Market Research & Insights

Australia’s MedTech, Pharma and Biotech sectors hit hard by COVID-19 but play critical role in pandemic response and research: New Report

Health Industry Hub | June 22, 2020 |
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A new Australian report just released reveals the COVID-19 health crisis has had a significant negative impact across the medical technology, biotechnology and pharmaceutical (MTP) sectors, including startups, SMEs, large local and multinational companies, researchers, universities, service providers, industry organisations and investors.

The report (see below) by MTPConnect details significant hits to company values, the shut down of critical clinical trials and the drying-up of much needed capital to sustain research and development projects.

MTPConnect Managing Director and CEO, Dr Dan Grant, says the sector has been battered while simultaneously fast-tracking vaccine, diagnostic, device and therapeutic research to fight COVID-19 and securing vital medical supplies.

“The medtech, biotech and pharma sector has not been immune to the pandemic,” Dr Grant says.

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Commercial activity across the sector, as measured by the market capitalisation of ASX-listed MTP companies has fallen $11 billion (or 5%) from $211 billion in February 2020 to $200 billion in May 2020. While this decline is lower than the corresponding 24% decline of the S&P / ASX All Ordinaries index over the same period, it is primarily driven by the steady market capitalisations of CSL and ResMed, two companies that have both played significant roles in responding to COVID-19 by trying to develop vaccines / therapeutics and medical devices, respectively. Excluding these two companies from the analysis reveals the rest of the Australian sector has experienced nearly a 16% decline in market capitalisation, akin to the S&P / ASX index over the same period.

Dr Grant said “While our startups, researchers and companies are significant contributors to the Australian economy, generating more than $5 billion in gross value add and sustaining nearly 70,000 jobs in 2019, our new report makes it plain that the sector is being tested now like never before.  

The MTPConnect COVID-19 Impact Report details concerns from sector leaders that tens of thousands of jobs in universities, research institutes and early stage MTP companies are at risk. It documents fears that efforts to plug substantial revenue shortfalls at universities will lead to a rationalisation of research activities and damage to the commercialisation pipeline.

“Combined with the impact we’ve seen on clinical trials, where up to 90% of trials have been put on hold, the development and translation of new life saving drugs and devices will inevitably slow.

“Australia’s MTP sector has an enviable track record in delivering life-saving new devices and therapeutics. We’ve done it in the past with innovations like the pacemaker, bionic ear and cervical cancer vaccine and we’re poised to do it again with new COVID-19 vaccines, diagnostics and devices.  

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“As our report demonstrates, the MTP sector’s role has never been more important in driving Australia’s pandemic response and recovery and protecting the health of Australians. 

“The world has seen how well Australia has responded to COVID-19 and been reminded of the quality of our health system and medical research infrastructure. So while the lockdown has shutdown many clinical trials, the recovery phase presents us with a unique opportunity to take our clinical trials sector to the next level,” Dr Grant commented. 

The report includes insights from 80 senior leaders from the sector and involved one-on-one interviews and a pulse survey targeting high-level decision makers.  

The MTPConnect COVID-19 Impact Report identifies five key factors across the MTP value chain that will affect the growth of the sector over the next six to twelve months:

  1. Healthcare system burden
  2. Potential for increased unemployment
  3. Continued high shipping and supply chain disruptions
  4. Slowing of innovation pipeline
  5. Opportunity to strengthen Australia’s clinical trials reputation

MTPConnect Chair, Sue MacLeman, says while the lockdown impacts have been significant, the report also explores lessons learned from the sector’s experiences responding to COVID-19.

“As the number of global cases and deaths continued to rise, Australia’s MTP sector, which is on the frontline for research, translation, advanced manufacturing, prevention, diagnosis, management and treatment of infectious diseases, mobilised to meet the challenge,” Ms MacLeman says.

“In the Supplementary Report, developed with the Medical Technology Association of Australia, we detail how the medtech sector came together to work in a unique collaboration with government in support of the national interest.

“Industry input into Federal Government Taskforce working groups has been integral to securing essential supplies of ventilators, testing kits and personal protective equipment for our healthcare system. And from these experiences, there’s no doubt that industry is uniquely placed to inform and deliver sovereign manufacturing capabilities and robust supply chains as part of future pandemic planning.

“MTPConnect too will continue its critical work to support the MTP sector through the response and recovery, which has included the recent launch of a rapid round of our Biomedical Translation Bridge program, specifically designed to support COVID-19 research projects,” Ms MacLeman said.

The MTPConnect COVID-19 Impact Report covers the period from February to May 2020. A follow-up report will be published in Quarter 3 2020 to outline strategies and initiatives to position the MTP sector for future growth.

Report: The impact of COVID-19 on Australian MedTech, Pharma and Biotech Sectors


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