A Newcastle biotech company is set to lose more than $6 million a year in cuts to research and development tax incentives proposed by the Albanese government.
ImmVirX, which has a research and development arm in Newcastle, runs clinical trials of immunotherapy for patients with colorectal and ovarian cancer.
Darren Shafren, chief scientific officer of ImmVirX, said the tax changes would mean cuts to staff, research and clinical trials.
"The patients will be the ones that miss out. We'll have to limit the number of patients in studies," Professor Shafren said.
"Clinical trials are expensive to run. They cost hundreds of thousands of dollars per patient.
"The trouble with biotech is once you get the momentum and slow it down, you can't just start it up straight away even with a significant cash injection."
Under the changes, the Albanese government has proposed to restrict access to "refundable offsets" to companies in their first decade of operation.
Opponents say this isn't long enough because drug development can take longer than a decade.
ImmVirX, founded in 2019, received a $6.3 million research and development tax incentive refund from the Australian Taxation Office for 2024-25.
Professor Shafren has had a long career and pedigree in the biotech sector.
In 2018, he sold Viralytics to pharmaceutical company Merck and Co for $500 million.
ImmVirX has a similar approach to Viralytics. Under its oncolytic immunotherapy, it uses viruses to infect and kill cancer cells.
The company has a research and development lab at the Hunter Medical Research Institute, with support from the University of Newcastle Research Associates (TUNRA).
The company has the immunotherapy drug IVX037 in clinical trials, while another named IVX055 is set to begin early next year.
They have shown promising results in clinical and preclinical trials, respectively.
Professor Shafren said the tax changes would "hurt a lot of small biotech companies" in Australia.
"The tax incentive has always been an attractive thing. We felt supported by the government," he said.
The changes aren't due to take effect until 2028, but are expected to influence decisions being made now.
These include where clinical trials are done, where investment is provided and where companies establish long-term operations, including manufacturing.
AusBiotech, the industry body for the life sciences sector, has urged Treasurer Jim Chalmers to reconsider the changes.
It is concerned they could lead companies to move headquarters, clinical trials, jobs and manufacturing offshore.
AusBiotech chief executive Rebekah Cassidy said "Australia has a world-leading and growing biotech, health tech and medtech sector".
"This is now at risk due to these controversial proposed changes," Ms Cassidy said.
Ms Cassidy said ImmVirX was "a great example of Newcastle ingenuity".
"We simply cannot afford to jeopardise Australia's ability to retain companies like ImmVirX and others due to these ill-advised proposed changes," she said.
A spokesperson for the Treasurer said the government was "reforming our innovation system to better target high-quality research and development that aligns with our economic priorities".
A spokesperson for the federal Department of Industry, Science and Resources said the changes were to "simplify and focus" the tax incentives.
