Expanding and strategic shift
An Australian business has developed an innovative way to test for different types of cancers. This technology represents an eligible intellectual property product, and has been marketed and sold in Europe to pharmaceutical companies for the past 2 years. The applicant receives royalties based on the level of sales in a particular period, and has previously received 4 EMDG grants.
The business had spent $750,000 over the past 3 years on marketing in Europe:
- $250,000 in the 2018–19 financial year
- $250,000 in the 2019–20 financial year
- $250,000 in the 2020–21 financial year.
To diversify and expand the business operations, the applicant has developed a drug (eligible good) used in the treatment of Alzheimer’s disease. The applicant plans to market this product to pharmaceutical companies within Europe over the next 3 years. The new product is materially different from other products previously sold by the applicant, even though in the same health industry.
The business’s plan to market outlines how:
- they intend to spend $1 million over the next 3 years, aiming to increase their overall promotional activities by reaching more new customers; and
- their marketing activities will materially change, because marketing for the new Alzheimer’s drug will require hiring specialist consultants to promote the technical aspects of the new product.
The increase in spending over the next 3 years from the previous 3 years represents a planned expansion of promotional activities. The material change in marketing activities to promote the new product is a strategic shift. So the requirements for a Tier 3 grant have been met.