The image shows two round, blue and white vaccine containers: the Nanopatch
We spend almost 90 cents of every dollar on R&D related activities. When we get the R&DTI tax credit, nearly 100% of this money is reinjected into the local economy, paying for highly skilled science and engineering graduates.

David Hoey, CEO, Vaxxas

Company Profile

Company: Vaxxas Pty Ltd

Sector: Biotechnology

Location: Brisbane

Profile: Vaxxas is a medical technology start-up located in Brisbane. Their vaccine delivery technology Nanopatch™ has the potential to disrupt the vaccine industry. The company has around 30 employees and is funded by venture capital.

Why R&D is needed

Vaccination has been one of the most significant public health interventions of the last 200 years. Vaccines help us fight infectious diseases by stimulating our immune system. They provide a safe and efficient way of preventing the spread of variety of diseases.

Vaccines are traditionally given using a syringe and needle. Vaxxas is developing technologies that make vaccines more effective and potent — as well as more comfortable.

One of these technologies is the Nanopatch™. Vaxxas started working on the Nanopatch™ about 6 years ago, following the University of Queensland’s ground-breaking work on influenza and human papilloma virus (HPV) vaccines.

The Nanopatch™ deposits vaccine directly amongst key immune cells located below the skin surface. The technology consists of an array of thousands of vaccine-coated micro-projections that penetrate the outer layers of the skin when applied with an applicator.2 Research shows this can provoke a much more potent immune response than traditional vaccine delivery technologies like needles and syringes.

Vaxxas CEO David Hoey says commercialising a technology like the Nanopatch™ is a long and complicated R&D process including the development of the technology suitable for use in clinical trials.

All of this requires substantial funding. Vaxxas has successfully raised more than $48 million in capital from private investors and organisations such as the World Health Organization (WHO) and the Bill & Melinda Gates Foundation. Vaxxas has also received support from the Research and Development Tax Incentive (R&DTI). 

How the Research and Development Tax Incentive helps

Mr Hoey explains Vaxxas has benefited from the R&DTI since his company started, and has played a crucial role in supporting the development of their new vaccination technology.

“The R&DTI is extraordinarily important for us. In the area of biotechnological development, you are really in for the long haul,” says Mr. Hoey.

“Reliable and consistent funding is essential for our research. It also helps us keep our business in Australia, rather than relocating overseas – because the costs are often higher here.”

Mr Hoey says that the money received through the R&DTI is being reinvested in the local economy in multiple ways.

‘Vaxxas spends almost 90% of every dollar on R&D related activities. We partner with sub-contractors in Australia, from finance and accounting firms to research facilities, analytical laboratories, data management companies and vendors of materials.’

For their next clinical trial starting in February 2018, the company will spend $3 million with Australian-based companies.

Mr Hoey summarises this knock-on effect of the R&DTI on the Australian economy:

The program is not only important to any business that is engaged in technology development, but it is important for Australia. There is an instant benefit that you get from recycling this money back into the economy. Most goes back into the wages for workers.’

The R&DTI helps companies across Australia build capabilities and intellectual property and employ highly skilled workers. Mr Hoey emphasises that the R&DTI also helps his business offer employment opportunities to engineering and science graduates.

In addition to contributing to the Australian economy, Vaxxas’s technology has the potential to completely disrupt the vaccine industry — a $30 billion market. The Nanopatch™ will not only enhance the immune response generated by a vaccine compared to traditional delivery methods, it may also generate an effective response with a fraction of a full vaccine dose as shown in preclinical studies.3 Unlike conventional vaccines, the Nanopatch™ does not need to be refrigerated, reducing costs as well as delivering environmental benefits. This also makes transportation easier, particularly for parts of the world with unreliable cold-chain infrastructure.

Another benefit is that the Nanopatch™ is a pain free alternative to syringes and needles. Using a patch also eliminates the risk of needle stick injuries.

Mr Hoey says the R&DTI has helped accelerate the development of the Nanopatch™. He believes the R&DTI ‘de-risks the work’ as the additional funding has allowed Vaxxas to realise trials in parallel, rather than consecutively.

“If the R&D tax incentive were to come to an end, it would be a tragedy because we built our business on the basis that it is there. Our plans, our hiring strategy and our commitments to facilities are all based on the continuation of the program.”

He also thinks it would negatively impact ‘other businesses in the ecosystem’ as he believes "the clinical trial business in Australia would dry up overnight". Mr Hoey says that Australian companies relying on the R&DTI need the predictability and consistency of the program for there to be a long-term strategic gain for the local economy. Otherwise, investors might consider the option of relocating businesses overseas in the future.

Doing R&D supported by the Tax Incentive has meant we can hire the best and brightest — the smartest scientists and engineers that accelerate our technology development program.

David Hoey, CEO, Vaxxas

R&DTI Impact Facts

  • almost 90% of all expenditure is invested R&D
  • supported and accelerated development of a novel vaccine delivery technology with the potential of far more potent immune responses
  • enabled Vaxxas to continue operation in Australia and to offer employment opportunities for highly skilled workers
  • created business opportunities along the supply chain for clinical trial centres, laboratories, data management companies and many more
  • the Vaxxas Nanopatch™ has the potential to completely disrupt a $30 billion industry