Preclinical research is the part of a drug or biologic program closest to the textbook idea of an experiment, and much of it qualifies. What it does not get is a shortcut. The Clinical Trials Determination names pre-clinical trial activities as one of its exclusions, so a discovery program cannot point to a phase or a TGA notification. Each study has to be argued on the core test in s 355-25(1).
Sorting a preclinical program
Eligibility is self-assessed per activity, so it helps to sort the work by what each study is trying to find out.
- Hypothesis-led pharmacology. Efficacy in a disease model, mechanism studies and dose response, where the result could not be predicted from published work. Usually core.
- Lead optimisation cycles. Design, synthesis and testing of analogues where each round's result sets the next design. Usually core while structure and activity remain unpredictable.
- ADME and pharmacokinetics. Core when the behaviour of a new chemical class is genuinely unknown, routine when a standard panel confirms an expected profile.
- IND-enabling safety package. Being required by regulators does not exclude a study: AusIndustry says work is not caught by the compliance exclusion just because it is regulated. A standard battery that confirms an expected outcome is routine testing, though: not core, and supporting only where it serves a named core activity.
- Building cell lines, sourcing animals, assay set-up. Supporting work, directly related to the experiments it enables.
- Target scouting before any experiment. AusIndustry's biotechnology guide says background research, comparing technologies and analysing existing datasets to choose candidates are usually neither core nor supporting, because no planned experiment uses the result yet.
Routine testing and analysis, and work done to comply with a legal requirement, are listed in the exclusions in s 355-25(2)(f). When they are claimed as supporting work, being directly related to a core activity is not enough on its own: the dominant purpose test applies, so the study must exist mainly to serve a named core activity, such as the first trial, rather than the regulatory file in general.
The hypothesis has to come first
Tribunals have rejected claims where the hypothesis was written after the work. In Royal Wins [2020] AATA 4320, the absence of contemporaneous records of a hypothesis was fatal, however much work had been done. For a preclinical study the study plan is the natural record: state the variable, the endpoint, the threshold and what result would disprove the idea, and date it before dosing. Negative results count. A failed study is good evidence of uncertainty when failure was one of the answers the design could give; a run that failed because of a technique error, a dosing mistake or a known liability of the compound shows nothing about the knowledge gap. See systematic progression.
Overseas CROs and who owns the work
Many animal programs use contract research organisations abroad. Overseas work is not claimable without an overseas finding, applied for before the end of the income year in which the overseas study is conducted. For preclinical studies the allowed reason is usually that a facility, expertise or equipment is not available in Australia, supported by evidence of reasonable efforts to find it here. Cost alone is not a reason, and the overseas spend must stay below the related Australian activities.
The work must also be conducted for your company: you direct it, fund it at your own risk and own the data. Licensing deals that give a partner the results deserve a review before the year ends.
Preclinical findings lead into clinical trials, where the Determination does apply. Assay and biomarker development has its own boundary on diagnostics and IVD development. Sector context is on the biotech page.