Point of View: James Hutton on innovative health partnerships

9 minutes + video  01.01.2024

James explores the importance of collaboration, legal adaptability, technological integration, and diverse funding sources in advancing healthcare innovation through innovative partnerships and integrated precincts.

Innovative health partnerships

James Hutton leads MinterEllison's Life Sciences Practice and is one of Australia's leading venture capital lawyers for life sciences.

His expertise extends to medical research and commercialisation, pharmaceuticals, medical devices, biosciences, health and aged care industries. He is a strong supporter of innovation in the Australian and global life sciences industries, providing structuring, regulatory, fundraising, governance and due diligence and transactions advice to a range of organisations, including MedTech / health tech start-ups and medical research institutes as well as established Australian and offshore private organisations and ASX and NASDAQ listed companies.


What are innovative partnerships and integrated precincts?

They bring together the right resources and people in a co-located place. It may be a virtual collaboration, or it might be a bricks-and-mortar collaboration. These are dynamic, innovative partnerships where several organisations, such as private enterprises, government, medical research institutes and biotech companies, come together and pool their resources and knowledge, all for a common goal. They create a setting for some fantastic discoveries - whether it be drug development, devices or software, including design through to manufacture, all in aid of creating a better healthcare environment.

If you can bring all those different elements together, whether it be the money, the science, the technology, or the ideas, that is what successful or innovative partnerships are about.

Bringing the right skills and resources at the right scale is at the heart of it.

How are innovative partnerships beneficial?

By collaborating, everyone brings their best to the table to develop and hopefully create a new healthcare outcome that individuals, organisations, governments or businesses couldn't do on their own.

It's about creating a self-fulfilling prophecy. You will do more when you collaborate. It's not about protecting one's IP - that can still be done. It's about sharing, where possible, all the ideas, resources and the IP to get a better outcome. We've seen that in the US, Europe, and increasingly in Asia. Sharing is the winning recipe for success. It is beneficial to the common objective of the partnership, which is usually a commercialisation or at least a discovery beneficial to the broader healthcare community.

Are there legal structures that are unique to this model?

Like any good partnership, communication is vital in setting up appropriate governance arrangements, meeting everybody's needs, and having the end in mind. The other key element is flexibility. Like any partnership, things evolve, so ensuring that your partnerships can cater for future events and changes of objectives are important things we're talking to clients about.

Also, there is a degree of legal innovation to address complexity when it comes to partnerships such as these. Not so much in the formal structures, but how you bring in multiple and diverse parties. Often, with these partnerships, it's more than two or three participants; it can mean anything up to 12 or 15 participants. And as soon as you reach that volume of stakeholders with differing backgrounds and different considerations, you add and need to then manage that complexity.

The legal aspect can include everything from a governance arrangements, , protecting IP, through to working out structures for sharing the commercialisation windfalls that hopefully come from successful collaborations.

What role does technology play?

Technology plays out on multiple levels, including the ability to democratise some of the health solutions, through the use of AI as an open-source technology to help in health discoveries.

Technology companies are investing billions of dollars into creating not only health apps or digital solutions, but they are creating healthcare divisions in aid of developing and commercialising end-to-end healthcare solutions, because they can see what we can all see and what we've been talking about for decades, the next steps in the evolution of healthcare - right down to the ability of AI now to speed up drug development, through to much more tangible things like care for the aging population, which is I think the biggest focus that I can see it coming in the next five to 10 years.

This trend fits with what I see as the global megatrends for healthcare and life sciences: genomics, stem cells, and personalised medicine, which is underpinned by digital health and the bricks-and-mortar sense, for example the ability to deliver healthcare into the home including telehealth to.

There will be underpinning technologies that will make it quicker to develop successful new therapies, through to a whole range of things that we haven't even thought about. That's why you're seeing some of these tech giants, whether Apple, Google, Microsoft or the Amazons of the world, also working in this space. There is a lot they can bring to the table, and we're increasingly seeing them not just operate on their own but participating in these partnerships.

What are the funding limitations from a government and private perspective?

The Commonwealth health budget in 2022 was $75 billion. In 2026, it is forecast to hit $140 billion. And that's underpinned by just the necessities of the increasing population, the aging population, and a desire to research, commercialise, and adopt as many new health technologies as possible that serve the community's best interests.

The private sector as well as our public research institutions will also always be key to underpinning research and commercialisation, and increasingly, we hear from medical research institutes that they have finite budgets and there is enormous pressure, but also incentive, to look to public-private partnerships. It is a real and ongoing challenge.

Does philanthropic funding contribute to the private funding mix?

Pleasingly, I think we're close to a tipping point here in Australia. 

Commentators will say that compared to the US and Europe, Australia is regarded as behind on the involvement of philanthropy and family offices. However, there have been some big and exciting examples of philanthropic funding recently. The Walter and Eliza Hall Institute recently signed an agreement to receive a 100 million dollars over 10 years from the Snow Family to pursue immunology-related diseases. Coming out of COVID, we also had the University of Melbourne establish the $250 million Cummins Pandemic Therapeutics Response Centre. There are a number of examples of philanthropic funding in Australia emerging in this sector now.

Are regulators keeping up with the changes in health?

More sophisticated technology is coming into play, even beyond AI. The regulators have a tough job.

It's a key issue that we're discussing with our clients. There is undoubtedly a growing groundswell of talk around how we get regulators worldwide, not just within the country, to have a commonality of approaches to address these challenges.

The common feedback we have from both the research institutes, universities, and private sector clients is that while we have a transparent, robust and well-regarded regulatory system here in Australia, the challenges that our systems face (and this is not unique to Australia) mean that we should be looking wherever we can for commonality of regulation, making it easier, but not for the sake of safety and quality, including creating a system that expedites, for example, clinical trials.

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