Biotechnology Focus October/November 2016 by Promotive Communications

INSIGHTS FOR THE LIFE SCIENCE INDUSTRY

october/november 2016 VOLUME 19, NUMBER 5

Mergers & Acquisitions

It takes more than just finding the right partner

INSIDE:

When it comes to stem cells, Canada needs to THINK BIG!

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contents

FEATURES

OCTOBER/NOVEMBER 2016 – VOLUME 19 – NUMBER 5

THE CANADIAN FOOD LANDSCAPE: Major changes on the regulatory horizon (By Krista Coventry)

REGENERATIVE MEDICINE CASE STUDY How a Canadian company is building a regenerative medicine industry in Canada by developing ties in the Asia-Pacific region (By Emily Easto and Stacey Johnson)

THINK BIG!

REGULATING INDUSTRY THROUGH COMPLIANCE WITH ADVERTISING REGULATIONS

13 13

As stem cells emerge as treatments for a variety of incurable diseases, Canada needs a co-ordinated strategy to score economic goals (By Joe Sornberger)

How the Child Health Protection Act may bring an end to the practice of offering gifts in exchange for a purchase (By Christelle Gedeon)

SPECIAL REPORT: MERGERS & ACQUISITIONS: Three former Canadian biotech company founders weigh in on how their deals went down, while providing some sound advice to achieve a smooth exit (Compiled by Shawn Lawrence)

IN EVERY ISSUE

DEPARTMENTS

RESEARCH NEWS

BUSINESS CORNER

ACROSS CANADA The Future of Agricultural Biologics (By Doré Collett)

THE LAST WORD The big data conundrum, better methods for finding a needle in a haystack (By John Kelly)

www.biotechnologyfocus.ca

October/November 2016 BIOTECHNOLOGY FOCUS 3

PUBLISHER’S note

PUBLISHER/ EDITOR-IN-CHIEF SENIOR WRITER CONTRIBUTING WRITERS

Terri Pavelic Shawn Lawrence Christelle Gedeon

Doré Collett Emily Easto Joe Sornberger John Kelly

Canada’s stem cell and regenerative medicine Community gather in Whistler, BC Canada’s premier stem cell research event, the Till & McCulloch Meetings, took place from October 24-26 at the Whistler Conference Centre in Whistler, BC. Named after Drs. James Till and Ernest McCulloch, who discovered stem cells in 1961, the annual conference brings hundreds of participants from across Canada and all over the world together, to discuss the current state of stem cell science and its promise for the future. Now in its fifth year, this year’s edition attracted more than 420 delegates, and was highlighted by the popular Till & McCulloch Award Lecture given by the University of Toronto’s Dr. Molly Shoichet. The event was co-hosted by CCRM, the Stem Cell Network and the Ontario Institute for Regenerative Medicine (OIRM). Organizers said they were quite pleased with the attendance considering that the majority of Canada’s stem cell scientific community is based in central Canada. For reference sake, last year’s meeting held in the epicenter of Canada’s stem cell research community, Toronto, had 475 attendees. Dr. Michael May, president and CEO of CCRM, calls it a must attend event for those in the industry because it promotes the exchange of ideas and research among Canada’s leading stem cell scientists, clinicians, bioengineers and ethicists, as well as representatives from industry, government, health and NGO sectors. “Canada’s strength in regenerative medicine keeps growing as more government funding gets allocated to supporting the best minds and organizations we have,” he said. “It’s always valuable to attend TMM and hear from researchers and graduate students about their important work.” In addition to hearing from various researchers and scientists from Canada, the U.S, and Japan, attendees got to meet Canadian Tina Ceroni, who shared her extraordinary experience of being the second patient in the world to have a stem cell transplant -- in this case at Ottawa Hospital -- for her life-threatening and rare disease: stiff-person syndrome (SPS). The meetings also included a whole host of industry workshops, mentoring lunches and award ceremonies. Coinciding with this exciting event, we’ve got two stem cell themed editorial features in this issue, including Joe Sornberger’s piece on the emergence of stem cell therapies as a treatment option for a variety of diseases. While admittedly the science isn’t there yet, he shows it won’t be long before we reach that tipping point. Moreover, Canada could, and should be at the forefront of capitalizing on its expertise in this area. Sornberger’s piece also highlights several individual cases where stem cell treatments are giving hope to patients who previously had none. We also have for you a co-written case study by Emily Easto and Stacey Johnson, both of CCRM on how an emerging Canadian company is building a regenerative medicine industry in Canada by developing ties in the Asia-Pacific region. We have this and more packed into this issue! What are you waiting for, turn the page!

4 BIOTECHNOLOGY FOCUS October/November 2016

Krista Coventry Stacey Johnson GRAPHIC DESIGNER CONTROLLER MARKETING MANAGER

Elena Pankova John R. Jones Mary Malofy

CIRCULATION DIRECTOR Mary Labao circulation@promotivemedia.ca Tel: 905-841-7389

EDITORIAL ADVISORY BOARD Christine Beyaert, Roche Canada; Pierre Bourassa, IRAP, Montréal; Murray McLaughlin, Sustainable Chemistry Alliance; Ulli Krull, UTM; John Kelly, KeliRo Company Inc.; Peter Pekos, Dalton Pharma Services; Brad Thompson, Robert Foldes, Viteava Pharmaceuticals Inc.; Gail Garland, OBIO; Barry Gee, CDRD; Bonnie Kuehl, Scientific Insights Consulting Group Inc.; Raphael Hofstein, MaRS Innovation; Roberto Bellini, Bellus Health; Peter van der Velden, Lumira Capital; Albert Friesen, Medicure Inc.; Ali Tehrani, Zymeworks Inc.

B C

Biotechnology Focus is published 6 times per year by Promotive Communications Inc. 23-4 Vata Court, Aurora, Ontario L4G 4B6 Phone 905-727-3875 Fax 905-727-4428 www.biotechnologyfocus.ca E-mail: biotechnology_focus@promotive.net Subscription rate in Canada $35/year; USA $60/year; other countries $100/year. All rights reserved. No part of this publication may be reproduced without written consent. Publications Mail Registration Number: 40052410 Return undeliverable Canadian addresses to: circulation department – 23-4 Vata Court, Aurora, Ontario L4G 4B6 National Library of Canada ISSN 1486-3138 All opinions expressed herein are those of the contributors and do not necessarily reflect the views of the publisher or any person or organization associated with the magazine.

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R&D news Canadian neuroscience leaders tap IBM Watson to pinpoint new drugs for Parkinson’s disease

TORONTO, ON – The Ontario Brain Institute (OBI) and the Movement Disorders Clinic (MDC) at Toronto’s University Health Network (UHN) have embarked on Canada’s first ever Parkinson’s disease research project using the recently launched IBM Watson for Drug Discovery. The system, delivered through the cloud, analyzes high volumes of data, understands

complex questions posed in natural language, and proposes evidence-based answers. What makes Watson unique is that it continuously learns, gaining in value and knowledge over time, from previous interactions. Drawing from its body of nearly 31 million sources of relevant literature, IBM’s cloud-based cognitive enterprise solution analyzes scientific knowledge and data us-

ing machine learning and natural language processing. MDC researchers, along with members of the Informatics and Analytics team at OBI, will use Watson to accelerate the drug discovery process and determine which drugs could potentially be re-purposed in the fight against Parkinson’s disease. “Drug researchers are challenged by the sheer volume and pace of emerging data,” said Lauren O’Donnell, vice president, IBM Watson Health Life Sciences. “Watson for Drug Discovery empowers researchers with cognitive tools that will help to speed drug discovery, and increase the likelihood of bringing effective therapies to patients more rapidly.” “This partnership signals the beginning of a new era for neuroscience where researchers can work with data at an unprecedented level of sophistication and speed,” said Tom Mikkelsen, president and scientific director of the Ontario Brain Institute. “We are excited by the impact this could have on people living with Parkinson’s disease.” To see this story online visit http://biotechnologyfocus.ca/canadianneuroscience-leaders-tap-ibm-watsonpinpoint-new-drugs-parkinsons-disease/

Top-line results are in from Clementia’s Phase 2 trial of Palovarotene MONTRéAL, QC – Clementia Pharmaceuticals has released top-line results from its Phase 2 clinical trial investigating palovarotene, a retinoic acid receptor gamma agonist (RAR?), for the treatment of fibrodysplasia ossificans progressiva (FOP). FOP is an extremely rare but serious disease in which an accumulation of heterotopic ossification (HO, extraskeletal bone) in muscle and soft tissue progressively restricts movement by locking joints leading to loss of function, physical disability and even risk of early death. Several positive trends were detected in the 40-subject placebo-controlled trial, including palovarotene-related reductions in the proportion of subjects who developed new HO, reductions in volume of new HO, reductions in patient-reported pain associated with flare-ups, and reductions in the time to resolution of FOP-related flare-ups though none reached statistical significance. Additionally, Palovarotene was well-tolerated, with all subjects completing the 12-week 6 BIOTECHNOLOGY FOCUS October/November 2016

trial and enrolling into the open-label extension trial. “The results of this landmark clinical trial are encouraging and closely mirror what was observed in previously reported animal studies with palovarotene,” said principal investigator, Dr. Frederick Kaplan, the Isaac & Rose Nassau professor of Orthopaedic Molecular Medicine and chief of the Division of Molecular Orthopaedic Medicine in the Perelman School of Medicine at the University of Pennsylvania. “This study has considerably enhanced our knowledge of FOP and is a significant step forward for the entire FOP community.” The full results of the trial are expected to be published next year. In the meantime, Clementia says it will continue to gather important additional data in the Phase 2 extension trial and in the ongoing observational Natural History Study. Data from these studies will inform the design of a Phase 3 registration trial, which is expected to start in 2017.

To see this story online visit http://biotechnologyfocus.ca/top-lineresults-clementias-phase-2-trialpalovarotene/

BUSINESS corner Quark Venture launches new US$500 million health sciences venture fund VANCOUVER, BC – Vancouver-based venture capital firm Quark Venture has launched a new US$500-million ($656 million) biotechnology fund with China’s GF Securities. The fund, which stakeholders call the largest of its kind in Canada, will invest globally in a diversified portfolio of biotechnology and health sciences companies. Investments have already started with the first close of US$100 million, and recently, Quark Venture announced a US$30 million investment in Vancouver-based MSI (Methylation Sciences Inc.), a clinical-stage pharmaceutical company, that is advancing a therapy for adjunctive treatment of Major Depressive Disorder. “This partnership will capitalize on Quark Venture’s strong, experienced, globally connected team with its track-record in technology sourcing, screening and commercialization, as well as on GF Securities’ integrated strengths in investment, capital solutions, biotechnology IPO listing and expertise in China’s biomedical industry,” said Zhi Hai Lin, CEO of GF Securities.

“Our goal is to build a diversified portfolio by investing in the best in the world biotechnology and health sciences companies that are driving game changing innovations in drug development, medical devices, health IT and emerging convergent technologies,” adds Karimah Es Sabar, a global life sciences leader and the recently appointed CEO at Quark Venture. Es Sabar adds that the decision to make Vancouver the headquarters for Quark Venture and the Global Health Sciences Venture Fund, further validates Canadian innovation. “We anticipate that internationally competitive Canadian companies will do well having a fund of this size and calibre at their doorstep, and we believe such a fund will energize the sector and be a magnet for further capital,” she said.

changes will allow it to retain a competitive edge and remain an industry leader. “I am confident that we have the right team and the right plan to sustain our long term growth and success,”said Dr. Goodman Founded in 1983, Pharmascience has experienced constant growth since it was established more than 30 years ago, and has continuously innovated over the years to ex-

pand its business and solidify its presence in Canada’s pharmaceutical industry and globally. This is the first major layoff in the company’s history.

To see this story online visit http://biotechnologyfocus.ca/quarkventure-launches-new-us500-millionhealth-sciences-venture-fund/

Pharmascience Inc. forced into restructuring mode, cuts 90 jobs MONTRéAL, QC – Citing pressures related to pricing, regulatory and market instability, Pharmascience Inc. says it is going into restructuring mode and cutting about 90 positions at its Montréal head office. “This has been a difficult decision for us,” said Dr. David Goodman, CEO of the company. “We have always been deeply committed to our employees and are extremely grateful for their hard work and dedication over the years. We could not have built this company without them.” A generic drugmaker, the company currently ranks as one of the largest pharmaceutical employer’s in Quebec with over 1,500 employees. It makes more than 2,000 generic, over-the-counter and other prescriptions drugs, including 45 million that are filled annually in Canada. A number of external factors, such as pricing and regulatory pressures have recently led to increased market instability; mainly in Quebec, the rest of Canada and globally. In the interim, the company hopes these

To see this story online visit http://biotechnologyfocus.ca/ pharmascience-inc-forced-restructuringmode-cuts-90-positions/ October/November 2016 BIOTECHNOLOGY FOCUS 7

Regulatory News

| By Krista Coventry, M.Sc.

The Canadian Food Major Changes Landscape on the Regulatory Horizon Canada has gained global recognition for having a top-notch food regulatory system. However, a string of recent international high-profile food recalls, paired with increased global rates of dietary-related chronic disease, has collectively prompted the Canadian government to evaluate its existing food regulatory system.

oupled with these issues are longstanding industry complaints that the rigidity of the existing Canadian Food Regulations make product innovation a challenge. In an effort to update existing regulations, the Canadian government has engaged in multiple regulatory modernization efforts in the food sector. There are several primary goals of these regulatory initiatives: • To expand the overall safety of the Canadian food supply; • To improve operational efficiencies (i.e. better use of government resources); • To increase transparency in regulatory processes; • To modernize portions of existing regulations to allow for continued development of innovative health products. Two branches of the government currently regulate the Canadian food industry: the Canadian Food Inspection Agency (CFIA), and Health Canada’s Food Directorate. Both parties are currently undergoing broad regulatory modernization initiatives, which will bring about significant changes to all aspects of Canada’s existing food safety and labelling legislation.

cfia’s Food Regulatory Modernization Initiatives The CFIA bears responsibility for safeguarding all products in the Canadian food supply. The Agency is in the process of implementing new food safety legislation (The Safe Food for Canadians Act and Regulations) as well as modernizing non-safety related aspects of food labelling. CFIA recently communicated the goals of these modernization efforts to the Canadian food industry. Using a risk-based approach, the Agency is striving to achieve consistency in program delivery; food inspection processes; and other CFIA services. Looking forward to 2017, CFIA will provide additional resources (i.e. online tools, technology and training) to help industry navigate the multitude of changes in the regulations governing food safety and labelling. Two of these digital tools are “Ask CFIA” (a new digital service), and “My CFIA” (an online service portal), which are scheduled for release by year-end, 2016. 8 BIOTECHNOLOGY FOCUS October/November 2016

Regulatory News Food Safety Modernization The Safe Food for Canadians Act and Proposed Regulations Canadian food safety modernization has been underway for the past several years, and saw its first major milestone achieved with the passing of the Safe Food for Canadians Act (SFCA) in 2012. Having received Royal Assent, the SFCA: • Applies to all foods imported into and exported out of Canada, as well as foods prepared for distribution between provinces and territories; • Consolidates 4 food-related statutes (The Canada Agricultural Products Act; The Fish Inspection Act; The Meat Inspection Act; and food-related provisions of the Consumer Packaging and Labelling Act) and 10 food provisions into a single set of food inspection regulations; • Aims to improve Canada’s food safety system in three key ways: by streamlining food legislative authorities; by improving oversight of food safety; and by increasing domestic and export market opportunities for Canadian businesses. Approval of final regulations supporting the SFCA is a requirement to implement the Act into law. In the spring of 2015, a draft version of proposed Safe Food for Canadians Regulations (SFCR) was released for industry consultation, in two stages: • The first stage of the 2015 industry consultation considered the major impact that the SFCA would have on small- to medium-sized enterprises (SMEs) in the Canadian food sector. Several possible strategies to minimize the future regulatory burden for SMEs were suggested, as was a potential exemption threshold from requirements of the SFCR. • The second stage of the 2015 industry consultation was focused on the content of the proposed Regulations. Three important components of the Regulations have been created help to improve food traceability and recall processes in Canada:

1. Licensing Requirements. All companies importing a food(s) across a provincial or national border; or manufacturing, processing, treating, preserving, grading, packaging, or labelling food for export or trade across provinces; must apply for a food license, which carries a $250 application fee (good for 2 years). 2. Traceability of imported foods. Retailers importing a food across a provincial or national border will be required to keep records of these sales for a 2-year period. This requirement will help to improve traceability of food products throughout the supply chain (i.e. to help trace their movement) in the event of a recall process. 3. Preventive control plan for food suppliers. A preventive control plan is a written plan outlining the measures and actions taken to ensure that a food is safe to consume; and that the food meets all Canadian labelling and safety requirements. A preventive control plan will provide detailed documentation regarding potential hazards associated with the production of the food, as well as necessary safety measures to prevent these hazards. In an effort to help members of industry come into compliance with the proposed Regulations, CFIA has created various online resources (i.e. fact sheets) to assist industry with the pending requirements for licensing, traceability, and preventive control plans. These resources are available on the CFIA website. CFIA anticipates that the SFCR will be published in Canada Gazette I (CGI) in late 2016 or early 2017. Once published in CGI, a formal industry consultation period will be launched prior to publication of the final Regulations in Canada Gazette II (CGII). Food companies should seek out regulatory resources in advance of the forthcoming changes, and initiate internal processes to work towards attaining compliance with the future requirements for food safety in the Canadian marketplace.

Modernization of Canadian Food Labelling In 2015, the CFIA and Health Canada’s Food Directorate launched simultaneous yet independent nutrition labelling modernization efforts. Once approved, these proposed changes will represent the first

formal amendment to the existing Food and Drug Regulations issued in over 50 years. CFIA and Health Canada’s labelling modernization efforts are focused on non-safety related aspects, and safety-related aspects, of food labels, respectively. When taking both modernization initiatives into consideration, every single food label in Canada will be required to change over the next few years. The independent aspects of the respective modernization platforms are discussed below.

Health Canada’s Nutrition Labeling Regulations The proposed Regulations Amending the Food and Drug Regulations: Nutrition Labelling, Other Provisions, and Food Colours [Nutrition Labelling Regulations] was published in Canada Gazette I in June of 2015. Various changes were proposed in these Regulations, with the overall goal of providing the consumer with the ability to make more informed choices about the nutritional content of their foods. The following key changes have been proposed: • Format changes to ingredient listings: grouping common ingredients together, and making the ingredient panel more readily visible to the consumer. • Changes to reference amounts and standardization of serving sizes in the Nutrition Facts Table (NFT). • Various changes in requirements for % Daily Values (%DVs) in the NFT to better identify components of health concern (i.e. sugar), as well as beneficial components (i.e. fibre, carbohydrates). • Various changes to required declarations of vitamins and minerals within the NFT. • Emphasis on %DV of the NFT: “5% is a little, 15% is a lot”. • Changes to food colour listings and certifications for synthetic colours, which will better align Canada’s labelling standards, internationally. • Approval of a new health claim for fruits and vegetables and reduced risk of cardiovascular disease.

CFIA’s Food Labelling Initiative In June of 2015, CFIA released its proposed food labelling modernization initiative for industry consultation. This consultation identified proposed changes to various non-safety related aspects of food labels, including: • Standardization of the format of “best

Approval of a new health claim for fruits and vegetables and reduced risk of cardiovascular disease. October/November 2016 BIOTECHNOLOGY FOCUS 9

Regulatory News In June of 2015, CFIA released its proposed food labelling modernization initiative for industry consultation.

sumption data (i.e. sales data), as well as safety data, and to submit this data to Health Canada for review to maintain the TMA. By means of this process, Health Canada can evaluate the intake of foods fortified with vitamins, minerals, and other ingredients in the context of the overall diet, as it pertains to health. Health Canada is also investigating the potential for a product identifier for supplemented foods. This may take the form of an approval number, a symbol, or text stating “supplemented food”. The goal of this product identifier is to differentiate fortified foods from traditional foods at the retail level.

Closing Remarks before” dates, to allow for consistent and visible placement. • Expanding and revising ingredient class names to provide additional details about ingredients being added to foods. This will better align Canadian food labels internationally, and with CODEX. • Changes to % ingredient declarations, to highlight the % ingredient content of ingredients when advertised (i.e. blueberry muffins containing 10% blueberries). • Updates to legibility requirements (i.e. improved rules for contrast, prominence, etc.). • Updates to dealer name & address requirements to include digital contact information (i.e. email). • Update to existing food standards to allow for incorporation by reference.

GMOs – the Elephant in the Room Of interest, neither CFIA nor Health Canada’s food labelling modernization initiatives have addressed the potential for labelling of foods containing Genetically Modified Organisms (GMOs). Mandatory labelling of GMOs is a highly contested issue in the Canadian food industry, and has been largely ignored at this stage of labelling modernization. Industry trade organizations, such as the Canadian Health Food Organization (CHFA) are lobbying for mandatory GMO labelling in order to allow Canadian consumers to make more informed food choices.

New Guidance for Fortified Foods The food industry has often sought out ways to provide foods with added health benefits to Canadians. The process of food fortification allows for the addition of certain ingredients (i.e. vitamins, minerals) to improve the nutritional composition of foods. Food fortification has presented a major challenge for the food industry in Canada, as these foods are non10 BIOTECHNOLOGY FOCUS October/November 2016

compliant with the Canadian Food Regulations and require a regulatory amendment to be sold in the Canadian marketplace. The Regulations outline processes by which food companies can gain Temporary Marketing Authorization or Interim Marketing Authorization for foods. Despite these processes, recent regulatory changes in permissibility for food fortification have resulted in major confusion for this product category. In 2015, Health Canada’s Food Directorate issued draft guidance on food fortification for a new category of health products called “Supplemented Foods”. This guidance was formalized in February of 2016 with the release Category Specific Guidance for Temporary Marketing Authorization: Supplemented Foods. This formal guidance outlined: • The types of ingredients that can be added to foods (i.e. vitamins, minerals, amino acids, herbals, or bioactive ingredients); • The types of products that can be fortified (i.e. beverages, beverage mixes and concentrates, powders, bars, and certain types of confectionary products). In the category-specific guidance, Health Canada established maximum fortification levels for vitamins and minerals, to ensure safe consumption of supplemented foods within the context of the overall diet. A two-tiered approach (i.e. Tier 1 and Tier 2 products) has been defined to help consumers determine the risk profile of supplemented foods (i.e. potential for adverse health effects). Higher risk (Tier 2) supplemented foods will be subject to additional labelling requirements, such as cautionary statements, and/or direction of use statements. Supplemented foods require pre-market review and issuance of a Temporary Marketing Authorization (TMA) by Health Canada prior. Receiving a TMA renders a supplemented food temporarily eligible for sale, despite being noncompliant with the Canadian Food Regulations. Food companies are required to gather con-

The Canadian food industry is experiencing an unprecedented period of regulatory modernization with respect to food safety and food labelling, governed concurrently, yet independently, by the CFIA and Health Canada (respectively). The Safe Food for Canadians Act and proposed Safe Food for Canadians Regulations aim to improve the overall safety of the Canadian food supply chain by implementing licensing and traceability procedures to improve the overall efficiency of the food supply chain. CFIA’s food labelling modernization aims to provide clarity in non-safety related aspects of food labelling. Health Canada’s proposed Nutrition Labelling Regulations aim to help consumers better identify and understand the nutritional content of their foods. New guidance for supplemented foods promises to offer a new pathway for innovation in food fortification in the Canadian marketplace. Overall, changes to food safety and labelling Regulations will impact all aspects of the Canadian food supply chain, and will result in changes to every nutrition label in Canada. The end goal of these regulatory modernization initiatives is to enhance the food safety system in Canada, and to enable consumers to have the maximum potential to understand the nutritional content of the foods they purchase and consume. Having better access to safe and healthy food will ultimately improve the well-being of all Canadians, allowing Canadians to yield the reward for robust regulatory modernization initiatives. Krista Coventry is the Director of Regulatory Services at Source Nutraceutical Inc., a Canadian contract research organization specializing in food and health product regulations. Visit www.sourcenutra.com for more information. To see this story online visit www.biotechnologyfocus.ca/the-canadianfood-landscape-major-changes-on-the-regulatory-horizon/

| By Emily Easto and Stacey Johnson, CCRM

Regenerative Medicine & Stem Cells

Case study CCRM:

How a Canadian company is building a regenerative medicine industry in Canada by developing ties in the Asia-Pacific region

Michael May, president and CEO of CCRM in Japan signing MOU with Yuzo Toda, Chairman of FIRM, as Min. Chrystia Freeland watches. May 2016.

omentum has been building within the regenerative medicine industry with cell therapies and other technologies moving closer to commercialization every day. With regulatory changes hastening progress in Japan and research advances happening elsewhere in the Asia-Pacific region, one Canadian company is looking overseas for opportunities to create jobs and companies here at home, while always being mindful of the patient. Accelerating cell therapy and regenerative medicine commercialization drives CCRM, a federally funded Centre of Excellence for Commercialization and Research based in Toronto. Through its unique public-private partnership, CCRM’s mission is to capitalize on the commercial potential and curative promise of cell therapies and regenerative medicine technologies. Five years since its launch, CCRM’s focus has become more global and its relationships with countries, such as Australia, Singapore, Taiwan, Japan and China, are becoming more important as the organization sources technologies from around the world to advance cell therapies to all markets. The growth has been substantial. To put this in perspective: in 2014, the Asia-Pacific stem cell market was valued at US$7.10 billion and is projected to increase to US$18.71 billion by 2018 at a CAGR of 27.3 per cent.1 Globally, the stem cell therapy mar-

ket is expected to be worth US$40 billion by 2020 and US$180 billion by 2030.1 Canada has a long history with stem cells. Scientists James Till and Ernest McCulloch first discovered stem cells over 50 years ago in Toronto. Ever since, Canadian researchers have remained at the forefront of regenerative medicine research. For example, cancer stem cells and retinal stem cells were discovered here. Enhancing this legacy of scientific excellence and discovery is the collaborative attitude that exists between industry, academia and government. CCRM’s commercialization model combines network building – CCRM has built consortia of academic, industry and investment partners from the global community – unique facilities operated by staff dedicated solely to translation/commercialization, and targeted funding to bundle, de-risk, protect and leverage discoveries into licensable technologies or new companies. Moreover, CCRM’s collaborative and capital-efficient model integrates government support at all levels. CCRM’s business development team conducts due diligence on academic discoveries and its scientists and engineers perform wet diligence, fee-for-service projects and product development in a 6,000 sq. ft. development facility provided by the University of Toronto. By the end of 2016, CCRM will move into 40,000 sq. ft. of new office and lab space at MaRS’ West

Tower in the heart of Toronto’s discovery district. The jewel in the space will be a state-of-the-art centre for accelerating advanced manufacturing solutions for cell therapies, in partnership with GE Healthcare, with a sizeable investment from the federal government. To support the pipeline, CCRM and University Health Network will operate a Good Manufacturing Practices facility, backed by provincial funding. As well, CCRM has a fee-paying industry consortium of more than 45 Canadian and international companies – who range from start-ups to multi-nationals – and represent the key sectors of the regenerative medicine field: therapeutics, devices, reagents, and cells as tools. Lee Buckler is president and CEO at RepliCel Life Sciences Inc. (TSX.V:RP), a Vancouver-based company, which focuses on developing autologous cell therapies to treat conditions that result from a lack of healthy cells in the body. RepliCel has a partnership with Japanese company Shiseido to treat pattern baldness. RepliCel is a member of CCRM’s industry consortium. “There are compelling reasons for Canadian companies to be looking to Asian markets right now,” says Buckler. “RepliCel is concentrating on strategic initiatives in Japan because of its existing partnership with Shiseido Company, Japan’s national commitment to regenerative medicine, and the opportunity for expedited market approval now available there for cell therapies.” October/November 2016 BIOTECHNOLOGY FOCUS 11

Regenerative Medicine & Stem Cells Asia-Pacific companies looking to establish a foothold in North America. “As a leading cell therapy product development company in Taiwan, working with CCRM has provided us with valuable resources and consortium contacts to support our initiatives to enter the North American market,” says Bill Milligan, SVP Corporate Development & International Business Development, Steminent. The scientific expertise that exists in Canada, combined with its manufacturing experience, collaborative environment and favourable regulatory system make it an ideal location for international biotech companies to invest. Ryan Chang, CEO, Steminent agrees: “Our relationship with CCRM has been beneficial, specifically for our manufacturing, clinical advisory and regulatory strategies, as we focus on bridging our lead Phase 2 clinical project in Taiwan toward regulatory approvals and sites for clinical development in North America.” An essential tactic of CCRM’s business strategy is IP bundling and the company has developed several best practices around this strategy. IP bundling is the custom of taking intellectual property (IP) from multiple institutions and/or researchers and strategically combining them to create a marketable product or a fundable company. In June 2015, CCRM launched its first spin-off company, ExCellThera, which was built using this strategy. ExCellThera offers an innovative umbilical cord expansion platform for the treatment of blood cancers and other disorders. This is the first of several companies that CCRM has launched based on the formation of technology bundles. Another important relationship for CCRM is a partnership between Ontario stem cell researchers and their counterparts at Peking University in China. As the commercialization partner of the Ontario Institute for Regenerative Medicine (OIRM), CCRM is actively invested in this relationship and is working with OIRM and its Chinese partners to advance IP bundling and company creation. Michael May and delegates from Ontario have traveled to Guangzhou for meetings with their Chinese hosts. The Chinese representatives were exposed to the strong Cana-

“The knowledge we have gained from working with our industry consortium members has been invaluable to us,” explains Michael May, president & CEO of CCRM. “This is how we learn what the market actually wants and needs. By listening to academia, industry and investors in Asia, we will not only source novel technologies from diverse locations, but develop revolutionary products for patients in large, untapped markets,” he concludes. A relationship-driven business strategy requires a large investment of time and travel. Not only does CCRM staff travel to Asia often for meetings with potential partners – the Agency for Science, Technology and Research (A*STAR) in Singapore being just one example – they are regular speakers at prominent conferences, such as the 3rd Cell Culture & Bioprocessing Asia Congress held in Singapore last October and the International Society for Cellular Therapy’s (ISCT) annual meeting which took place this May. These trips – not an exhaustive list – serve as forums to present information and strengthen relationships with the local biotech communities Successfully bridging differences in the academic and industry cultures are essential to the CCRM model. To explain, academia is curiosity-driven, whereas industry is milestone driven. When the powers of both are harnessed, it’s possible to unlock new ways to commercialize cell therapies. As a not-for-profit funded by government, industry, institutions and investors, CCRM is an objective, neutral vehicle for advancing the regenerative medicine industry. CCRM recognizes, however, that it is difficult to achieve “critical mass” in a single institution, or even a single country. As a consequence, CCRM is establishing active hubs around the world to scale its IP sourcing, industry consortium and company creation to sustainable levels. Australia and Asia, and specifically Japan, are key targets for this activity because of the quality of the research, expertise and resources that exist. CCRM has already signed memorandums of understanding with partners on both continents to promote IP sharing and other initiatives. Of course, it takes two to make relationship building successful and beneficial to all parties. This is why CCRM also supports

dian research in blood development, expansion and transplantation that was identified as a focus for future collaboration between the two countries. As the partnership continues to evolve, commercialization expertise will become vital and CCRM is ready to facilitate access to North American markets and to gain the same access to Chinese markets in return. In addition to being the commercialization partner of OIRM, CCRM was also named as the commercialization partner of Medicine by Design (MbD), which brings together leading researchers in regenerative medicine and cell therapy at the University of Toronto and affiliated hospitals to generate paradigm-shifting discoveries and accelerate translation, commercialization and clinical impacts. Both OIRM and MbD are exciting government-funded initiatives that are funnelling a total of $139 million into regenerative medicine and cell therapy research in Ontario to treat degenerative diseases. CCRM is lending its commercialization expertise to these initiatives to move these discoveries through the pipeline and into clinical trials to help patients in Canada and around the world. None of CCRM’s international relationships would exist without the support of the Department of Foreign Affairs, Trade and Development (DFATD), which has been essential to CCRM’s continued success in collaborating and partnering with organizations outside of Canada. DFATD has provided introductions to companies abroad, set up meetings, hosted events and has been a significant advocate of CCRM and its model. Without their continued support, CCRM would not be making the headway today that it is globally. All things considered, the industry is progressing well, but it is important to remember that bringing new treatments to market takes time. CCRM and others are working hard to establish global relationships that are a critical component to seeing the industry move forward to realize the potential of cell therapies and regenerative medicine technologies and change the way many diseases are treated – for patients all over the world.

References 1. http://ww2.frost.com/news/pressreleases/stem-cell-therapy-redefineregenerative-medicine-says-frostsullivan2. http://ww2.frost.com/news/ press-releases/stem-cell-therapyredefine-regenerative-medicine-saysfrost-sullivan

(L to R) Nadine Beauger, CEO IRICoR, John Knubley DM Industry Canada, Steven Klein, CEO ExCellThera, Michael May, CEO CCRM, Reza Moridi, Ont. Min. of Research, Innovation and Science at BIO June 2015. 12 BIOTECHNOLOGY FOCUS October/November 2016

To see this story online visit www.biotechnologyfocus.ca/case-studyccrm-how-a-canadian-company-is-building-aregenerative-medicine-industry-in-canada-bydeveloping-ties-in-the-asia-pacific-region/

M&A Report

| Compiled By Shawn Lawrence

Special Report

MERGERS Acquisitions

Three former Canadian biotech company founders weigh in on how their deals went down, while providing some strategic advice for achieving a smooth exit

hen it comes to mergers and acquisitions, the Canadian pharmaceutical and biotechnology sectors saw their fair share in 2016. The deal-flow culminated with Marlborough, MA-based Sunovion Pharmaceuticals CDN$841 million purchase of Toronto-based Cynapsus Therapeutics Inc. in what was perhaps the biggest transaction of the year. This deal was very significant on multiple fronts as it allowed Cynapsus to maximize the financial return for its investors, while at the same, it ensured that the development of its lead product would continue. Certainly Cynapsus hit a home run on both fronts, and Sunovian was quite pleased with both the asset and the company they acquired. While financially less impactful, ProMetic

October/November 2016 BIOTECHNOLOGY FOCUS 13

M&A Report

Likewise, monetization isn’t the only driver behind the merger and acquisition process. More often than not, deciding to go the M&A route is about looking for a fresh start, sometimes even to the benefit of both parties involved in the deal. Life Sciences Inc.’s acquisition of Telesta Therapeutics (formerly Bioniche Life Sciences) was very significant strategically to the company. The deal allowed ProMetic to further integrate its manufacturing capabilities through its expansion into Telesta’s 150,000 sq. ft. manufacturing facility in Belleville, Ont. The transaction also allowed ProMetic to expand its presence nationally and provincially. Continuing with our rundown of 2016 M&A’s, there are many who view Miamibased OPKO Health’s acquisition of Transition Therapeutics, a Toronto-based clinical stage biotechnology company, in an allstock transaction valued at about $60 million, as a steal for OPKO. The deal, which was closed on August 31, saw OPKO land Transition’s full clinical portfolio, including a treatment for type 2 diabetes and obesity, a treatment for low testosterone, and a third neuropsychiatric drug candidate that 14 BIOTECHNOLOGY FOCUS October/November 2016

targets patients with Alzheimer’s disease and Down syndrome. For OPKO, it was a major windfall, but for Canadian biotech, it was both sad and disappointing to see the Toronto-based Transition Thereapeutics exit at such a low valuation. Unfortunately, the reality is that not all M&A deals are created equal, and not all exits are positive. Likewise, monetization isn’t the only driver in the merger and acquisition process. More often than not, deciding to go the M&A route is about looking for a fresh start, sometimes even to the benefit of both parties involved in the deal. Look no further than Quadrologic Technology (QLT) Inc.’s merger-slash-acquisition of Massachusettsbased Aegerion. Through this M&A, the two sides created a new company called Novelion Therapeutics Inc., and in its new incarnation, the company now has a diversified portfolio consisting of Aegerion’s two commercially branded products, Juxtapid®

(lomitapide) capsules and Myalept® (metreleptin), and QLT’s QLT091001 asset. And finally, not all the M&A’s of 2016 were “high-profile” deals. For example, earlier this year, Vancouver-based biotech Zymeworks Inc. completed a merger and acquisition of CDRD spin-out company Kairos Therapeutics. This deal saw Kairos’ technology and pipeline integrated with Zymeworks’ research platforms with a number of Kairos staff joining Zymeworks, including John Babcook, president and chief scientific officer of Kairos. He joined Zymeworks as senior vice president of discovery research. While not considered a major transaction on the world stage, it certainly was a victory for Canadian biotech, with homegrown innovation staying in Canada and one of the industry’s leading biologics drug discovery and development organizations becoming that much stronger. There were a lot of similarities between this deal and one that took place in January, where clinical immuno-oncology company Trillium Therapeutics Inc. acquired all of the outstanding shares of Fluorinov Pharma Inc., a privately-held oncology company spun out by FACIT. Under the terms of the agreement, Trillium agreed to acquire all of the outstanding shares of Fluorinov for an upfront payment of $10 million in cash, plus up to $35 million of additional future payments contingent on achieving certain clinical and regulatory milestones with an existing Fluorinov compound. Again, it was a case of Canadian innovation being kept in Canada, and an existing company becoming that much stronger through the acquisition. Looking back at these deals, and how such deals come about, we decided to ask three former Canadian biotech founders how their own M&A deals went down. Moreover, we wanted to know how they attracted the attention of a bigger player, and whether they struggled over the initial decision to sell. Among the participants providing their own keys to successfully completing an M&A deal are: Dr. Irena Barbulovic-Nad whose Toronto-based microfluidics startup Kapplex was acquired by San Francisco-based Miroculus in April of this year; Dr. Malik Slassi whose company Fluorinov was acquired by Trillium Therapeutics; and finally Dr. Scott Tanner, former chief technology officer of Fluidigm Corp. to discuss his decision to sell DVS Sciences in 2014.

M&A Report

Can you break down the deal for us, what was being acquired/the terms of the agreement etc? Irena Barbulovic-Nad: Miroculus, a San Francisco based company developing microRNA-based diagnostic tests, acquired Toronto-based microfluidics startup Kapplex on April 7, 2016. Through the acquisition, Kapplex became a wholly owned subsidiary of Miroculus and kept the operations in Toronto as one of the major R&D arms of Miroculus.

What do you think drove their interest to buy your company and what made Kapplex an attractive asset?

Irena Barbulovic-Nad, PhD Chief Operating Officer, Miroculus

“I am very optimistic about future of Kapplex under the Miroculus umbrella. Both companies have very similar visions about democratizing diagnostics and clinical tests, and now, with this merged, synergetic approach we can push forward much harder and reach our goals faster.”

Irena Barbulovic-Nad: Their interest in our company was technology driven. Miroculus has been developing tests for early cancer diagnosis based on detection of free circulating miRNAs in blood. They were looking for the right technology to miniaturize chemistry and to develop a completely automated instrument that can be operated by virtually anyone. Their vision has been to democratize diagnostics while offering high quality molecular tests. Kapplex had the right platform for it; we had been developing a diagnostic platform technology for accurate, sensitive, affordable and completely automated clinical tests of blood and other biofluids to detect common infectious diseases like flu or urinary infections. Our instruments and consumables are driven by a proprietary Digital Microfluidic (DMF) technology developed at the University of Toronto. Digital microfluidics enables complex clinical tests on a credit card size devices for the fraction of the cost and time compared to standard laboratory tests. It is flexible and adaptable to various types of clinical applications including cancer diagnostics.

Tell us about the genesis of the deal, did they come to you, or were you looking for an exit? Irena Barbulovic-Nad: After learning about our technology, Miroculus had approached us in spring 2015. Attracted by the capacity, flexibility and affordability of our instruments they wanted to explore the compatibility between our platform and their assays through an R&D project. The collaboration was successful and resulted in a prototype demon-

strating a good fit of the two technologies. Our teams worked very well together and we soon started talking about taking the collaboration to a whole new level.

Did you struggle over the decision to sell? What ultimately convinced you that the M&A path was the way to go?

Irena Barbulovic-Nad: Acquisition was not in Kapplex’s plans at that time and the M&A offer by Miroculus made our board go through a complex process of decision making. We were facing two options: 1) continue to fundraise, build the team and go to market ourselves, or 2) join forces with Miroculus and maximize our opportunities to get to the market with a product. The compatibility of our teams and a possibility to keep operations in Canada were important factors in the decision making.

Why was it the right time to do a deal of this nature?

Irena Barbulovic-Nad: As I said, Kapplex did not plan for an exit, but the M&A offer did seem to have come at the right time. We had an advanced hardware and software platform and were just starting to grow our bioassay team and to focus our product development on one particular assay/test that we would take to the market. Our platform is very flexible and can accommodate various types of tests, but we had to choose one test as our first go-to-market application. Miroculus assay/test for early cancer detection using miRNAs as biomarkers came at the right time and gave us an immediate focus. We saw huge potential in these biomarkers and were excited to discover through our initial collaboration that the Kapplex platform works well with miRNA assays.

Before or during negotiations, how many other companies did you talk to? And if you had multiple suitors, what factored into your decision that Miroculus was the right buyer?

Irena Barbulovic-Nad: I must say that 2015 was a very exciting year for Kapplex. We had conversations with two large life science companies on licensing and partnership. Also, concurrently with the Miroculus offer, there was a M&A offer on the table from another diagnostic company. The deals were similar and what made us choose Miroculus over the October/November 2016 BIOTECHNOLOGY FOCUS 15

M&A Report

other company was what we believed was a better market opportunity and the business case for Kapplex. As importantly, it was a decision based on people - it comes down to choosing people you will work with on a daily basis after the merger. We were fortunate to have had a chance to work with Miroculus for a few months prior to the acquisition and to test the compatibility of not only our technologies, but of our teams and company cultures.

Who assisted you in the deal, advisors, consultants?

Irena Barbulovic-Nad: We are grateful to MaRS Innovation, MaRS Discovery District and the University of Toronto for their assistance in this very important transaction for Kapplex. They were invaluable to supporting business negotiations and relations with all parties in the deal. They also made introductions to consultants and lawyers that would best assist in the transaction.

After the deal was made official, what was your initial reaction?

Irena Barbulovic-Nad: I was very excited that Kapplex was becoming a part of a new, bigger venture but at the same time, as its co-founder and CEO, I was somewhat anxious about handing over the company to another CEO and another board. The fact that I would be still actively involved in running the operations of not only Miroculus Canada/Kapplex, but of all of the Miroculus as its Chief Operations Officer made me feel more comfortable with the deal.

What are some of the elements you believe are essential to successful exits in biotech and the technologies markets?

Irena Barbulovic-Nad: The first thing would be to recognize whether a company is salable, or what it takes to make it salable if an exit is the main strategy. At any rate, a M&A should happen at a time when an exit seems to be the best business solution – sometimes it makes more sense to continue building the company and adding more value to it. Once an offer is on the table, then it comes down to having realistic valuation expectations followed by a solid negotiation execution.

Any tips that you can provide on the deal-making front whether it be negotiation tactics, or simply how you go about making a deal?

Irena Barbulovic-Nad: M&As are not trivial deals. Negotiations take a lot of time and can be quite exhausting, often times leading to deal fatigue. Not to risk losing the big picture and getting stuck on minor things, it is very important to prepare well to have an experienced and well-rounded legal counsel that can address all aspects of the deal from corporate to tax matters, particularly if it is a cross-border transaction as in the Kapplex case; and you want to make sure that all business points are very clearly covered early on, starting with the term sheet. Also, it is good to remind yourself often that the deal has to be a win-win solution for both sides. You want to converge on common ground.

Are you optimistic about Kapplex’s prospects and assets under new ownership?

Irena Barbulovic-Nad: I am very optimistic about the future of Kapplex under the Miroculus umbrella. Both companies have very similar visions about democratizing diagnostics and clinical tests, and now, with this merged, synergetic approach we can push forward much harder and reach our goals faster. I have lot of confidence in the Miroculus team and leadership.

Some say Mergers & Acquistions: aren’t the end of a tech story, that they’re the beginning of new ventures. On this front, what’s come next for you?

Irena Barbulovic-Nad: Alongside Miroculus, Kapplex is venturing into new markets with new products. As for myself, I am continuing to run Kapplex operations here in Canada while serving as Miroculus Chief Operations Officer on a global level. Growing operations internationally is a new set of exciting challenges for me.

Would you do it all again?

Irena Barbulovic-Nad: Yes. Once an entrepreneur always an entrepreneur.

16 BIOTECHNOLOGY FOCUS October/November 2016

Malik Slassi, PhD Sr. V.P. Discovery Research, Trillium Therapeutics Inc.

Can you break down the deal for us, what was being acquired/the terms of the agreement etc.? Malik Slassi: Trillium acquired all of Fluorinov’s assets including its preclinical product pipeline and proprietary Fluorine technology as well as small molecule medicinal chemistry expertise. Trillium made an upfront cash payment and committed to pay future milestones based on successful development of Fluorinov products.

What do you think drove Trillium’s interest to buy the company? What made your company attractive?

M&A Report

“We have tried very hard to attract investors from Canada, but unfortunately we received only small investments which were not enough to develop our pipeline to the next level and see Fluorinov flourish by its own.Therefore I strongly believe that it was the right decision and time.”

Malik Slassi: Trillium was looking to expand their exciting oncology pipeline beyond biologics and take advantage of the Fluorinov small molecule pipeline in combination therapy with Trillium biologics pipeline, which I believe is the future of the cancer therapy. I think what attracted Trillium to Fluorinov was the fluorine chemistry technology, the pipeline, the small team and most importantly, immediate access to our highly trained small medicinal chemistry team with proven expertise in small molecule drug discovery.

Tell us about the genesis of the deal, did they come to you? Or, Were you looking for an exit, and if so why? Malik Slassi: Fluorinov was not looking for an exit, rather we were looking for collaborations for individual programs, and when we were approached by Trillium we were in discussions with a couple of U.S. companies for individual programs. However, when we evaluated the overall complementarity

between the two organizations, we came to the conclusion that joining Trillium would be the best option for Fluorinov’s shareholders, technology and employees.

Did you struggle over the decision to sell? What ultimately convinced you the M&A path was the way to go? Malik Slassi: For me personally, it was an easy decision to join Trillium and this was for a few reasons. First, my main objective is to succeed in developing the Fluorinov assets in Canada, and specifically in Toronto, where I have been living for the last 25 years. We have received offers in the past from U.S. groups, but it was always tied to the condition to move to U.S. Second, the complementarity between Fluorinov’s small molecule and Trillium’s biological development expertise which has the potential to create one of the most powerful product development engines in Canada’s biotech industry.

Third, Trillium has the expertise and resources to realize the potential of Fluorinov’s proprietary fluorine chemistry platform. Finally and most importantly, to join Trillium’s team and culture that shares my profound vision and belief that we can be successful in Canada despite the challenges of investment in our sector.

Why was it the right time to do a deal of this nature?

Malik Slassi: We have tried very hard to attract investors from Canada, but unfortunately we received only small investments which were not enough to develop our pipeline to the next level and see Fluorinov flourish by its own. Therefore I strongly believe that it was the right decision and time.

Before or during negotiations, how many other companies did you talk to? And if you had multiple suitors, what factored into your decision that Trillium was the right buyer? Malik Slassi: Yes, there were other offers on the table and others involved in the diligence process, but for the reasons described earlier, we believed that Trillium was the right buyer. The integration with Trillium has been seamless and we know that we made the right decision.

Who assisted you in the deal, advisors, and consultants?

Malik Slassi: Fluorinov’s board had very deep experience in the biotech sector in Canada and U.S., and they were very helpful in guiding us throughout the process.

After the deal was made official, what was your initial reaction?

Malik Slassi: As a scientist, my joy is science and focusing on new scientific challenges. So my initial reaction was excitement of joining Trillium’s team to develop our assets and to further explore our collective expertise to create new products.

What are some of the elements you believe are essential to successful exits in biotech and the technologies markets? October/November 2016 BIOTECHNOLOGY FOCUS 17

M&A Report

Malik Slassi: There are different elements that I believe are a must to a successful exit in biotech and technology markets in Canada: (1) Sound science and technology with solid intellectual property; (2) Knowledge of the biotech sector and competitive landscape; (3) Extreme patience; (4) Awareness of your strengths and weaknesses; (5) And most importantly, the team must have diverse experience in the biotech sector and knowledge in science.

“We were equally fortunate to find an acquisition partner that was evidently enthusiastic about our vision – including our desire to maintain R&D and manufacturing in Canada. This was the right decision, and it was made carefully and strategically. ”

Any tips that you can provide on the deal-making front whether it be negotiation tactics, or simply how you go about making a deal? Malik Slassi: Obviously, there was a lot of back-forth during negotiations, but I believe during the due-diligence and the negotiation process, you build a unique relationship with a potential buyer that comes down to transparency, honesty and common benefit.

Are you optimistic about Fluorinov’s prospects under new ownership?

Malik Slassi: I’m very fortunate for the opportunity to join Trillium’s team, and of course, very optimistic about Fluorinov’s prospects under Trillium, as I have received full support to develop Fluorinov’s technologies.

Some say Mergers & Acquisitions: aren’t the end of a tech story, they’re the beginning of new ventures. On this front what has the transition to Trillium been like for you? Malik Slassi: I would say Mergers & Acquisitions are the end of a chapter and the beginning of a new one, and this new chapter is as exciting as when I founded Fluorinov. The transition has been great. I really feel that I have been working with Trillium’s team for many years, and this could not have happened without tremendous support from the company’s senior management, led by President and CEO, Dr. Niclas Stiernholm.

18 BIOTECHNOLOGY FOCUS October/November 2016

Scott D. Tanner Former Chief Technology Officer, Fluidigm Corp.

At the time of the deal, did you struggle over the decision to sell? i.e. the company was your baby.

Scott Tanner: I was fully and thoroughly engaged in the process, and fully committed to the process and outcome. Three years ago, and after an exhaustive search, we completed a Series A venture capital investment that ultimately bequeathed majority ownership of the company to the investors. We sought that investment, and the talent/mentorship that comes with it, so that we could develop a global market presence. The natural outcome of such investment is that there will be an exit for the investors. That exit is normally in the 3 to 7 year window; we achieved that goal at the short end of the timeline. The cofounders of DVS Sciences fully understood the opportunity and the expected outcome of this venture capital. We were fortunate to secure supportive and knowledgeable investors, and they were sensitive to both our needs and wishes during that gestation. We

were equally fortunate to find an acquisition partner that was evidently enthusiastic about our vision – including our desire to maintain R&D and manufacturing in Canada. This was the right decision, and it was made carefully and strategically.

What [are] some of the elements you believe are essential to successful exits in biotech and the technologies markets? Scott Tanner: It’s incredibly important for companies to document every step, every decision, every agreement in a form that can be quickly recalled to support due diligence inquiries and that can be incorporated in the schedules of the investment and M&A agreements. Keep an ongoing cross-reference of the parties involved and the dates of those events. Even apparently insignificant events can become significant at the time of investment or M&A. Second, be welcome to bringing in experienced leadership (aka, hire your new boss!) at least two years before an anticipated exit. Founders often carry certain baggage that can make them a poor choice to negotiate an exit, and they are rarely experts in navigating these waters.

M&A Report

What is necessary for a successful exit? The definition of “a successful exit” may vary. My definition is an appropriate financial return combined with the retention and culturing of the founders’ vision. In our instance, that vision included the continuation of the technological framework in Canada and the ability to continue to develop innovative technologies that are desired globally and that will contribute to improved understanding and, hopefully, improved response to disease and health.

The investment bankers’ principal job, in my experience, is to find the right potential M&A partner; your job is to provide timely, complete, and truthful response to due diligence requests (hence the need, above, to fully document every event in your history). In the end, there are opportunities to add value to the deal – for example, by sharing risk on uncertain outcomes (IP prosecution, market penetration, etc.). It is your job to ensure those are added values rather than potential risks.

Here are the necessary ingredients: • A technology/product that has a demonstrated customer need and acceptance; • Preferably be cash-flow-positive and profitable, or have a solid plan to become profitable; • A market-appropriate gross margin: I suggest greater than 65 per cent (for instruments) or 85 per cent (for reagents) is a minimum to prove the above customer need; • Have a pipeline of new products; • A cohesive and supportive senior management team that shares and supports your vision; and • A team, across every level, that is engaged, enthusiastic, and (foremost) effective.

Some say Mergers & Acquistions: aren’t the end of a tech story, that they’re the beginning of new ventures. On this front what came next for you?

Any tips that you can provide on the deal-making front whether it be negotiation tactics, or simply how you go about making a deal? Scott Tanner: From my perspective, it is principally important to have a real and demonstrable product that inspires customer excitement and that can reasonably be expected to fulfill the customer’s expectation. Beyond the technology itself, that requires appropriate regulatory approval (or reasonable expectation to achieve that). You should have an investment banker that is respected by the majority of your potential exit partners – if only because the banker can then handle some of the minutiae that can become bothersome. Again, having an investor group, board of directors, and negotiating team that align with your principal vision is critical to a successful exit for you, and hopefully for your investors.

Scott Tanner: For me, the year following the exit was an opportunity to imprint on the organization my vision, and to maximize the opportunities for the team that we had assembled. What’s next for me is to focus on my family, and to volunteer to help guide the life sciences agenda in Ontario and Canada, and to provide mentorship to other early-stage entrepreneurs, primarily through my role with Life Sciences Ontario and Ontario Genomics. And of course, to explore what opportunities may lie ahead.

“I think it’s important to listen very carefully to the people you’ve entrusted to advise you. Everything worked for us in the end, but I do know that a common founder’s mistake is to too lightly brush aside inconvenient advice. ”

Would you do it all again, and if not, what would you do differently? i.e. Do you miss running a company? Scott Tanner: The birth of DVS Sciences was an opportunity borne of more than two decades of planning: it took that long to learn the ropes of technological innovation and to engage the team that could convince me to take the big step. It’s hard to say what I’d do differently. I think it’s important to listen very carefully to the people you’ve entrusted to advise you. Everything worked for us in the end, but I do know that a common founder’s mistake is to too lightly brush aside inconvenient advice. On a personal level, I miss the daily interaction with the team that we assembled – and I mean the entire team of managers, production and commercial operations. It remains a great pleasure to know that they are happy and as enthusiastic as ever.

To see this story online visit www.biotechnologyfocus.ca/special-reportmerger-acquisitions/

October/November 2016 BIOTECHNOLOGY FOCUS 19

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stem cells

| By Joe Sornberger

THINK BIG As stem cells emerge as treatments for a variety of currently incurable diseases, Canada needs a co-ordinated strategy to score economic goals

ime was slipping away for Dan Muscat, a 49-year-old St. Thomas, Ontario jeweler who has systemic scleroderma. The rare and painful autoimmune disease hardens the skin before invading the internal organs, eventually leading to death. Energy had never been a problem for the self-motivated Muscat who, aside from running his jewelry business, loves fishing, collects sports cars and built his own log home. Then scleroderma struck him so hard he could barely get out of bed. It turned his skilled hands to stone. Muscat underwent an experimental stem cell transplant at The Ottawa Hospital over the summer that could extend and significantly improve his life. So far so good: “I feel optimistic again,” he said after his release from hospital. For Muscat, stem cells signify -- at the very least -- hope and -- at the very best -- a second chance at life. He is far from alone in his search for stem cell treatments for conditions that continue to frustrate modern medicine. People across Canada have been touched by the story of Jonathan Pitre, the remarkably upbeat 16-year-old Ottawa boy who traveled to Minnesota for a stem cell treatment to spare him from some of the ravages of his skin-blistering epidermolysis bullosa (EB). At the time this was written his first stem cell transplant had failed to engraft and he and his mother were pondering whether to attempt a second one. James Price, president & CEO of the Canadian Stem Cell Foundation (CSCF), has a twoand-a-half-inch- thick stack of email printouts on his desk, each sheet representing someone seeking help for themselves or a loved one for conditions or diseases ranging from Alzheimer’s to spinal cord injury. “And those are just the email inquiries from the past 14 months,” says Price, who has been working to advance stem cell research and development in Canada for the past 14 years. “Then there are the many phone calls and enquiries and comments left on our blog each week.” Most often, responding to these pleas for stem cell help means explaining that the science isn’t there yet, which comes as cold com-

fort to someone who is suffering a severely life-limiting disorder. But little by little, things are inching toward clinical trials for a variety of diseases for which there currently are no cures. Muscat contacted the CSCF in January, desperately seeking help. “Fortunately, we were able to put him in touch with Dr. Harry Atkins at The Ottawa

Hospital,” said Price, “because we know Harry’s doing remarkable things with autoimmune diseases like multiple sclerosis (MS), Crohn’s disease and Stiff Person’s Syndrome.” Dr. Atkins, whose June Lancet paper described his transplant team’s success with MS, had never treated a scleroderma patient but was intrigued.

Muscat underwent an experimental stem cell transplant at The Ottawa Hospital over the summer that could extend and significantly improve his life.

Dan Muscat with Brenda Allen (sister)

October/November 2016 BIOTECHNOLOGY FOCUS 21

stem cells

“The Government can see how the Strategy would not only lead to cures and save lives, but also generate thousands of good jobs and boost the economy.” — James Price, President & CEO of the Canadian Stem Cell Foundation (CSCF) “There was a randomized trial in Europe that had very good results,” says Dr. Atkins. “I know the doctors involved and their methods have been published.” After five months of treatment, including several weeks in hospital and plenty of physiotherapy, Muscat reports increased range of motion and significant lessening of the pain, which previously was “like hitting your finger with a hammer, where you want to put your hand between your legs and cry.” Dr. Atkins, however, urges caution. “We got him through this (the stem cell/chemo combination treatment) and will have to wait and see until his rheumatologist assesses him. This is not a curative treatment. It doesn’t make scleroderma go away and never come back.” Not every systemic scleroderma patient is a good candidate for the stem cell treatment, especially if their lungs and other internal organs have been affected. Still, a treatment is now possible for some, which is better than being told to go home and get your affairs in order. There is also evidence that stem cell transplants can induce sustained remissions in patients with other severe autoimmune diseases such as lupus, rheumatoid arthritis and juvenile arthritis. At Northwestern University in Illinois, Dr. Richard Burt is investigating stem cell treatments for more than 20 autoimmune diseases. He, too, has had some success treating MS. Looking beyond autoimmune disorders, stem cells are now being explored -- with promising early results -- as treatments for baffling diseases such as amyotrophic lateral sclerosis (ALS or Lou Gehrig’s disease) in the U.S. Here in Canada, stem cells are being tried to treat septic shock, osteoarthritis and to prevent scarring after heart attacks. Trials are underway in Alberta to test the use of progenitor-cell implants to eliminate the need for insulin injections for diabetics. In the U.S., Japan and the United Kingdom, stem cells are being tried as a sight-restoring treatment for macular degeneration. Dr. Duncan Stewart, head of the Ontario Institute for Regenerative Medicine, likens the current state of cell and gene therapy

to the early days of the personal computer when “it was very frustrating -- you did it for fun, really, for word processing, but it was hardly earth-shaking. Now you look at a PC and it can do what NASA used to do with a great big mainframe. A smartphone can do absolutely everything. The technology has evolved to the point where it’s changed the whole landscape.” Dr. Stewart, himself a leading researcher (he heads the aforementioned heart attack study), would like to see more movement from research labs to clinical trials “in a safe and responsible way, to get the experience in the context of the patient population that has the disease. Because you can never model all this completely in the lab.” The problem with clinical trials is they are very costly. And, says the CSCF’s Price, it can be hard to get big pharma interested in investing in stem cell solutions that often involve a process, like the treatments Muscat received, and not a product. “While there are definite drugs and products waiting to be developed, there is no Viagra equivalent that will earn hundreds of millions of dollars,” says Price. “That’s why, to make this happen, we need to think differently -- and to think big.” The CSCF led the coalition of researchers, clinicians, industry partners, health charities and philanthropists that crafted the Canadian Stem Cell Strategy, a $1.5-billion plan to deliver five to 10 curative therapies to the clinic within 10 years. Already one-third of the funding has been pledged from philanthropists and non-federal sources. The CSCF has approached the Federal Government to integrate the Strategy into its Innovation Agenda and provide one-third of the funds -- roughly $50-million a year for 10 years. So far, says Price, cabinet ministers and ministerial executives have been receptive to the idea, which has been encouraging. “The Government can see how the Strategy would not only lead to cures and save lives, but also generate thousands of good jobs and boost the economy.” The potential economic impact could be as

22 BIOTECHNOLOGY FOCUS October/November 2016

attractive as the treatments and cures that could come from intensified investment in stem cell/ regenerative medicine R&D. Bloomberg News reported in July that Japan is preparing to tap a global market for regenerative medicine that will grow to $120-billion by 2030 and set off “a medical and industrial revolution.” The Centre for the Commercialization of Regenerative Medicine (CCRM) predicts the Strategy could generate in excess of 12,000 jobs for Canadians via the growth of existing companies and the development of new enterprises. Recent investments suggest the Trudeau Government recognizes the potential, with a $20-million commitment to the CCRM to advance cell manufacturing and a $12-million, two-year extension to the Stem Cell Network that synergizes the efforts of stem cell researchers across Canada. Looking forward, the Government has asked the Council of Canadian Academies to study the state of regenerative medicine in Canada and report back in early 2017, identifying “the opportunities that exist and barriers that must be overcome for Canada to ensure that it can excel in regenerative medicine in the international arena.” The stem cell community asserts that the time to act is now. A September iPolitics piece declared that “Canada has a deep well of innovative talent in a range of sectors. But there is fierce international competition for Canadian expertise and the jobs and economic rewards that flow from cutting-edge ideas; just look at the 250,000-plus Canadians living and working in Silicon Valley. The pressure to move quickly and effectively — to avoid being left behind — is enormous.” Along with Price, the iPolitics piece was co-authoured by Dr. Molly Shoichet, named the 2015 North American winner of the L’Oréal-UNESCO Awards for Women in Science, and Peter MacKinnon, former president and vice-chancellor of the University of Saskatchewan. Ultimately, though, the true beneficiaries of the Strategy and a co-ordinated, big-think approach to stem cell/regenerative medicine R&D will be people like Dan Muscat and the millions of others like them across Canada and around the world looking for a way to get better. “I know I still have the remnants of the disease,” said Muscat, “but I want to regain everything I had before. I want to get back to my business. I want to spend time with my son. And I have a lot more fishing to do. I feel like I have a second chance at life.”

To see this story online visit http://biotechnologyfocus.ca/comes-stemcells-canada-needs-think-big/

Across Canada

| By Doré Collett, SRC

The future of agricultural biologics IMPROVING CROP PRODUCTION Demand for agricultural products continues to grow as the world’s population increases. At the same time, crop productivity can be seriously impacted by stresses such as drought, pests and weeds. Fertilizers and pesticides play a part in overcoming these obstacles, but crop biologics have an increasing role in the success of the agriculture industry.

he Saskatchewan Research Council (SRC) is working with academic researchers and biotech companies to develop and commercialize a new generation of crop biologics, providing an environmentally sustainable solution to increasing crop production by improving seed viability, plant health and crop yield. Located in the centre of Canadian agriculture, SRC offers world-class fermentation facilities and contract services that are accelerating the commercialization of this next generation of crop biologics. In the context of improving global food security, SRC vice-president of Strategic Initiatives Phillip Stephan feels “it’s quite exciting for us to enable process optimization, scaleup, and production of these crop biologics that hold such promise and potential impact for Saskatchewan crop producers and the global markets they serve.”

Crop biologics Stephan adds that recent advances in metagenomics and bioprospecting technologies are creating tremendous opportunities to increase food production and promote global food security through the discovery, development, and commercialization of new crop biologics. Crop biologics research focuses on beneficial microbes, their symbiotic relationships with plants and how those relationships help plants thrive under a range of environmental stresses. Like the good bacteria that lives in your gut and helps your body’s digestion and metabolism, the right microbes can improve plant health by fighting disease, increasing nutrient absorption and improving water use efficiency. Microbes called endophytes can work inside a plant’s cells to augment the plant’s metabolism and contribute to overall health. Endophytes are receptive to what is going on October/November 2016 BIOTECHNOLOGY FOCUS 23

Across Canada

A 15 L stainless steel automated bioreactor. A lab technician prepares samples for testing. Photos courtesy of SRC

“A new generation of microbial inoculants which consist of fungal and bacterial partners attached to a plant’s seed and root, are ground-breaking discoveries for innovation and biotechnology.” — Vladimir Vujanovic, University of Saskatchewan

outside of the plant, assisting it to cope with external stressors such as disease, pests and climate irregularities such as drought, by providing good enzymes to balance the plant’s defense or resistance to these stressors. Scientists, like the University of Saskatchewan’s Vladimir Vujanovic, have identified various naturally occurring microbes that can be used to improve plant health when introduced to the plant’s microbiome, an ecological community of microorganisms. These microbes were identified through bioprospecting of agricultural crops and utilized in recent research and development. Microbes showing positive effects in initial studies are then applied to plant seeds, soil, roots or leaves to validate their impact on the plant productivity.

7.4 billion and growing According to the United Nations, the world population is expected to reach 9.6 billion by 2050. Water and food resources are going to be under serious pressure as the world’s global population continues to climb. The challenges of water and food security are further aggravated by the impacts of climate change and combine to put a lot of strain on the agriculture sector. Indigo, a Massachusetts based company focused on harnessing nature to help growers sustainably feed the planet, believes that biologics represent a major breakthrough. David Perry, president, CEO and director of Indigo states that agricultural productivity is a fundamental part of the solution, since worldwide agriculture accounts for 70 per cent of all water consumption. “To avoid a potential water gap, we as an industry need to invest in innovations that make our crops more resilient to various climate conditions, thus increasing

24 BIOTECHNOLOGY FOCUS October/November 2016

water use efficiency,” he says. “We must feed more people with less water.” Perry and his team at Indigo focus on microbes that have evolved in conjunction with plants over millions of years to optimize their health and maximize their productivity. The resulting products complement a plant’s natural processes to improve strength across each stage of plant development, while boosting crop yields.

What does the future hold? “The next step is to determine if microbes can be produced on a scale that will help Canadian farmers,” says the University of Saskatchewan’s Vujanovic. “A new generation of microbial inoculants which consist of fungal and bacterial partners attached to a plant’s seed and root, are ground-breaking discoveries for innovation and biotechnology. These discoveries will benefit pulses, soybean and canola crops in a variety of ways, improving yield for sustaining and improving agricultural production under the increasing stresses of climate change.” Indigo’s vice-president of Bioprocess Development and Manufacturing David Easson adds they want to improve plant health and performance by coating seeds with beneficial microbes prior to seeding. “We partner with teams like the Saskatchewan Research Council, the National Research Council and the University of Saskatchewan to identify the right microbes to meet the needs of the growers. We look forward to continue working with Canadian experts so together we can explore how we maximize the promise of this new technology on the Canadian prairies.” With considerable investments being made by small and large companies alike, a new generation of crop biologics is beginning to emerge to bring these technologies to farms across Saskatchewan, Canada and the world. To see this story online visit http://biotechnologyfocus.ca/futureagricultural-biologics/

Regulatory

| By Christelle Gedeon, Ph.D.

Regulators seem Uniquely Focused on Regulating Industry through

Compliance with Advertising Regulations

o you remember racing to the bottom of the cereal box to discover what treasure lied inside? We all have memories of beholding a hockey trading card or a dinosaur that grew in water which gave us a few moments of joy before rushing off to school. Well, Bill S-228 entitled The Child Health Protection Act (the “Bill”)1 may bring an end to the practice of offering a gifts (or in the words of the Bill, consideration) directed to children in exchange for a purchase. By way of background, it would seem that Canada ranks sixth among industrialized nations in respect of its percentage of children who are obese. On January 25, 2016, the WHO’s Commission on Ending Childhood Obesity2 found that there is evidence that the marketing of unhealthy foods and sugar sweetened beverages has a negative impact on child obesity. In its report, it recommended that any attempt to tackle childhood obesity should include a reduction in the exposure of children to marketing to such products. An so, along comes Bill S-228 which underwent its first reading in the senate on September 27, 2016. The Bill seeks, inter alia, to make the following amendments to the Food and Drugs Act:

• Defining the age for Children: Children are now classified as persons under 13 years of age. • No labelling, packaging or advertising to Children: No person may label or package, or advertise any food in a manner that is directed primarily at children. • No Brand promotion: A display or depicting of a food or its label or package or of a brand element (such as a brand name, trademark, trade name, distinguishing guise, logo or slogan) in association with a sponsorship for an activity intended primarily for children, except in respect of sports equipment or other durable goods in support of the event or activity or (ii) a permanent facility that is intended primary for children such as a daycare or school is not permitted.

• No Testimonials: No person may, directly or indirectly, promote food by means of a testimonial or an endorsement in a manner that is directed primarily at children. This includes the depiction of a person , character or animal, whether real or fictional is considered to be a testimonial or an endorsement. Let’s hope Tony the Tiger and Ronald McDonald have a timeshare reserved for retirement. • Prohibited Sales Promotions: No person may offer or provide in exchange for the purchase of a food, any direct or indirect consideration that is intended primarily for children. Consideration includes a gift to a purchaser or third party, a bonus or a right to participate in a game, lottery or contest. The only permissible promotion by testimonial or endorsement is by a public

On January 25, 2016, the WHO’s Commission on Ending Childhood Obesity found that there is evidence that the marketing of unhealthy foods and sugar sweetened beverages has a negative impact on child obesity.

October/November 2016 BIOTECHNOLOGY FOCUS 25

Regulatory

health authority (or someone acting in collaboration with a public health authority) for educational purposes. The Bill stands to have repercussions in several sectors of the food industry beyond our beloved cereal prizes including restaurants (Less than Happy Meal, anyone?) and confectionary (Kinder No Surprise), just to name of few. Overall, the approach taken seems paternalistic in that it does not consider the effects of socio-economic status, education, genetic predisposition and parenting, in contributing to childhood obesity in Canada. Instead, the Bill seems to place the burden most heavily on the shoulders of industry and perhaps unfairly so. The Bill seems intent on pushing industry to do more to promote a healthy, active lifestyle in children below the age of 13 despite the positive results shown in 2015 Compliance Report3 issued by Advertising Standards Canada. It would seem that the Bill is a renewed effort by the government to increase enforcement of advertising standards in Canada. On the prescription drug side, a number of hospitals, natural health product manufacturers, plastic surgeons and pharmaceutical companies found themselves specifically named on Health Canada’s list of advertising enforcement actions made public last January.4 In an effort to increase transparency, Health Canada provided details of over 152 advertising infractions it undertook to enforce in 2015. The list of infractions included: 1) Complaints regarding the direct-toconsumer advertising of an unauthorized product 2) Complaints regarding advertising of unauthorized claims 3) Complaints regarding the direct-toconsumer advertising of specific products such as Botox, Latisse, Dysport. 4) Complaint regarding the advertising of an unauthorized product to healthcare professionals and formulary officials; 5) Complaint regarding the advertising of an unauthorized product. In the post Vanessa’s law era, naming names as Health Canada has, may be a nudge to industry that these types of violations are now going to be enforced and taken seriously. Either way, the publicity associated with being included in this list will force several, if not all, manufacturers and license holders to take a good hard look at the types of claims they are making to the public.

Make sure your product is approved or has the appropriate licenses required to be sold in Canada. This is particularly relevant to natural health products and neutriceuticals.

While informative of the types of violations that garner attention from the regulatory, namely Health Canada, it equally acts as a hypothetical dunce hat for those who find themselves on the list. More importantly, it may be that the intended purpose for publishing the list is to obtain passive compliance from “perpetrators” (their words not ours) to voluntarily comply with acceptable advertising rules So how do you keep yourself out of regulator’s line of sight whether you are adverting foods, natural health products, prescription products or some other regulated materials in Canada? You may consider putting into place a few internal checks and balances that can assist in drafting promotional materials that is compliant and cost efficient: • This may be a little obvious (but has been included because of the types of complaints included on the list), make sure your product is approved or has the appropriate licenses required to be sold in Canada. This is particularly relevant to natural health products and neutriceuticals. • When making claims, avoid adjectives in the description of your products, be it cosmetics, food, natural health products, medical devices or drug products. • State the therapeutic benefit or use of the product (if applicable) in simple straightforward language and only if there is quantitative data that can substantiate the therapeutic claim. • In the absence of unequivocal quantitative data, avoid comparative language, in any form. This means, not only avoiding references to other products, but also suggesting that the product is better.

26 BIOTECHNOLOGY FOCUS October/November 2016

• When in doubt, recite the language verbatim in the product labelling currently approved by the relevant regulator. While your marketing department will likely hate you, it will keep you out of hot water with the regulator, be it Health Canada or the Canadian Food Inspection Agency and the like. • Finally, consider creating an internal advertising committee consisting of members of your regulatory group, marketing group and your legal department. Alternatively, you may consider appointing and training a single individual to be the advertising compliance officer who has access to counsel (either internal or external) to vet materials before they are released to the public. and be accountable for the contents of promotional materials.

References 1. http://www.parl.gc.ca/HousePublications/Publication.aspx?Language=E& Mode=1&DocId=8439399 2. http://www.who.int/end-childhoodobesity/en/ 3. http://adstandards.com/en/childrensi nitiative/2015ComplianceReport.pdf 4. http://www.hc-sc.gc.ca/dhp-mps/ advert-publicit/complaint-plaintes/ index-eng.php Christelle Gedeon, Ph.D., Associate Fasken Martineau DuMoulin, LLP To see this story online visit www.biotechnologyfocus.ca/regulatorsseem-uniquely-focused-on-regulatingindustry-through-compliance-withadvertising-regulations/

LAST word

| By Dr, John Kelly, CEO, KeliRo Company Inc.

The Big Data Conundrum

anada must be faster at innovating. This crosses many sectors. From information technology, to biotechnology, to agricultural sciences, to environmental biology, to medical therapeutics, there is a common thread. All of these areas are data intensive. More and more, information is becoming available to help deal with challenges to health, production, the environment and more. It is truly becoming a larger challenge to critically access data, and to completely capitalize on what is being provided. It is the proverbial “Thirsting for Knowledge, Drowning in Information” position. The move to “big data” is having an immense impact on the life sciences. And it is becoming increasingly difficult to find that nugget of usable information from the reams and reams of available data. There are many outstanding questions now on how we deal with data, such as: How do we access the data? How do we store data and do we have capacity for keeping data? Who owns the data? And more! Environmental management requires a lot of information. Decisions on how to deal with various challenges requires interpretation of volumes of data. Sometimes decisions can be made with incomplete data with controversial responses. The sources of phosphorus in Lake Erie’s algal blooms are being monitored from point sources, but these actually may not be enough. Cross border acquisition of data is also happening and comes in various forms. Acquiring the amount of data that is required to make a comprehensive decision can be very costly. This would be an instance where the cost of acquiring the data may compromise the veracity of the data. In agriculture, data is driving farming decisions. For example, global positioning systems, and self-driving tractors and combines are driven by data. Similar to the self driving car which is imminent on the market, there are companies developing the driverless and in fact “cab-less” tractors. Agriculture has embraced self-driving technology, and data can tell you what was planted within a square foot, and also what the harvest was within a specific part of a field. All of this technology is providing farmers critical information for decisions on what fields to plant, when to plant, what to plant and how to maximize production. We are at the point where it is necessary to have the ability to evalu-

30 BIOTECHNOLOGY FOCUS October/November 2016

ate terrabytes of data in a short window. Nowhere is the data conundrum becoming more acute than in the genomics space. Many species’ full genomes are known and even the human genome can be found online. Capitalizing on plant and animal genomes offer tremendous opportunity to improve the way we develop food products. And it is not just the general production of agricultural products that are the only topics of consideration. Genomics allow us to look into diverse characteristics beyond production. For example, understanding the genomic linkage to aggression in livestock and finding ways to mitigate this could lead to a better environment for animal husbandry. The secondary benefit could also be improved financial return to the farmer because of improved performance. The study of genomics and data mining could offer tremendous insights into rare diseases. One of the many challenges is related to the phenotypic linkage to the genomic traits. When many diseases have similar symptoms, the ability to effectively mine data for potential solutions will no doubt lead to faster diagnoses and treatment solutions. The immensity of the data that must to be searched could also make the determination of the solution also costly. But, it could potentially be significantly less intrusive and deliver effective solutions in a much more timely manner. Instead of taking years or decades for solutions, our ability to find links through genome mining could be advantageous to many. Whether you are monitoring the moisture content of a field growing tomatoes, understanding the output traits required for industrial oil production from plants, tracking phosphorus pollution in Lake Erie, or developing solutions to human health issues, use of big data will play a larger and more essential role. Our ability to manage these data will no doubt impact the pace of science and speed of innovation adoption and affect the Canadian competitiveness in the international landscape.

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THE CANADIAN FOOD LANDSCAPE:

REGENERATIVE MEDICINE CASE STUDY

ACROSS CANADA

THINK BIG