GUEST EDITORIAL

GAME ON! CANADA HAS STIFF

COMPETITION FOR LIFE SCIENCES INVESTMENTS

BY JASON FIELD

When it comes to the life sciences industry, COVID-19 has changed everything. Once seen as an industry of the future, jurisdictions around the world are now doubling their efforts to bolster their capacity in biopharmaceutical manufacturing, medical technologies, agri-food and other areas of the bio-economy as part of future pandemic preparedness and economic security measures. So how does Canada measure against this new global competition?

Let’s start with the basic ingredient: science. Canada has world-class academic and research institutions that make significant contributions to the global scientific community. For example, the University of Toronto is ranked among the top 20 universities globally, second in publications (only behind Harvard) and third in citations. Aquitas Therapeutics is a Canadian company that developed the lipid nanoparticle delivery system that allows mRNA vaccines, like those from Pfizer and Moderna, to be viable.

What’s amazing is that Canada produces such great science while lagging other global jurisdictions in terms of public investments in research. In 2019, Canada’s gross domestic spending on R&D as a percentage of GDP was a mere 1.592%, trailing the OECD average of 2.476%. This places Canada below Slovenia and the Czech Republic, and just ahead of Hungary. If we truly want to “own the podium” in science, we need to up our game in public investments in R&D.

Canada is rich in raw materials, whether it’s our natural resources (like minerals, oil and gas) or a national resource like our brain power. But it’s the commercialization (or refinement) of these raw materials into useful products that generates the greatest value and return on investment. And this is where Canada (and many other jurisdictions) really struggles. This is where a multi-faceted coordinated strategy is needed, one that includes initiatives to support access to scaling capital, agile and modern regulatory frameworks and timely reimbursement to facilitate rapid adoption of innovation.

Canada has many supports for start-ups through tax credits, funding programs and new venture capital initiatives. However, there remains a significant gap in terms of larger pools of capital to support scaling companies in life sciences. Aside from Quebec, most Canadian pension funds do not invest significantly in innovative Canadian life sciences companies. The public capital markets, such as the TSX, favour traditional natural resources sectors because of government tax incentives like flow-through shares, incentives which are not available to publicly traded life sciences firms. We need a wider and deeper pool of capital to support growing Canadian companies.

Even when products are commercially viable, there are often huge regulatory and reimbursement hurdles to overcome. Health Canada demonstrated amazing agility in responding to COVID-19. Governments and the entire sector must find a way to demonstrate similar agility and responsiveness post-pandemic with other health challenges, like rare diseases. Procurement culture must shift from a “lowest cost” mentality to one of investing in our health and economic prosperity. Antiquated institutions like the federal price regulators that fail to be agile, fail to add value, and continue to create unnecessary barriers must be re-thought and reformed in this new competitive landscape.

If done right, this coordinated approach will help encourage Canadian life sciences start-ups to grow and go global, building on key Canadian assets. It’s a virtuous circle, too: developing, launching and exporting more life sciences intellectual property and products will make Canada more competitive in attracting global investments. Canada has a once-ina-century window of opportunity in which we can create a competitive environment for our science to flourish and invite other players from around the world to join us. Game on, Canada!

Jason Field is president and CEO of Life Sciences Ontario. The organization fosters commercial success for Ontario’s life sciences sector through advocacy and education, and promotes the industry locally, nationally, and internationally.