Australia’s clinical trial advantage gains ground amid U.S. uncertainty

Pricing pressures, combined with a volatile U.S. regulatory and government funding environment, have increasingly steered biotechs and pharma to pursue clinical studies in Australia, CROs told BioSpace.

Recent Australian government incentives to promote life sciences in states such as Queensland and Victoria have further underscored the country’s strong predictability profile, which appeals to international sponsors. Still, the impetus raises questions about whether Australia can evolve from a preferred trial destination into a broader biotech innovation hub.

“Our inquiries are up about 25% on last year, and U.S. sponsors account for the vast majority of that increase,” said Dr. Sud Agarwal, chief medical officer of iNGENū, a physician-owned and led CRO headquartered in Melbourne.

The main reason for these queries is financial savings, Agarwal said, as an early-phase trial in Australia costs much less than in the U.S. Three factors contribute to this:

• There is no IND requirement. This is only required if the trial moves back to the U.S.
• Ethics and regulatory approval typically take four to six weeks.
• A refundable R&D tax offset of up to 43.5% is available to eligible smaller companies. 

“For a venture-funded company, this means more data per dollar and a readout that arrives in time for the next financing round,” Agarwal said.

U.S biotechs are becoming more risk-conscious amid funding constraints and perceived unpredictability at the FDA and National Institutes of Health funding, said Ryan Klein, vice president, business development, US and APAC at the U.S.-based CRO Resolian. Resolian has five labs in four continents, including Australia.

Particularly for early phase sponsors with a minimal cash runway, risk is a paramount concern, said Jerome Barley, commercial director at Melbourne-based CRO Avion Medical. Barley noted the interest from U.S. companies has ticked up but not overwhelmingly so.

That said, “Australia does provide predictability or certainty on top of that speed and quality,” Barley said.

The regulatory expectations around data, safety and trial design are no different than other global regulators, Klein noted. Barley agreed, adding that while Australia removes the administrative burden and friction, it retains the scientific rigor, with filings accepted internationally.

Sponsors can often move from submission to first dosing in as little as eight to 10 weeks in Australia, Klein said. This is compared with an FDA review process that can take up to six months and, in some cases, prolong beyond eight months.

Even if U.S. regulatory and financial conditions improve, Australia’s competitive advantage will remain strong, Agarwal said. “As sponsors, investors and regulators become more familiar with Australia as a research destination, their confidence in the data and the process increases,” he said. “Familiarity leads to repeat use, and repeat use leads to more referrals.”

The R&D tax incentive has been a stalwart Australian competitive advantage for years, Barley said.

Under Australia’s federal Research and Development Tax Incentive, intended to encourage companies to conduct R&D in Australia, eligible companies can claim either a refundable or nonrefundable tax offset depending on their size and structure.

For prerevenue small biotech companies, the tax offset means they can recover a significant proportion of the R&D expenditure. This effectively lowers the net cost of conducting the clinical trial in Australia, Klein added.

In addition to national incentives, state governments–Victoria and Queensland in particular–have also created a warm environment to attract companies, Klein said.

Victoria has built a mature life sciences ecosystem with outstanding hospitals, KOL knowledge, universities and biotechs, Barley said, as well as developing globally scaled manufacturing capability.

Agarwal pointed out that Victoria hosts about 30% of national trial sites and in 2025, invested A$5 million in industry-sponsored trials.

The Queensland government has been investing heavily more in translational research, Barley noted. The Translational Research Institute is a significant Australian-first initiative in ‘bench to bedside’ medical research. In July, the government announced the expansion of advanced cell and gene therapy capability. Queensland has also committed A$11.2 million toward a new 40+ bed Phase 1 facility in Brisbane, Agarwal said.

Combined, these investments suggest Australia is pursuing a goal larger than becoming just a preferred location for early clinical trials. But is the country ready for a larger biotech and pharma presence?

Australia has focused recently on building its manufacturing capacities for Phase 2 and 3 studies for Good Manufacturing Practice (GMP) standards, Klein said. This is essential to compete on the global level.

Regardless, the remaining gaps include GMP capacity for cell therapy, mRNA and biologic, Agarwal said. In addition, there is missing data infrastructure for trial data across sites and a lack of workforce training for specialized roles.

Ultimately, Australia’s population of 28 million people limits recruitment for large or event-driven trials, Agarwal added. Sponsors are less likely to choose Australia for large Phase 3 and cardiovascular outcomes trials; rare diseases with very small patient pools, which need multicountry recruitment; and gene-modified products, because gene regulatory licensing adds time.

The next steps in Australia’s evolution as a life sciences market beyond attracting clinical trials should address several areas, Agarwal said. They include IP and company retention; bolstering manufacturing and analytical capabilities, including GMP, bioanalysis, radiopharmaceuticals and cell and gene therapy; and simplifying national governance.