before being reintroduced to the patient to attack the cancerous cells.

OmniCAR is Prescient’s next generation platform for these therapies, designed to remove some of the challenges associated with safety and control of traditional CAR-T drugs.

This partnership represents the second such arrangement between Prescient and the Peter MacCallum Centre, with the two organisations last year announcing a similar agreement focusing on Cell Therapy Enhancement programs.

In April, Prescient also announced it would be increasing the dosage of its clinical-stage cancer drug PTX-200 from 35mg/m2 to 45mg/m2 following a safety review of its successful trial in acute myeloid leukaemia patients.

If you would like to stay updated on all future announcements and receive invites to upcoming company investor briefings, please register your details on Prescient’s investor centre.

Reach Markets have been engaged to assist PTX with investor communications.

Sources:

• AusBiotech, Budget delivers for biotech manufacturing
• Australian Treasury, Budget Speech 2021-22
• National Cancer Institute, CAR T Cells: Engineering Patients’ Immune Cells to Treat Their Cancers
• Prescient Therapeutics, Pipeline
• Prescient Therapeutics, Prescient signs CAR-T agreement with Peter MacCallum Cancer Centre 
• Prescient Therapeutics, PTX-200 AML Trial Progresses to Higher Dose
• SBS Australia, Patents for new medical and biotech developments bring tax breaks
• Smart Company, Budget 2021: $206.4 million ‘patent box’ scheme to encourage medtech and biotech investment