ONTARIO BIOSCIENCE INNOVATION ORGANIZATION
ONTARIO By Gail Garland, CEO OBIO
ONTARIO’S BIOSCIENCE CLUSTER: TAPPING THE UNTAPPED POTENTIAL The OBIO® 2012 industry consultation and survey built on knowledge gained from OBIO’s previous three years of consultations. The financial health of Ontario’s industry hasn’t changed significantly from prior years. Most companies are pre-revenue (50 per cent) and 47 per cent have annual revenues of less than $10 million. Companies report their financial runway is approximately 14 months and the majority (82 per cent) of those who have raised capital (61 per cent) in the last year have raised less than $2 million. Research and development consumes 46 per cent of working capital followed by marketing and sales which accounts for 34 per cent. Patent costs, clinical trial costs and costs to raise capital consume the balance. Rather than purely provide a ‘state of the industry’ update, this year’s consultation undertook to explore the sector’s potential in healthier conditions brought about through the reduction of uncertainty largely related to insufficient financial resources. With a nod to professor Michael Porter’s (Harvard University) work on cluster strength (Figure 1), OBIO asked industry leaders to weigh in on the quality of the business environment, access to specialized risk capital and depth within the domestic human health sciences private sector. Specifically, the survey sought to gauge companies’ progress and expansion through the creation of new jobs and the impact on key projects’ time to commercialization. Additionally, the 2012 consultation survey set out to demonstrate the potential impact of the adoption of policies by the provincial government aimed
26
Biotechnology Focus / April 2013
at improving the quality of the business environment. Survey results confirmed that most roadblocks and challenges facing biotech companies are related to uncertainty and insufficient funding. Industry’s feedback from 56 of 150 invitees was presented by David J. Pye, Ph.D at OBIO’s Annual General Meeting in November, 2012. Stable funding and hiring: 38 per cent of responding companies reported that hiring and retaining key personnel had become increasingly expensive in the last five years. This resulted in delayed company growth for a third of responders and 20 per cent reported it had a negative impact on acquiring funding. Looking forward to 2013, 50 per cent of companies reported that filling planned new positions would depend on their ability to secure adequate funding. However, given an environment of reduced uncertainty, companies would increase planned hiring by more than 20 per cent (Figure 2). Respondents noted that even if hiring positions were created, numerous essential skills remain difficult to find in Ontario.
The skill gap includes: • Scientists with corporate experience • Regulatory and Clinical Specialists • RF Engineers • Industry experience / drug developers • US health IT experience • Depth of biotech experience • Regulatory skills • Special skills / experienced professionals with adaptive industry (non-academic) roles • Device commercialization background • Financial expertise for small company fundraising • Biologics manufacturing skill set (i.e. research and development) • C-level talent/Senior Managers • Successful serial entrepreneurs Acting on this data and the work of OBEST™ (Ontario Bioscience Economic Strategy Team), OBIO will survey industry stakeholders to understand explicitly what misalignment exists between talents coming out of Ontario’s educational institutions and what skills industry needs. It is OBIO’s intent to not only create awareness
TABLE 1:
Obtaining stable financing would be less of an obstacle (to growth)
37%
Local policy that is supportive of the industry and its ecosystem
29%
Finding and retaining key personnel would be easier
11%
The time to commercialization of new products would be significantly shorter
6%
Other Reasons
17% 0%
10%
20%
30%
40%
