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7 May 2026, by Amy Sarcevic
Australia’s biotechnology industry is picking up after an $829 million injection of venture capital last year – but is the stack large enough to capitalise on the global biotech boom?
Sarah Meibusch who leads the Life Science practice at OneVentures believes Australia’s chances are strong – but cautions that the market is still “highly selective”.
“Those who have been watching the XBI or NASDAQ will know there has been good momentum in biotech. Still not a full recovery from its peak in 2021, but certainly solid year-on-year growth,” she said ahead of the Bio Connections Australia Conference.
“In contrast, the Australian listed healthcare market has been under real pressure because the ASX healthcare index is dominated by large caps like CSL, Cochlear and ResMed.”
Importantly, too, the IPO window in the US opened early this year, signalling strong investor appetite and, while selective, Sarah says it is nonetheless a positive market signal.
“It will be interesting to see where we are in the next few months, in terms of IPOs. But it’s fair to say capital is coming back into this sector, after what was essentially an arctic winter.”
Selective investment scene
Even with fresh flowing capital, however, Sarah claims that demand for biotech products is still “pent up” and that this has created a “strong quality filter”.
In a selective investment scene, she says innovators with global ambitions and strong clinical data are being favoured.
“Companies that are right in the clinical phase of their development are the ones receiving funding right now, as are those whose products address a really large global market.”
Two main pipelines
For VCs considering Australia, Sarah says there are two promising avenues.
The first is the scientific output from universities and research institutes, whose access to capital has grown fifteenfold in the last decade.
“It’s massively growing the pipeline of new companies, which is exciting for Australia,” she said.
The second comes from the deployment of clinical trials on Australian soil – an increasingly popular approach for biotechs, many of which now recognise the country’s superior capital efficiency.
“Australia is emerging as one of the most capital-efficient clinical development hubs globally for biotech companies seeking access to patient populations and trial environments that offer strong clinical, regulatory, and commercial comparability to the US – effectively enabling data that is directly relevant to the world’s largest healthcare market.
“Yes, you can do things cheaper in China, but you still need to replicate or bridge that data in jurisdictions where it is more readily applicable to US or European regulatory and commercial settings, where pricing and reimbursement dynamics are more favourable.
“On top of that, we have strong regulatory frameworks that enable faster timelines and materially lower costs to actually run those trials.”
Within both pipelines, Sarah says there is one standout investment opportunity: clinical-stage capital.
“This is where the gap is most acute. Companies need $10 to $50 million to run clinical programs, and that capital is still constrained. That is where the opportunity sits. And that’s, I think, where the opportunity is for VCs,” she said.
China
What seems like a threat could also signal a further major opportunity for Australian VCs, Sarah said.
In recent years, onlookers have grown fearful of China’s innovation sector, which Sarah said has demonstrated a “big structural shift”.
Indeed, in 2025 alone, the Chinese biotech outlicensing market hit 137 billion, and nearly half of all new drug molecules that are currently going into clinical trials now come from Chinese companies. China now also represents more global patents than any other country.
“China’s innovation is strong. And it’s not just a local market; it’s innovating for the globe. China is no longer a cost story. It is now a global innovation engine. It represents a fundamental shift in global biotech innovation,” she said.
While many fear China’s success will overshadow the Australian innovation scene, Sarah recognises the potential for lucrative partnerships.
“If we consider Australia’s strength in hosting clinical trials and providing access to patient populations that are clinically and regulatorily comparable to global markets, then I think there is a strong opportunity for Australia to partner with innovation from China. It could provide bridging or new clinical development and give that global credibility to link it to capital or markets elsewhere in the world.
“So, I don’t think we should be scared of China. We should engage with it instead.”
“The ecosystems that will win are those that connect global innovation, clinical execution, and capital. Australia already has two of those three.”
Further insight
Sharing further updates on the biotech investment scene, Sarah Meibusch will present at the upcoming Bio Connections Australia conference.
This year’s event will be held on 27 July at the Crown Promenade Melbourne.
Learn more and register your tickets here.
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