Biotechnology Focus April/May 2014

INSIGHTS FOR THE LIFE SCIENCE INDUSTRY

THE

RISE IN STRATEGIC FUNDS

INSIDE:

ENABLING BETTER DIAGNOSIS AND TREATMENTS FOR CANCER PATIENTS

Publication Mail Registration Number: 40052410

APRIL/MAY 2014 VOLUME 17, NUMBER 2

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contents April/May 2014 – VOLUME 17 – NUMBER 2

19 The future of joint repair

FEATURES

12 Enabling Technologies

Enabling better diagnosis and treatment for cancer patients (By Brad Popovich)

17 Venture groups and pharmaceutical companies are forging a more direct relationship when raising funds

Opinion

14

Biotech Angels at Work On uppers or downers? And can you change their meds?

(By Robin Sundstrom)

17 Innovative investment models A growing trend has seen venture groups raise Funds anchored by a major strategic partner (By Luc Marengere)

22 Translating Molecular Diagnostics into the Clinic Overcoming challenges in the clinical development of molecular diagnostics in Canada (By Katherine Bonter and Tania Bubela)

IN EVERY ISSUE

19 Across Canada

DEPARTMENTS 6

Novel approaches to cartilage regeneration: the future of joint repair (Special to Biotechnology Focus)

Research news

30 The Last Word

10 Business corner

Strategic Rising: Models of engagement for research and development (By Cédric Bisson)

28 Calendar of events

7 Research news

GLOBE Association names Solegear Bioplastics ‘Polysole’ product as best emerging technology www.biotechnologyfocus.ca

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April/May 2014 BIOTECHNOLOGY FOCUS 3

ABIC

PUBLISHER’S NOTE

PUBLISHER/ EDITOR-IN-CHIEF SENIOR WRITER

Back by popular demand: “Genomics: the Power and the Promise” This month’s issue of Biotechnology Focus is a generous mix of science and business.

On the science side we delve into translational research and how it relates to personalized medicine and genomics.

Related to these articles, on April 29 Genome Canada put out a call to celebrate “DNA Day 2014”, marking the historic discovery by Drs. James Watson and Francis Crick in April, 1953 of DNA’s double helix and how living organisms pass genetic instructions from generation to generation. This discovery eventually enabled later researchers to understand the genetic code and essentially ushered in the era of genomics. “DNA Day” 2014 will also mark another important accomplishment, celebrating the completion of the Human Genome Project in April, 2003.

While genomics is still considered a relatively young science, Genome Canada will recognize its impact on the broader bio-economy, by once again hosting Genomics: the Power and the Promise event. Taking place November 24 to 26 at the Ottawa Convention Centre, the event hopes to build upon the last highly successful conference held two years ago, by bringing together world renowned genomics experts and visionaries from academia and industry. The theme for this year’s conference will be “Genomics and the Environment” and will explore ways genomics can help leverage Canada’s traditional resource sectors. It will also showcase how far we’ve come in our understanding of genomics, expanding its applications into areas beyond human health. Registration for the event is already open, and you can view program details and register at http:// powerandpromise.event.com/2014.

On the business side we spotlight the rise in strategic funds and its impact on the venture capital landscape. We’ve included several articles in this issue on access to capital in Canada, focusing on the rise in strategic funds and innovative venture funds.

This ties in nicely to another big industry event you should circle on your calendars.

Bloom Burton & Co. is hosting its third annual Healthcare Investor Conference on June 17 to 18 in Toronto. The event will attract Canadian, U.S. and European investors who are interested in the latest developments in Canadian healthcare companies, and includes both educational and networking components. The conference will feature a Pre-Venture Symposium to showcase Canada’s most promising pre-venture companies in the healthcare sector on day one, with day two focusing on Canada’s publicly-traded and venture-backed private companies.

And before you delve into the pages of this issue, we want to let you know that we’ve revamped our website once again, to make your experience with us more interactive and informative.

Check out our new look at www.biotechnologyfocus.ca. And if you haven’t already done so, follow us on twitter.com/biotechfocus linkedin.com/company/biotechnology-focus google.com/+biotechnologyfocuscanada facebook.com/biotechnologyfocus

4 BIOTECHNOLOGY FOCUS April/May 2014

Terri Pavelic Shawn Lawrence

STAFF WRITER

Daniela Fisher

CONTRIBUTING WRITERS

Brad Popovich

Cédric Bissons

Katherine Bonter

Luc Marengere

Robin Sundstrom

Tania Bubela

National Account Manager GRAPHIC DESIGNER CONTROLLER MARKETING MANAGER

Marcello Sukhdeo Elena Pankova John R. Jones Mary Malofy

CIRCULATION DIRECTOR James Watson circulation@promotive.net Tel: 705-812-0611

EDITORIAL ADVISORY BOARD Celine Bak, Analytica Advisors; Rob Henderson, BioTalent Canada; Najla Guthrie, KGK Synergize; Pierre Bourassa, IRAP, Montréal; Murray McLaughlin, Sustainable Chemistry Alliance; Carol Reynolds, AdFarm; Ulli Krull, UTM; John Kelly, KeliRo Company Inc.; Peter Pekos, Dalton Pharma Services; Brad Thompson, Oncolytics; Darrell Ethell, CanReg; John Hylton, John H. Hylton & Associates; Robert Foldes, Viteava Pharmaceuticals Inc.; Randal R.Goodfellow, P.Ag., Senior Vice President, Corporate Relations, Ensyn; Bob H. Sotiriadis, Robic LLP; Dale Patterson, Genome Canada; Darcy Pawlik, Syngenta Seeds Canada Inc; Gail Garland, OBIO; Barry Gee, CDRD; Bonnie Kuehl, Scientific Insights Consulting Group Inc.; Raphael Hofstein, MaRS Innovation Biotechnology Focus is published 10 times per year by Promotive Communications Inc. 24-4 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 dept – 24-4 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.

If you would like to order hard copy or electronic reprints of articles, contact Sandra Service 905-727-3875 x221 reprints@promotive.net

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R & D NEWS Personalized medicine: CQDM and CIHR partner to enable drug discovery in Canada

Clinical Trials & Patents Phase 3 results from Bristol-Myers Squibb’s (Mississauag, ON) global HALLMARKDual study were presented at the 49th annual meeting of the European Association for the Study of the Liver (EASL) in London, UK. The study focused on investigating the all-oral, interferon- and ribavirin-free regimen of daclatasvir (DCV), a NS5A inhibitor, and asunaprevir (ASV), a NS3 inhibitor, among genotype 1b hepatitis C virus (HCV) infected patients.

The results showed that the 24-week regimen achieved an overall sustained virologic response (a functional cure) 12 weeks after the end of treatment (SVR12) among treatmentnaïve (90%), peginterferon/ribavirin nonresponder (82%), and peginterferon/ribavirin ineligible/intolerant (82%) patients, including cirrhotic and non-cirrhotic patients (84% and 85%). In the study the DCV plus ASV regimen was generally well tolerated. The Phase 3 multinational clinical trial included 116 sites in 18 countries, including countries that have a high prevalence of GT1b such as Korea and Taiwan.

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From left to right, Jane Aubin, Chief Scientific Officer and Vice-President, Research and Knowledge Translation at the Canadian Institutes of Health Research (CIHR); Diane Gosselin, President and CEO of CQDM and Étienne Richer, Assistant Director, CIHR Institute of Genetics.

CQDM and CIHR, along with five of its institutes, have partnered in a new collaborative funding program in personalized medicine across Canada. The new pilot initiative was launched at BioTransfer2014 in Toronto by president and CEO of CQDM Diane Gosselin, and chief scientific officer and vice-president, Research and Knowledge Translation at the Canadian Institutes of Health Research (CIHR) Jane Aubin.

The novelty of the new program lies in the combination of the respective strengths of the partners: academic research for CIHR and translational industrial research for CQDM. It will offer opportunities to small and medium enterprises (SMEs) to collaborate with academia towards developing new cutting-edge technologies, computational tools and devices in personalized medicine that will aid biopharmaceutical research and lead to healthcare innovations.

Successful applicants will also benefit from CQDM’s mentorship program which brings industry support and expertise to the projects and helps better align the research with the needs of the pharmaceutical industry.

“CIHR is pleased to be partnering on this highly innovative public-private funding program with CQDM to address the most urgent biopharmaceutical research needs resulting from the adoption of personalized medicine approaches,” said Aubin.

“By focusing the program on the invention and development of the next-generation of technologies, computational tools and devices, we will be enabling Canada to translate basic research advancements 6 BIOTECHNOLOGY FOCUS April/May 2014

into therapeutic benefits.”

“We are delighted to collaborate with CIHR to launch our first national funding initiative and benefit from the footprint of CIHR in personalized medicine. This pilot program will allow us to fund fruitful collaborations between academia and SMEs across Canada for the development of innovative tools and technologies, which will in turn accelerate the development of new and more effective drugs,” said Gosselin.

The two sides hope that the success of this first initiative will lead to collaborations of greater scope between the two sides in the area of drug discovery. CQDM and CIHR will fund research projects focused on the invention and development of next-generation of technologies, computational tools and devices in the research areas like cancer, infection and immunity and neurodegeneration affecting cognition.

Entitled the CQDM/CIHR Collaborative Funding Program in Personalized Medicine to Accelerate Drug Discovery, this program extends to scientific and technical fields directly related to biopharmaceutical R&D and all disciplines that could provide enabling technologies and devices for biopharmaceutical research.

Deadline for letters of intent is June 27, 2014. For more information on the program, please visit CQDM’s website at: www. cqdm.org.

To see this story online visit http://biotechnologyfocus.ca/ personalized-medicine-cqdm-andcihr-partner-to-enable-drug-discoveryin-canada/

Helix BioPharma Corp. (Aurora, ON) has submitted an Investigational New Drug (IND) application to the U.S. Food and Drug Administration (FDA) to initiate a Phase 1 clinical trial with L-DOS47. L-DOS47 is Helix’s first immunoconjugate-based drug candidate in development based upon the company’s DOS47 technology, which is designed to modify the microenvironmental conditions of cancer cells in a manner that leads to their destruction. LDOS47 is currently being clinically evaluated as a treatment for certain patients with nonsmall cell lung cancer. The study is entitled: “A Phase 1, Open Label, Dose Escalation Study of Immunoconjugate L-DOS47 in Combination with Standard Doublet Therapy of Pemetrexed/Carboplatin in Patients with Stage IV (TNM M1a and M1b) Recurrent or Metastatic Non-Squamous Non-Small Cell Lung Cancer (NSCLC).”

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n ProMetic Life Sciences Inc. (Laval, QC) has shared new pre-clinical data indicating that its diabetes and kidney disease drug PBI-4050 was able to reduce oxidative stress markers as well as inflammatory and profibrotic cytokines in animal models designed to emulate chronic kidney disease (CKD) and diabetic kidney disease (DKD). All of these mediators play a major role in the evolution of CKD and DKD, and some can be monitored in blood and in urine said Dr. John Moran, ProMetic’s chief medical officer. In animal models designed to reproduce long term complications related to human Type II diabetes, PBI4050 brought blood glucose levels back into the normal range. Ultimately the mice or rats treated with PBI-4050 displayed a significant improvement of their renal function and a significant reduction of fibrosis in their kidneys compared to the non-treated rats.

For more R&D news visit http://biotechnologyfocus.ca/ category/topics/science/

R & D NEwS GLOBE Association names Solegear Bioplastics ‘Polysole’ product as best emerging technology

Solegear Bioplastics, a company developing plant-based plastics and packaging has been recognized by the GLOBE Foundation as the 2014 winner of the Best Emerging Technology Award.

The award was given to Solegear for its product Polysole®, a non-toxic and biobased plastic that has the ability to break down into soil and water vapour in an industrial compost environment at the end of its useful life. The Vancouver-based company, engineers, produces and distributes highperformance bioplastics made from rapidly renewable resources.

“We are continuously faced with seemingly unfixable environmental challenges that give call for new innovative solutions.

Solegear has made incredibly valuable progress in the advancement of bioplastic technologies that have provided new sustainable solutions for businesses.” said Dr. John Wiebe, CEO of the GLOBE Foundation.

“It is our honor at the GLOBE Foundation to recognize Solegear for their diligent efforts in creating a more sustainable future”.

“We are humbled and honored to be recognized for this award by the GLOBE Foundation. Globe’s ability to shine a light on the

intersection of business and the environment validates the opportunity that Solegear has uncovered, and is commercializing,” said Toby Reid, Solegear’s founder and CEO. “You don’t have to look too far today to know that we have to reinvent the way that we make and dispose of products made from plastic and I’m incredibly proud of the work that the Solegear team has performed to date in meeting this objective. By providing turnkey options that not only include bioplastic technologies, but innovative manufacturing and end-of-life solutions, we’re seeing continued growing interest as we bridge the gap between cleantech innovation and significant market adoption.”

In addition to the GLOBE Award, Solegear has also recently been named to both Rocket Builders’ Cleantech Ready to Rocket and BCBusiness Innovator of the Year Top 10 list of companies best positioned for growth.

To see this story online visit http://biotechnologyfocus.ca/globeassociation-names-solegear-bioplasticspolysole-as-best-emerging-technology/

CELEBRATING

5YEARS

Of Delivering High Impact Results

Ontario Bioscience Innovation Organization Taking thought leadership into action

OBIO RESPONDS TO INDUSTRY NEEDS: Capital Access, Innovation Adoption and Interconnectivity initiatives.

OBIO REPRESENTS A POWERFUL AND MOTIVATED RESOURCE: Our member companies, partners and sponsors.

TOGETHER WE ARE BUILDING AN ONTARIO that will lead the way in providing health technology, products and services to the international marketplace. Join today and experience the benefits of membership.

www.obio.ca April/May 2014 BIOTECHNOLOGY FOCUS 7

R & D NEWS New Canada-Israel research partnership to identify molecular drivers of metastatic pancreatic cancer

A significant, multi-year commitment by Sylvia M. G. Soyka, director, and the board of trustees of the SMGS Family Foundation to the Canadian Friends of the Hebrew University (CFHU) will be used to launch an international research project in pancreatic cancer to identify molecular drivers associated with metastasis.

Researchers at the Institute for Medical Research Israel-Canada (IMRIC) at the Hebrew University of Jerusalem and Sheba Medical Center in Israel and at the Ontario Institute for Cancer Research (OICR) in Canada will work together to uncover the molecular landscape of pancreatic cancer and the underlying pathways that are driving the disease.

Pancreatic cancer remains the most deadly common solid tumour in developed countries. Approximately 80 per

cent of patients present with advanced disease, are not eligible for surgery and have extremely poor prognosis. These advanced forms of pancreatic cancer have generally been understudied. Advances in combating this aggressive disease require detailed molecular analysis of tumours to uncover the pathways driving tumour growth and dissemination. The collaborative effort will seek to discover new biomarkers for detection and diagnostics and potentially to find new targeted therapies that will improve patient outcomes.

Researchers based in Toronto and in Israel will continue to identify incident cases of pancreatic cancer and build a powerful research infrastructure. They will focus on augmenting their existing large bank of biospecimens and data from patients with early stage tumours by collecting material from patients with more advanced disease.

OICR says it will use state-of-the-art technologies for high-throughput molecular analysis of tumours (e.g., DNA, RNA and protein activity), and its platforms will provide the support for extracting molecular data. Researchers at IMRIC will use the collected patient specimens to conduct detailed molecular analyses and experimental studies.

“This is an exciting opportunity to bring together world-class researchers from Canada and Israel, all of whom are experts in the field of pancreatic cancer research,”

said Dr. Tom Hudson, president and scientific director of OICR. “This partnership could lead to important new insights into one of the most deadly cancers.”

“Sylvia Soyka’s philanthropic dedication and determination to make a difference in the area of pancreatic cancer research serves as a role model and inspiration to those of us who are fortunate enough to be touched by her vision and focus. The SMGS Family Foundation has acted to make Sylvia’s vision a reality,” said Merle Goldman, executive vice president, CFHU. “Pancreatic cancer remains the most deadly type of solid tumour in the developed world, with overall survival of less than five per cent,” said Dr. Steven Gallinger, senior investigator at the Lunenfeld-Tanenbaum Research Institute of Mount Sinai Hospital and director of the Pancreatic Cancer Research Initiative at OICR. “By better understanding pancreatic cancer at a molecular level, we can develop the critical new personalized tools needed to detect, diagnose and treat pancreatic tumours sooner, and potentially improve the lives of those diagnosed with pancreatic cancer in the future.”

To see this story online visit http//biotechnologyfocus.ca/new-canadaisrael-research-partnership-to-identifymolecular-drivers-of-metastaticpancreatic-cancer/

Drug candidates might offer safer treatment for cancer pain and brain cancer-related epilepsy Fluorinov Pharma, an emerging Ontariobased drug development company, has developed three structurally distinct candidate drugs that selectively target painspecific nerve sodium channels (Nav 1.8 and Nav 1.7), intended to treat cancer pain and brain cancer-related epilepsy.

Fluorinov CSO Malik Slassi says the candidate drugs have shown an excellent preliminary safety profile, improved treatment of pain and epilepsy, and are expected to have fewer sedative side effects compared to the current standard of treatment.

Fluorinov developed the drugs in partnership with the National Institutes of Health (NIH) in the U.S. with funding through the Ontario Institute for Cancer Research (OICR).

Existing pain drugs can have serious side effects including nausea, fatigue, dizziness and in some instances, risk of addiction. Recent scientific breakthroughs have identified pain-specific sodium ion channels that could be targeted by new drugs to avoid unwanted 8 BIOTECHNOLOGY FOCUS April/May 2014

side effects on the central nervous system.

“OICR and its partners are focused on translating important cancer discoveries from the laboratory bench to patients with cancer. Fluorinov’s compound-centric drug discovery platform and proprietary breakthrough fluorine technology modulate validated targets ranging from cancer epigenetics to ion channels. This strategy unlocks the full therapeutic potential by optimizing the drug-like properties of innovative medicines” stated Dr. Tom Hudson, president and scientific director of OICR.

“The ion channel development program strived to identify novel drugs superior to gabapentin but without sedative side effects” remarked Dr. Slassi. Dr. Slassi added that these three candidate compounds withstood attrition in rigorous in vivo preclinical efficacy and safety experiments.

“As the mechanisms of action were unknown, it was gratifying for the team to see diverse and novel chemistry converge upon, and further validate these important targets for patients with cancer and pain,” he said.

Fluorinov is currently working with the Fight Against Cancer Innovation Trust (FACIT) to explore partnerships with investors and pharmaceutical companies, and also pathways for clinical development.

To see this story online visit http://biotechnologyfocus.ca/drugcandidates-might-offer-safer-treatmentfor-cancer-pain-and-brain-cancer-relatedepilepsy/

R & D NEWS Canada’s first top 10 watch list of game-changing health technologies released

Three new cancer drug treatments, five medical devices, and two medical procedures have been selected as Canada’s top 10 new and emerging health technologies by a blue-ribbon panel of experts. The first Top 10 New and Emerging Health Technology Watch List was publicly released at the 2014 CADTH Symposium.

Over the past year, the Canadian Network for Environmental Scanning in Health (CNESH) has been working to identify which technologies hold the greatest promise to improve the lives of patients and transform the delivery of health care. The Network’s selections include a broad range of medical innovations such as the replacement of stainless steel with copper in intensive care settings, biologic medicines, stents to treat heart conditions, retinal implants, and a treatment for children with chronic ear infections.

“Every day, there is more and more health innovation coming to market, and making decisions about whether to invest in these new technologies is fraught with challenges and uncertainty,” says professor Ron Goeree, chair of CNESH and director of the Programs for Assessment of Technology in Health (PATH) Research Institute at McMaster University. “By looking closely at the evidence and creating the Top 10 Watch List, we hope to identify potential game changers and help health care decision-makers plan for the future.”

The term “health technologies” refers to medical and dental devices, diagnostic tests, and medical, surgical, or dental procedures, as well as drugs

— anything that can be described as a “health intervention.” Starting with over 75 submissions it received from across Canada and around the world, the CNESH panel of experts assessed each submission’s potential impact on clinical effectiveness, patient survival, quality of life, safety, or costs to the health care system.

The Top 10 New and Emerging Health Technology Watch List 2014 are: • Antimicrobial copper surfaces to reduce hospital-acquired infections in intensive care settings • Ex vivo lung perfusion device to preserve and assess donor lungs prior to transplant • Ipilimumab for unresectable or metastatic melanoma • Mitral valve clip for degenerative mitral regurgitation • Obinutuzumab (plus chlorambucil) for newly diagnosed chronic lymphocytic leukemia • Remote ischemic conditioning (RIC) device to prevent cardiac ischemia and infarction in patients undergoing cardiac surgery • Retinal implant to improve vision in patients with retinitis pigmentosa • Self-expanding, drug-coated stent for the treatment of peripheral arterial disease • Trastuzumab emtansine (T-DM1) for HER2-positive metastatic breast cancer • Tympanostomy tube insertion delivery system for children with chronic ear infections A backgrounder on each of these technologies can be found at http://www. cadth.ca/en/products/environmental-scanning/overview/cnesh/ cnesh-press-release. Each of the 10 summaries features key facts about the new technology, potential advantages, how it could change current practice, and who might benefit.

To see this story online visit http://biotechnologyfocus.ca/ canadas-first-top-10-watch-list-ofgame-changing-health-technologiesreleased/

NEOMED adds new drug discovery project to its pipeline Quebec’s NEOMED says it has entered into a collaboration with U.S. based Epigenetix Inc. on a new oncology drug discovery project.

The project will include the development of novel inhibitors of Brd4, a protein that functions as an epigenetic modulator and whose potential in the treatment of cancer is being explored. The initial stages of drug discovery will involve IntelliSynRD, a Montreal-based medicinal chemistry company located in the NEOMED Institute.

“This is a very important project for NEOMED which we will undertake in collaboration with our partners. We aim to deliver a candidate drug within the next six to eight months. We are confident that we can achieve this together thanks to our team of scientists and the support of our network at the NEOMED Institute, and elsewhere in Canada.” said Dr. Max Fehlmann, president and CEO of NEOMED and the NEOMED Institute.

Joe Collard, president and CEO of Epigenetix Inc added that the project is not just about the development of new inhibitors of Brd4, but also confirming the importance of epigenetics in the treatment of various forms of cancer. Epigenetix Inc. already has a strong small molecule medicinal chemistry alliance with IntelliSynRD in Montreal and has several additional collaborative arrangements.

Founded in 2011 by Collard and Prof. Claes Wahlestedt, Epigenetix is a platform drug discovery company focused on the field of epigenetics and currently pursues a range of projects in different therapeutic areas. This field centers on changes in gene activities that are not caused by hereditary changes in the DNA sequence.

“NEOMED’s expertise and its network will quickly move this project forward. The fact that our preferred provider of medicinal chemistry, IntelliSynRD, is part of the NEOMED Institute is an important advantage for the success of the project,” Collard said.

Recent discoveries have shown that changes in the spatial shape of DNA can be as important as those in its sequence to explain the causes of certain diseases, in particular cancers. Although the DNA sequence cannot be easily modified, the spatial form of the DNA molecule is controlled by a family of enzymes that can be targeted with new classes of drugs. The ambition of epigenetics approaches is to restore the normal functions, especially in cancer cells.

To see this story online visit http://biotechnologyfocus.ca/neomed-addsnew-drug-discovery-project-to-its-pipeline/ April/May 2014 BIOTECHNOLOGY FOCUS 9

BUSINESS cORNER Valeant Pharmaceuticals teams with Ackman’s Pershing in takeover bid of Allergan Valeant Pharmaceuticals International, Inc. says it has submitted a merger proposal to the board of directors of Botox-maker Allergan, Inc. in a US$44.4 billion bid to take over the company.

The Laval, Québec-based Valeant is teaming up with Pershing Square in the proposed deal. The terms of the merger would see Allergan shareholders get $48.3 per share in cash and 0.83 shares of Valeant, with shareholders able to choose a mix of cash and shares. Allergan shareholders will own 43 per cent of the combined company and thereby continue to participate in the combined company. Pershing Square, Allergan’s largest shareholder with a 9.7 per cent stake in Allergan, has agreed to elect only stock consideration in the transaction and intends to remain a significant long-term shareholder of the combined company.

The move is the latest in a series of deals that includes Valeant’s US$8.7 billion takeover of Bausch & Lomb last year, with the company setting its sights on becoming one of the top five drug makers in the world.

The proposed merger agreement

that Valeant delivered to Allergan will be filed with the Securities and Exchange Commission.

Should the deal go through, it would mark the biggest takeover in Canadian history.

Barclays Plc and Royal Bank of Canada’s RBC Capital Markets unit are advising Valeant on the transaction, as well as providing US$15.5 billion of debt financing.

To see this story online visit http://biotechnologyfocus.ca/valeantpharmaceuticals-teams-with-ackmanspershing-in-takeover-bid-of-allergan/

Stem cell Therapeutics graduates to the Toronto Stock Exchange Immuno-oncology company Stem Cell Therapeutics Corp. is now trading on the Toronto Stock Exchange (TSX). Additionally the company’s common shares will continue to trade under the trading symbol “SSS” and its common shares have been delisted from the TSX Venture Exchange.

“Graduation to the TSX is one of several important corporate milestones we aim to achieve this year as we continue to grow our company,” commented Dr. Niclas Stiernholm, CEO of SCT. “Listing on the TSX is expected to provide the company with improved access to the capital markets and greater recognition among healthcare investors.”

The company also announced that its board of directors has granted options to purchase 7,923,868 common shares of the company to its executive officers. The options were issued at an exercise price of $0.345 per share for a ten-year term. The grant of options is subject to acceptance by the TSX Venture Exchange. SCT has approximately 344 million shares outstanding on a fully diluted basis.

To see this story online visit http://biotechnologyfocus.ca/stem-celltherapeutics-graduates-to-the-torontostock-exchange/

Novadaq Technologies to acquire Aimago SA

Novadaq® Technologies Inc. has entered into an agreement to acquire all outstanding shares of privately held medical imaging company Aimago SA. Aimago was founded in 2008 as a spin off from Ecole Polytechnique Federale de Lausanne, a Switzerland based academic and research institution. Aimago’s lead product, the EasyLDI Perfusion Camera, incorporates a high-speed, full field laser 10 BIOTECHNOLOGY FOCUS April/May 2014

Doppler technology. The design of the device is tablet inspired, and is capable of “point-and-shoot” perfusion imaging at the surface of the skin, without the need to administer any imaging agent to patients.

The EasyLDI Perfusion Camera is FDA 510(k) cleared and CE marked and Aimago has installed the first four commercial systems at sites in Europe.

According to Novadaq president and CEO Dr. Arun Menawat, the product will complement Novadaq’s own SPY® technology which provides detailed quantitative vascular and micro-circulation blood flow and perfusion assessment capabilities, typically during treatments in operating rooms and wound care clinics.

“The acquisition of Aimago fits with our strategy to expand our product and patent portfolios, and our clinical ecosystem, by providing relevant imaging solutions for

use at multiple points throughout the patient care continuum,” stated Menawat. He added, “EasyLDI is already FDA cleared and as such, we expect to start post-marketing studies in patients with chronic non-healing wounds in the U.S. in the third quarter of 2014.”

Terms of the agreement will see Novadaq pay Aimago shareholders, an upfront US$10 million, which includes US$6.5 million in cash, plus US$3.5 million in Novadaq stock. If certain regulatory and commercial milestones are achieved in the future, the company may also pay contingent earn out considerations totaling an additional US$2.4 million. Upon closing, Aimago will become a fully owned Novadaq subsidiary.

To see this story online visit http://biotechnologyfocus.ca/novadaqtechnologies-to-acquire-aimago-sa/

BUSINESS CORNER Bloom Burton & Co. launches new website and blog Bloom Burton & Co., a firm working exclusively within the healthcare investment industry, announces the launch of its new corporate website and blog at www. bloomburton.com.

The Bloom Burton team has worked exclusively within the healthcare investment industry for more than a decade as a facilitator of institutional investment in the healthcare sector, as well as working with healthcare companies and organizations seeking advice or capital.

Brian Bloom, president of the company, said, “We are excited to unveil our new website, which describes and illustrates, including through detailed case studies, our full suite of services that assist our clients in pursuing the appropriate monetizing events. Our firm offers services that include capital raising, M&A advisory, equity research, scientific, medical and strategic consulting, as well as opportunities for investors to participate in healthcare investing through equity and debt funds, which are sub-advised by one of our affiliated companies.”

Coupled with the new website, the company also announced the launch of the Bloom Burton Cross-Border Biotech Blog.

The blog will feature commentary and opinions from executives of leading companies in the biotechnology and healthcare sector, specialist institutional investors and individuals who help shape the healthcare industry in Canada and globally.

Along with the new website and blog, the firm confirmed the dates of its third annual Bloom Burton & Co. Healthcare Investor Conference (BBHIC). The conference will take place at the Toronto Board of Trade on June 17 to 18, 2014.

The event attracts Canadian, U.S. and international investors who are interested in the latest developments from Canadian

healthcare companies. Attendees will have the opportunity to obtain corporate updates from public and private companies, while institutional investors will be able to schedule private, one-on-one meetings with companies. The event will include a series of panel discussions, keynote speakers and networking events at the conference.

On June 17, Bloom Burton will host a special event, the Bloom Burton & Co. PreVenture Symposium to showcase approximately a dozen of Canada’s most promising pre-venture companies in the healthcare sector. The Bloom Burton Healthcare Investor Conference takes place the following day on June 18 to showcase 36 of Canada’s premier publicly-traded and venture-backed private companies.

Registration for all events is complimentary for professional investors, pharmaceutical business development executives and members of the media. The conference agenda, company presentation list and registration details can be found at www. bloomburton.com/conference.

To see this story online visit http://biotechnologyfocus.ca/bloom-burton-co-launches-new-website-and-blog/

Dealmakers Specialty pharmaceutical company Medicure Inc. (Winnipeg, MB) has entered into an arrangement with Knight Therapeutics Inc. that will see Knight Therapeutics provide advisory services to help advance Medicure’s U.S. specialty pharmaceutical business and corporate development initiatives. Knight Therapeutics Inc., headquartered in Montréal, QC, is a specialty pharmaceutical company focused on acquiring or in-licensing innovative pharmaceutical products for the Canadian and world markets.

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n BC-biotech company Xenon Pharmaceuticals Inc. is teaming up with Genentech to discover and validate new therapeutic targets and mechanisms for treating pain. The collaboration leverages Xenon’s Extreme Genetics discovery platform to focus on rare phenotypes where individuals have an inability to perceive pain or where individuals have non-precipitated spontaneous severe pain explains Dr. Simon Pimstone, president and CEO of Xenon. It’s not the first time that Xenon has teamed up with Genentech. The two sides previously formed a strategic alliance in 2012 for the discovery and development of compounds and companion diagnostics for the potential treatment of pain.

Pursuant to the terms of the new agreement, both Xenon and Genentech will own the intel-

lectual property arising out of the collaboration.

Xenon has also granted Genentech a time-limited, exclusive right of negotiation on a targetby-target basis to form joint drug discovery collaborations. Financial terms of the agreement were not disclosed.

SQI Diagnostics Inc. (Toronto, ON) has expanded its previously announced product development relationship with an unnamed global pharmaceutical customer. As part of the agreement, SQI says it will develop a custom multiplex test, a 21-plex protein microarray, to support the pharmaceutical company’s clinical drug development activities. The agreement for the second phase of the project includes both payment for services and for the consumables used during development and sample testing. As part of the first phase of the project, SQI completed the development of a series of multiplex anti-drug antibodies for the customer to detect and measure immunogenic responses to the drug during its pre-clinical development .

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Amorfix Life Sciences (Mississauga, ON) has entered into a collaboration with Trellis Bioscience (San Fransisco, CA) to develop antibodies against misfolded CD38 protein as

a treatment for haematological malignancies including leukemia and lymphoma. CD38 is a protein that is highly expressed on the surface of a variety of white blood cells and has been implicated in a number of hematologic malignancies including multiple myeloma, chronic lymphocytic leukemia, B-cell lymphoma, acute lymphoblastic leukemia, acute myeloid leukemia, follicular lymphoma and mantle cell lymphoma. Antibodies that bind to misfolded CD38 have the potential to only kill tumour cells, and not normal cells, through a variety of ways including the recruitment of the body’s immune system for complement-dependent cytotoxicity (CDC), antibody-dependent cellmediated cytotoxicity (ADCC), induced cell death (apoptosis) as well as by blocking or modulating CD38 enzymatic activity. The two sides hope that together, their technologies will enable the companies to isolate and develop fully human therapeutic antibodies that will target only cancer cells and not healthy ones.

Under the terms of the collaboration, Amorfix will have an exclusive option to develop any resulting antibodies.

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For more Business Corner news visit http://biotechnologyfocus.ca/category/ topics/business/ April/May 2014 BIOTECHNOLOGY FOCUS 11

By: Dr. Brad popovich, CSO, Genome British Columbia

TRANSLATIONAL RESEARch

ENABLING TECHNOLOGIES: Enabling better diagnosis and treatments for cancer patients

“THE BIG C” Cancer is the leading cause of death in Canada: just over two in five Canadians will develop some form of cancer in their lifetime, and one in four Canadians will die from it. Last year alone some 187,600 Canadians were diagnosed with cancer, and there were 75,500 cancer deaths. Canada ranks 12th in the world for cancer frequency.

More than half of new cancer cases diagnosed this year will be lung, breast, colorectal and prostate cancer. Lung cancer is by far the leading cause of cancer death, leading to more cancer deaths among Canadians than the other three cancers combined. Overall cancer rates are slowly dropping, but the numbers are still frightening. There’s a reason why it’s known as “The Big C”.

However there is hope on the horizon. Genomics, already showing promise in other fields of medicine, is now being applied in cancer diagnosis, treatment and care.

Personalized cancer treatment In the not so distant future, the genomes of cancer tumours will routinely be sequenced as part of the clinical evaluation of cancer patients, helping usher in the much-anticipated era of ‘personalized’ treatment. In certain instances of cancer such as hereditary breast cancer, cancer cell sequencing already occurs. Oncologists use this information to tailor treatments that will respond to the unique makeup of the patient’s tumour genes.

The technologies driving the genomic breakthroughs of the last 15 years are making genomics a powerful, integral and necessary part of cancer screening and treatment. Canada is helping to lead the way in developing these technologies, with home-grown innovators who are poised to take the world by storm.

12 BIOTECHNOLOGY FOCUS April/May 2014

Necessity is the mother of entrepreneurship In 2002, a technology development platform funded by Genome BC and Genome Canada was created in BC to provide engineering support to the local life sciences research community along with world-class prototyping facilities and resources for advancing innovative biomedical devices towards commercialization. In 2007, with support from Western Economic Diversification Canada, Genome BC secured funding for advanced prototyping facilities and training centres in BC. The funding established new facilities at the UVicGenome BC Proteomics Centre and the British Columbia Institute of Technology. It also launched the Joint Engineering Centre, a stateof-the-art prototyping centre at the BC Cancer Agency.

The close proximity of the teams’ engineers and trainees to researchers and clinicians in the local research community is one of the keys of the platform’s success. Through close interaction and networking, researchers have been able to identify ways to solve problems, improve efficiencies and invent new devices.

Platform members have created dozens of technologies including devices for high-throughput genome analysis with the BC Cancer Agency’s Michael Smith Genome Sciences Centre, the design of devices for radiotherapy and clinical genetics at the BC Cancer Agency, anesthesiology devices for Vancouver General Hospital and work flow improvements for the BC Centre for Disease Control, among many other innovative projects.

Enabling non-invasive cancer monitoring One of the major successes of Genome BC’s Technology Development platform is Boreal Genomics, a spin-off company started in 2007 by co-director and UBC researcher Dr. Andre Marziali and colleagues. In 2004 Dr. Marziali co-invented a patented technol-

Translational Research UBC researcher Dr. Andre Marziali ogy to purify nucleic acids. This technology formed the basis of Boreal to further commercialize high-performance instruments for DNA and RNA purification.

The company’s newest product, the Boreal OnTarget™ platform, allows researchers to detect up to 100 mutations across multiple genes in parallel and sequence both known rare somatic mutations, enabling non-invasive monitoring of cancer and improving the effectiveness of personalized treatments. The OnTarget platform enables multiple detection of these mutations from circulating tumour DNA in plasma.

The initial commercial application for the OnTarget system is for colorectal cancer surveillance but Boreal has also developed applications in detection of pancreatic, ovarian and lung cancers.

The market for colorectal monitoring in North America is over two million tests annually, with similar population based numbers seen internationally. Factor in other cancers to the screening panel and the numbers are significant. The brilliance of the technology, however, is its potential to detect all cancers at even the earliest stages, and all with a simple blood test.

With a recent $18 million (USD) injection from a Series C financing round, Boreal has the ability to improve cancer patient care through blood-based tests for non-invasive tumour profiling. It aims to further develop its cancer-detection platform from post-surgical surveillance for circulating cancer DNA into a screening tool that can be applied across entire populations, eventually hoping to decrease the global incidence of late-stage tumours. With clinical applications underway and cancer detection data on the verge of publication this technology is quickly becoming the “holy grail” of cancer treatment.

The recent round of funding will also be used to expand the company’s commercial operations in the translational research market and launch clinical applications for non-invasive genomic profiling and monitoring of cancer.

MAGIC is for real In addition to novel innovations like OnTarget, some cancer diagnosis systems have already been advanced significantly through DNA sequencing technologies for cancer. One of the best examples of this can be seen in work being done by the Medulloblastoma Advanced Genomics International Consortium (MAGIC). In partnership with clinicians at The Hospital for Sick Children (SickKids) in Ontario and 46 cancer centres around the world, scientists at the BC Cancer Agency’s Michael Smith Genome Sciences Centre (GSC) are obtaining a DNA-level understanding of medulloblastoma, the most common form of childhood cancer.

The children who survive the aggressive and debilitating treatments must often then cope with a host of side-effects, such as learning challenges and physical disabilities. There is also a major challenge in deciding what additional treatment to go with to avoid recurrence knowing that radiation treatment leads to permanent cognitive impairment.

In essence, saving the child’s life is an important initial victory, but also the start of life-long challenges for the child, their family and the health care system. Studies indicate that children are often overtreated because presently there is no way to predict which patients

need which additional therapies such as radiation and chemo. If there were a test that could predict which therapies are needed to prevent recurrence of the tumour, these kids could be spared complications by reducing the types and quantities of treatments they receive. At the same time, children with a poor prognosis are often subjected to painful treatments that may in fact, be futile. The tricky part is to identify which children are being over-treated and could be spared some of the side effects of treatment.

Sequence, Stratify, Save For the past few years researchers on the MAGIC project at the GSC have conducted RNA, micro RNA and DNA sequencing for over 1,000 tissue samples obtained from children around the world who have had medulloblastoma. Armed with this analysis the MAGIC team is basing its work around the understanding that medulloblastoma can be stratified into four distinct subgroups, each of which has a different prognosis when treated with chemotherapy, radiation and drug therapy. The team has managed to determine that two of the subgroups, simply named Groups 3 and 4 have the worst prognosis while the other two Groups, 1 and 2, have a generally good prognosis and don’t require radiation but can be treated with surgery and chemotherapy thus minimizing the lifelong cognitive impacts caused by radiation.

The team’s research has focused on the molecular makeup of medulloblastoma cancer, specifically the identification of relevant genomic changes. The team has also discovered somatic copy number aberrations in each of the four subgroups. For instance, in Group 4 a gene associated with Parkinson’s disease is duplicated and in Group 3 another gene is translocated. These events are significant, and scientists’ understanding of them offers potential treatment targets for patients classified in those groups.

To identify subgroup-specific therapies, the team is concentrating on identifying subgroup-specific drug targets, especially for those two groups with the worst prognosis. Currently the MAGIC team has identified potential drug targets specific to Group 3 medulloblastoma patients – patients who are facing the worst prognosis. Tumour samples from Group 2 have also been analyzed and variations in DNA makeup identified will help with treatment as well. Tumour samples from Group 1 identified no changes in the DNA and typically have very good outcomes to treatment and a healthier prognosis. Research from the MAGIC project is transforming the way that children with medulloblastoma are treated.

A wonderful collision of worlds Significant investments in cancer genomics projects are leading to a more personalized and cost- effective approach to cancer diagnosis and treatment — and better outcomes for patients and their families.

The incredible advances in technology happening almost daily are moving from the bench to bedside to making genuinely better and more informed clinical decisions and improve patient care.

The future of cancer diagnosis and treatment is much, much brighter than it has been before. For this we can thank the brilliant innovators who are not satisfied with the status quo and push for change, the far-sighted government bodies who invest in research teams and the people behind enabling technologies who bring reality to ideas.

To see this story online visit http://biotechnologyfocus.ca/enabling-technologiesenabling-better-diagnosis-and-treatments-for-cancerpatients April/May 2014 BIOTECHNOLOGY FOCUS 13

By robin M. Sundstrom

AccESS TO cAPITAL

BIOTECH ANGELS Uppers AT WORK – onor Downers?

And Can You Change Their Meds?

T

o the joy of biotech CEOs everywhere, the NASDAQ Biotech Index rose more than 50 per cent through 2013, indicating the continuation of a powerful surge of interest after years of what can most politely be described as lacklustre performance. And it’s not just the U.S. -one Toronto merchant banker described the public biotech market right now as “frothy”, with lots of companies seeking (and many finding) capital even beyond the medical marijuana bubble. Investment bankers see opportunity.

Despite an estimated 25-to-30 per cent of the $20 billion U.S. Angels invest annually going to biotech (according to the Center for Venture Research at the University of New Hampshire), it is hard to say if the excitement is trickling down to earlier stage initiatives in Canada, or if Canadian Angels are taking note.

14 BIOTECHNOLOGY FOCUS April/May 2014

On the organizational side, among the 35 descriptions of national angel and incubator organizations listed in the widely read Backbone Magazine’s “Tech Resources in Canada” (https://www.backbonemag.com/ Tech-Resources-for-Companies-in-Canada/ angels-and-investors.aspx), only four even touch on biotech.

Of those, one (eSight Corp.) deals specifically with visual assistive devices, and another (DNA Genotek) develops products for entities requiring high-quality biological samples – very narrow targets, and hardly your traditional angel biotech investors. The third (Blue Sky Capital Corporation) has an investment in NoNO Inc., a biotech company that focuses on stroke screening and treatment, but that seems to be the limit of their involvement in the sector. The fourth has a life sciences / healthcare orientation (Medica Venture Partners), and is the only one of the group that even looks like a traditional biotech angel group. One other company, Georgian Partners, that has histori-

cally supported a couple of medical device companies and has a stable of active Angel investors, has moved entirely into big data and cloud-based business solutions.

But does this reflect the actual current activity in Canada?

The Network of Angel Organizations – Ontario (www.nao-ontario.ca), Ontario’s voice for Angel investor groups, boasts that Angel groups have made $91.6 million in investments into 169 companies. Although the website doesn’t provide timelines or sector breakdowns, a short (and highly unscientific!) poll among members produced estimates that perhaps ten per cent of those investments are in biotechnology.

Given that one of the challenges for earlystage biotech companies is actually getting access to Angel investors, it makes sense to look at events connecting Angels and capital-hungry companies.

So, among its upcoming events, MaRS does list what it boasts as “Canada’s largest healthcare venture showcase”, the MaRS HealthKick 2014 (15th of May, for those interested), but this is MaRS’s only upcoming biotech listing. The other mention is actually an annual event put on by ventureLAB in Markham, the MedEdge Summit (to be held June 19, 2014).

Randomly polling a couple of Angel groups themselves, Golden Triangle Angel Network (GTAN), based in the tech hub of southwestern Ontario, has 37 investees listed on its website. Four are healthcare-related – eSight eyewear with visual assistive devices, MyndTec Inc. creating therapies using electrical stimulation for brain and spinal cord injuries, Rna Diagnostics delivering clinical efficacy testing for cancer treatments, and Spartan BioScience focussing on DNA testing. Maple Leaf Angels, the Toronto-based angel group, has 17 investments on its website. Of these, three are healthcare oriented: well.ca is a retail operation specializing in wellness products, Spartan is described above, and ChipCare develops point-of-care diagnostic technology.

If these groups are typical, it means that somewhere between 10 and 30 per cent of Angel capital goes to healthcare-related companies, with the number likely being closer to 10 than 30. In fact, a recent Forbes article, “Biotech’s “angel” funding market” (http://www.forbes.com/sites/brucebooth/2013/12/11/crowdfunding-angels-inbiotech-or-devil-in-the-details/) indicates that Angel groups per se may not be the source of a great deal of biotech investment at all: “A quick review of the Boston market’s angel shops suggests, at the very least, that these new biotech startups aren’t working through angel investing groups…”.

And individual Angels state unequivocally

and

Access to capital that the timelines involved in most biotech and all pharma ventures, coupled with the high failure rate (estimated at more than 40 per cent), are distinctly off-putting.

So in what is arguably a tight market with a relatively small prospect of raising Angel funding, how can a Canadian biotech CEO improve the likelihood of winning Angel investment for his or her venture?

Don Stewart, CEO of PlantForm Corporation, a biosimilar drug technology platform based in Guelph, founded his company just before the bottom fell out of the market in 2008. Just surviving that time makes PlantForm a remarkable success.

Obviously, Stewart has had to be nimble from the outset, and his funding sources have ranged from his own pockets, to Angels, to governments, to foundations and to offshore groups. “We started with FFF (families, friends, and fools) and Angel funding, but because of the economic climate had to move rapidly to other sources of capital – and we developed near-term capabilities in order to win contracts that could then serve to provide capital to build our technology platform.”

PlantForm sought opportunities that matched its skill base. In 2011, it was awarded almost $300,000 to develop HIV antibodies, and a year later parlayed its expertise to win a $1.8 million US Defense contract to research and develop medical countermeasures to chemical threats. At the same time, Stewart was tireless in presenting Plantform to Angel groups, investment gatherings, and industry conferences. The reputational benefits from such accolades as being named “Innovator of the Year (2010)”, one of Canada’s top investment prospects (2010), an OCE Mind-to-Market finalist (2011), “Most Promising Technology” (2012), excellence in writing (2013), and “Industry Partner” (2014) have meant extended reach and more investor interest from a broader base of prospects. As Stewart modestly says, “It helps to show up.”

Stewart has tackled his funding issues from the cost side as well, using whatever assets were available at hand, and suggests that start-ups should look to universities for resources. “Right now, as a result of retirements and funding changes, there is a lot of lab space opening up in universities. It’s an ideal entry point.”

Although Angel investors helped to support PlantForm’s early days, Stewart says that the capital needs of most biotech companies are now impossible for Angels to meet. “Most companies need to raise more than $10 million just to get through the early phase, and this puts Angels out of the bucket except for “back-of-envelope-stage” baby companies.”

16 BIOTECHNOLOGY FOCUS April/May 2014

Nicol MacNicol, a seasoned investor and Bay Street regular as an investment advisor and portfolio manager with Caldwell Securities in Toronto, would agree. “I may not get as much of a bang, but at this point I prefer to look at later-stage companies. And better yet if they’re already public – at least I can get out. With a private company, if something goes wrong, you’re done. I don’t care if there are bigger gains in the private sector, there is also huge risk.”

However, having seen hundreds of earlystage biotech presentations and invested in several of those companies, MacNicol says, “There are a few boxes they have to tick.

They have to know the sector. They have to understand the technology well enough to be able explain it to me understandably.

They have to be reasonable in their projections and in their targets. It helps if they have a track record. I’m basically looking for people who’ve already identified their strategic investor and know who they’re marketing their company to. I’m not interested in megalomaniacs who think they can dominate a sector from a standing start.”

MacNicol may be more focused on the public markets, but his comments are echoed throughout the Angel community. This is a tough audience, but not an uninterested one. It’s merely that the risk-reward ratio doesn’t work in Angels’ favour under the current system, as even Angels who identify and invest in a successful venture can get crammed down by subsequent rounds of investment if they can’t participate in the necessary follow-ons.

It’s a structural problem. But it may be solvable.

Since September, 2013, when crowdfunding (which for equity necessarily involves Angel investors) went live in the U.S., healthcare has accounted for 37 per cent of the capital raised. There is clearly both appetite and opportunity. In Canada, Oscar Jofre, CEO of BoardSuite Corporation and co-chair of the Equity Crowdfunding Alliance of Canada ECFA Canada), reports that he is working with a group in Toronto to launch a portal for the sector. This could enable more Angels to

take smaller pieces of biotech launches – resulting in lower risk and more diversification, both key to prudent investment.

In the meantime, however, there are definitely things the average Angel investor looks for before investing in the high-risk world of biotech, and most of them are well within management’s ability to affect: • Clear communication about the technology: the explanation should be accessible and comprehensible. This sometimes means medical devices are easier to fund than new medications or therapeutic platforms; • Realistic estimates and targets: management can’t overstate, and must be sensible about its reach and prospects; • Revenues, or a short time to revenues – two-to-three years maximum. This means that drug developers will find it harder to raise Angel money, and should be prepared to look for strategic investment or paid contracts – or be well-enough positioned to bootstrap; • Clear path to an exit for investors, either through being bought by a strategic investor (so know the potential targets!) or going public; • Regular communication: be prepared to stay connected with investors.

There are also ways in which biotech companies can improve their chances of staying alive, either to enable Angel funding or to get to revenues without an Angel: • Keep costs down by using local resources, such as university labs, graduate students; • Connect with government at all levels for program monies, regional development initiatives, strategic initiatives, and conferences. IRAP, BDC, and the like can be good sources of information and resources; • Look for contract opportunities, and partner with universities and local labs to supply any additional necessary technology or skills; • Look for presentation opportunities that will support the company’s public profile and reputation. Have your deck ready to go.

The rewards in life sciences are huge, and as they converge with information technology, the sector only shows signs of continuing to grow. Angels want to be part of this growth – if biotech companies can demonstrate how they can participate profitably, Angels will be there.

To see this story online visit http//biotechnologyfocus.ca/ biotech-angels-at-work-onupper-or-downers-and-can-youchange-their-meds

Capital Markets

TVM Life Science

is leading the way with an innovative investment model By: Dr. Luc Marengere

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VM Capital Life Science (TVM) is one of a relatively small number of venture groups to have successfully raised a Fund anchored by a major strategic partner. TVM Life Science Ventures VII (TVM LSV VII) closed on March 5th, 2012 anchored by the Indianapolis-based pharmaceutical company Eli Lilly & Co (Lilly).

The successful closing of the TVM LSV VII represents a thoughtful alignment of strategies between TVM, a venture group driven by capital efficiencies, and Lilly, a pharmaceutical company looking to increase its access to differentiated innovations.

Specific to the venture industry, this more direct relationship by pharmaceutical companies with venture groups is not an impedi-

ment to venture’s entrepreneurial roots and independence but rather it provides a number of elegant solutions to challenges that have negatively impacted the venture capital industry and driven too many investors to reduce or simply eliminate their allocations to the asset class. The challenges facing venture investors, especially in life sciences, too often included (and still include) a lack of capital efficiency with high fixed costs, a lack of focus, under-estimated timelines and total capital needs, and lastly, opacity on the identity of a buyer, timing and exit enabling drivers.

TVM believes that an investment thesis focused on developing a single asset by a small team of experts with a proven ability to execute on a well-crafted development plan that incorporates thoughtful feedback from pharmaceutical therapeutic area and commercial experts (the same experts that make a recommendation to buy!) will not only improve capital efficiency but will increase the likelihood of success and build more value for all stakeholders. For TVM, the investment strategy of TVM LSV VII is a continuation of an investment strategy initiated in prior funds this time with a formal relationship with the Chorus group, a wellestablished and independent product development unit of Lilly. Chorus is recognized across the pharmaceutical industry for delivering innovative development strategies and has enjoyed tremendous success, over the last 12 years, initially solely developing assets provided by Lilly and, since March 2012, developing third-party assets supported by TVM LSV VII investments. We believe that working with Chorus adds a new dimension to our capacity to focus our capital, reduce development timelines and budgets, as well as providing transparency on exit.

While it is important to note that TVM LSV VII will dedicate a sizable portion of its capital to the areas of medical technologies, dental, late-stage pharmaceuticals, imaging and other sectors of life science, TVM LSV VII will focus its investment activities on single pharmaceutical assets licensed or assigned to project-focused companies (PFCs).

Specifically, TVM targets innovative pre-clinical and early clinical assets, whether small molecule entities or biologics, in a number of therapeutic areas including but not limited to metabolic diseases, especially type-2 diabetes and kidney diseases, oncology, CNS indications including pain, cardiovascular, men’s sexual health and inflammatory diseases. TVM LSV VII is specifically focused on investing in assets aimed at targets that April/May 2014 BIOTECHNOLOGY FOCUS 17

Capital Markets In contrast to the more standard venture capital approach of raising many subsequent rounds of financing where founders and institutions see their equity reduced dramatically and fall behind many layers of liquidation preferences, our model provides a simpler and, we believe, a more equitable value creation formula for asset sources and founders.

provide new modes of action and therapeutic pathways. TVM believes that such assets have the potential to provide a higher degree of differentiation against standard-of-care and other compounds under development.

Together with the Chorus team members, experienced managers will oversee the execution of the development plan for a specific asset thus optimizing capital efficiency and maximizing value by positioning assets for exit post reaching proof-of-concept (POC) validation in humans, a major value inflection point recognized across the industry.

Chorus works with each PFC and includes buyer relevant feedback in the development plan of every asset. Therefore, prior to every investment, TVM knows how long it will take to execute the development plan, how much it will cost, the endpoints for each asset and who is likely to buy. This model makes TVM a true “one-stop-shop” for compound sources of all sizes, even big pharmaceutical companies. Working with TVM, compound sources get all the capital needed to reach POC, a proven co-development partner in Chorus and a motivated buyer in Lilly.

There are two other important features of our model that deserve to be discussed.

These features are driven by our commitment to build value for all stakeholders within the life science industry. The first is aimed at rewarding asset sources with whom TVM LSV VII seeks to invest. We believe that founders and institutions that license their asset to a PFC should get equity that benefit from anti-dilution throughout the entire financing of the agreed upon development plan and the completion of the exit strategy after generating proof-of-concept data. In addition to the shorter timeline as one of many benefits of having an asset developed in collaboration with Chorus and knowing that a motivated buyer is waiting for proof-ofconcept data, founders and institutions have real visibility on what a return might be as their equity is preserved through to the exit and is not subject to liquidation preferences.

In contrast to the more standard venture 18 BIOTECHNOLOGY FOCUS April/May 2014

capital approach of raising many subsequent rounds of financing where founders and institutions see their equity reduced dramatically and fall behind many layers of liquidation preferences, our model provides a simpler and, we believe, a more equitable value creation formula for asset sources and founders. The second is aimed at rewarding the local service industry providers.

Through its commitment to the Canadian life science industry, PFCs and other investments made by TVM, TVM LSV VII will select and engage Canadian service providers to perform a portion of the pre-clinical and clinical studies, analytics, manufacturing and monitoring services needed to see an asset through to completion of a proof-ofconcept clinical trial. Because our individual PFCs are managed by part-time managers and have very low fixed costs, our same PFCs can then spend a substantial portion of our invested capital to perform research and development activities and accordingly stimulate the service industry.

To date, TVM LSV VII has invested in three assets and all three are being developed as PFCs in collaboration with experience managers acting on behalf of the PFC and Chorus, the drug development unit of Lilly. The first investment was Montréalbased Kaneq Biosciences Inc. The asset and the management team of Kaneq. come from Merck. This pre-clinical asset is being developed for type-2 diabetes. The second investment made by TVM LSV VII is in UK-based Ixchelsis Ltd. The asset and the management team come from Pfizer Inc. The Pfizer asset was at a clinical stage at the time of the initial investment and Ixchelsis is developing the product for a men’s sexual health indication. The more recent deal is in Montréal-based GLWL Research Inc. which is developing a small molecule which originated from Lilly for type-2 diabetes. All three of the above assets have the potential to be first and best in class. TVM plans to make 12 to 15 investments behind single asset companies developed within a PFC and five to eight later-stage investments in a number of sectors of life science.

After reading all about the benefits of our innovative model, the reader may ask for

some proof that the PFC model works and that Lilly is indeed a motivated buyer. To this, I point to the recent acquisition by Lilly of a US-based PFC called Arteaus Therapeutics LLC. Arteaus was created by Lilly in 2010 as a pilot project for the PFC strategy by outlicensing the rights to a pre-clinical antibody to calcitonin gene-related peptide (CGRP) as a novel approach for the prevention of migraine headaches. Arteaus, managed by a semi-virtual team, began clinical development in June 2012. The asset provided a clinical POC approximately three years after the inception of Arteaus in 2010. Lilly announced the purchase of Arteaus in January 2014, thus providing a strong endorsement of our investment strategy and validation of our exit aspirations.

Through its presence in Montréal and Munich, its international network and investor base from Korea, Europe, U.S. and Canada TVM has access to innovations on a global basis. The innovative nature of the investment model, the focus on building value for all stakeholders in the life science industry and its proven international network that covers North America, Europe and Asia define TVM as an international partner for Canadian life science innovations and its stakeholders.

Dr. Luc Marengere is a Managing Partner of TVM Life Science Management Inc. and is based in Montreal. Luc oversees the deployment of the investment strategy in North America. Luc joined TVM Life Science in 2012 after more than 16 years of venture capital experience, most notably as a Managing General Partner with VG Partners where he founded the VG Advanced Life Sciences Fund. Luc was a Director on the Boards of Canadian and US-based biotech companies. Prior to joining VG Partners, he was a Partner at CDP’s venture group SOFINOV and conducted research at Amgen. Luc holds a Ph.D. from University of Toronto.

To see this story online visit http//biotechnologyfocus.ca/ tvm-life-science-is-leading-theway-with-an-innovativeinvestment-model

across canada

NOVEL APPROACHES TO

CARTILAGE REGENERATION:

the future of joint repair

The arthroscopic images taken during a BST-CarGel surgery.

The original lesion before BST-CarGel treatment.

The delivery of BST-CarGel in a cartilage lesion.

The repaired lesion at the 13-month 2nd look arthroscopy.

Special to Biotechnology Focus

Osteoarthritis, a form of arthritis which occurs when cartilage becomes damaged or is worn away, is the most common kind of arthritis, affects one in eight Canadians and occurs as a result of physical trauma or excessive wear and tear which can cause chronic and debilitating pain.

C

artilage is a tissue in the body which provides structure and support to the body’s other tissues. In the knees and other joints, it is found at the end of bone where it provides a cushioning effect and helps joints to articulate smoothly. Once damaged, cartilage cannot heal on its own, and yet, if it is not treated, it can lead to arthritis or even total joint replacement.

Repairing damaged cartilage is one way to slow down or prevent knee joints from developing osteoarthritis – but the body does not do this well on its own, and even

less so as we age. Despite the daunting hurdle, a group of Canadian scientists were inspired over 12 years ago to work together to address the challenge of repairing cartilage. The team of multi-disciplinary researchers led by Dr. Caroline Hoemann and Dr. Michael Buschmann from École Polytechnique in Montréal, in collaboration with the company BioSyntech (now Piramal Life Sciences�Bio-Orthopaedics Division), developed an entirely new therapy that uses biopolymer technology for enhancing cartilage regeneration which is already being marketed in Europe and also undergoing

further study to expand its potential use.

The technology itself is simple: an implant, made of a chitosan solution and buffer, is mixed with autologous blood and applied to lesions. What makes it unique is that this combination stimulates the body to regenerate its own cartilage, and may indeed be pioneering an entirely new way to treat damaged joints.

Nurturing talent and collaboration: the key to discovery “As a senior scientist making the transition April/May 2014 BIOTECHNOLOGY FOCUS 19

across canada “What really made a lasting impression on me was bringing in a consumer to contribute to my research, which really shaped a broader vision on how to translate my investigation to the clinical setting.” — Dr. Caroline Hoemann from industry to academia, funding was crucial so that I could ensure that my research on chitosan would continue,” says Dr. Hoemann whose research in this area was initially funded through the Canadian Arthritis Network, or CAN - a national research infrastructure, supporting arthritis research and development through multiinstitutional, trans-disciplinary partnerships between researchers, industry, government and consumers. “The support was crucial in terms of establishing my career and nurturing all of the fruitful collaborations that still continue to this day.”

At one of CAN’s annual meetings, Dr. Hoemann was inspired by a presentation on proteomics and blood serum from University of Manitoba researcher Dr. Hani El-Gabalawy (who is now scientific director of CIHR’s Institute of Musculoskeletal Health and Arthritis), and later worked with him and a hematologist on a related study.

“There are four key players that are involved in this research and CAN brought them all together,” says Dr. Hoemann, about the connections she made with scientists, clinicians, industry and also patients – known now in the arthritis community as ‘consumers’. “What really made a lasting impression on me was bringing in a consumer to contribute to my research, which really shaped a broader vision on how to translate my investigation to the clinical setting.”

Helping the body heal itself Dr. Hoemann sees the work that she and her colleagues are doing in this area as important for several reasons.

First, the treatment is used in conjunction with microfracture surgery, the gold standard in cartilage repair therapy, and enhances its effectiveness. Second, following its primary function of stabilizing the blood clot in the cartilage lesion, the treat20 BIOTECHNOLOGY FOCUS April/May 2014

ment encourages a natural healing effect by encouraging stem cells to be drawn to the lesion to naturally repair itself – which is less risky than taking stem cells from the patient themselves and reintroducing the cells directly into the lesion. Third, the treatment takes advantage of the body’s own mechanisms to regenerate cartilage by stimulating the cells that are already there to regenerate tissue.

The clinical turning point Dr. Pierre Ranger is an orthopaedic surgeon who works in several clinics across Montréal and Laval, and has been practicing for more than 30 years. He operates on about 20 to 25 knees a week.

“I said: I have to use that,” Dr. Ranger recalls of the 2001 meeting when he first saw slides of repaired cartilage that resulted from implants that Dr. Hoemann had inserted into animal models. “It’s still the best result I’ve seen on cartilage – there’s nothing else like it.”

Dr. Ranger was later involved in Health Canada’s Special Access Program where 33 patients received the new treatment, and in the international randomized controlled trial of 80 patients, Dr. Ranger operated on several patients and the effects he was able to see through arthroscopy were the highest quality of cartilage repair that he had seen in his career. He believes the momentum that Dr. Hoemann and her team have created with their research is where the future of knee damage repair lies.

“Eventually I think we’ll be able to completely regenerate cartilage. Knees are the easiest joint to get into and to treat, so it’s the first joint where we’ll be doing something different than we are now.”

In-Market Success Currently, Piramal Life Sciences is marketing the product as BST-CarGel® in

Europe (it is not yet approved in Canada).

It is applied as a one-step procedure by combining two components — a chitosan solution and a buffer which are then mixed with fresh autologous whole blood - just before its application to a lesion surgicallyprepared by bone marrow stimulation, such as microfracture.

A randomized clinical trial showed that BST-CarGel® treatment at 12 months was significantly superior to microfracture alone which is currently the standard of care in cartilage repair. The results showed consistently greater volume of repair tissue with highly improved tissue quality, more closely resembling the patient’s own cartilage. The clinical benefit to patients in terms of pain, stiffness, and ability to function were equivalent to microfracture at the 12 month mark with a similar safety profile.

These results were recently published in the American Journal of Bone and Joint Surgery (Stanish, 2013).

The patients in this trial are part of a fiveyear follow-up study conducted by Piramal Life Sciences. It is well-documented that early improvement in structure (as observed following BST-CarGel® treatment) is predictive of long-term durability (Eshed, 2012; Brun, 2008; Krishnan, 2008; Knutsen, 2007). Consequently, the researchers are hoping to find that over time it will have more sustained results than micro fracture alone.

“These results are impressive,” Dr. Hoemann notes, “considering that there have only been four large randomized controlled trials in cartilage repair – ever. Making progress in cartilage repair is a real struggle,

across canada since each patient knee has a unique repair environment, and also because it can take up to two years to demonstrate that a treatment produces a more durable repair outcome than the standard-of-care. In many other types of disease, efficacy can be proven within several months of treatment.”

Expanding use – beyond the ideal patient BST-CarGel® is indicated for the repair of grade 3 to 4 or “severely abnormal” cartilage lesions and was recently approved in Europe to be used in all joints. The treatment thus far has been found to be most effective in younger patients with less advanced levels of cartilage damage, however, Dr. Hoemann and her colleagues are already on the case for expanding this indication.

“The goal is to elicit cartilage repair in a wider range of patients with different levels of knee damage,” says Dr. Hoemann.

A recent study, published this year in the Osteoarthritis Research Society International Journal (Guzman-Morales, 2014) looked at cartilage repair in older knee models with more ‘challenging’ cartilage damage to see if micro-drill holes (similar to the ones done in microfracture surgery) could be stimulated to induce higher quality cartilage repair tissue when treated by presolidified chitosan/blood implants. The implants were found to induce a unique “wound bloom” reaction, characterized by bone resorption and woven bone repair

around the top of the initial hole edge.

Treated drill holes with robust bone repair were also found to have superior cartilage repair quality.

The burden and cost of OA pain and disability in Canada is rising – and solutions are needed now more than ever According to the Canadian Arthritis Society, it is projected that within 30 years there will be a new diagnosis of Osteoarthritis every 60 seconds, resulting in almost 30 per cent of the employed labour force having difficulty working due to the fact it hurts to move around. The potential impact of adequate pain management strategies in osteoarthritis would result in cumulative savings of $488 billion over the next 30 years, which is a reduction of nearly $41 billion in direct costs and $447 billion in indirect costs.

What new understandings have been revealed over the past decade are providing scientists, physicians, and most importantly patients with hope for people with osteoarthritis so that their treatments can be less invasive, offer greater outcomes and provide relief from symptoms for longer than ever before.

2.

3.

References 1. Brun P, Dickinson SC, Zavan B, Cortivo R, Hollander AP, Abatangelo G. Characteristics of repair tissue in second-look and third-look biopsies from patients

BST-CarGel® is indicated for the repair of grade 3 to 4 or “severely abnormal” cartilage lesions and was recently approved in Europe to be used in all joints. The treatment thus far has been found to be most effective in younger patients with less advanced levels of cartilage damage

4.

5.

6.

treated with engineered cartilage: relationship to symptomatology and time after implantation. Arthritis Res Ther 2008; 10: R132.

Eshed I, Trattnig S, Sharon M, Arbel R, Nierenberg G, Konen E, et al. Assessment of cartilage repair after chondrocyte transplantation with a fibrin-hyaluronan matrix--correlation of morphological MRI, biochemical T2 mapping and clinical outcome. Eur J Radiol 2012; 81: 1216-1223.

Guzman-Morales J, Lafantaisie-Favreau CH, Chen G, Hoemann CD. Subchondral chitosan/blood implant-guided bone plate resorption and woven bone repair is coupled to hyaline cartilage regeneration from microdrill holes in aged rabbit knees. Osteoarthritis Cartilage 2014; 22(2): 323-33.

Knutsen G, Drogset JO, Engebretsen L, Grontvedt T, Isaksen V, Ludvigsen TC, et al. A randomized trial comparing autologous chondrocyte implantation with microfracture. Findings at five years. J Bone Joint Surg Am 2007; 89: 2105-2112.

Krishnan SP, Skinner JA, Jagiello J, Carrington RWJ, Flanagan AM, Briggs TWR, et al. Durability of cartilage repair-does histology matter. J Bone Joint Surg Br 2008; 90-B Suppl II: 323-324.

Stanish WD, McCormack R, Forriol F, Mohtadi N, Pelet S, Desnoyers J, et al. Novel Scaffold-Based BST-CarGel Treatment Results in Superior Cartilage Repair Compared with Microfracture in a Randomized Controlled Trial. J Bone Joint Surg Am 2013; 95: 1640-1650.

To see this story online visit www.biotechnologyfocus.ca/ novel-approaches-to-cartilageregeneration-the-future-ofjoint-repair April/May 2014 BIOTECHNOLOGY FOCUS 21

By: Katherine Bonter and Tania Bubela

Translational Research

Translating Molecular Diagnostics into the Clinic

M

olecular diagnostics (MDx), derived from advances in ‘omics fields, are the foundation of new paradigms in proactive, preventative and personalized medicine.

Their translation into clinical practice, however, faces increasingly high regulatory hurdles, constant updating of expensive infrastructure, and substantial validation and clinical development.

Innovating - translating discoveries into clinical practice - in molecular diagnostics is both expensive and high risk.

Successful innovation in high risk environments, such as MDx, requires harnessing the strengths of stakeholders in multiple sectors.

Increasingly, this means developing incentives and strategies to leverage the financial resources, expertise and assets of both the public and private-sectors in ways that are complementary or synergistic. In recognition, funding agencies, such as the 2012 Genome Canada-CIHR funding program in personalized medicine and genomics, encourage co-funding and partnerships between academic, government, and industry researchers, with explicit input from patient organizations and other affected stakeholders. Indeed, that program invested $150 million in personalized medicine projects leveraged against in-cash and in-kind contributions from other sectors. Enabling multi-sectoral collaboration will be especially important in MDx, for example in supporting the Canadian diagnostics sector where research and development may be independent of pharmaceutical development in larger companies. This article argues that strong and integrated publicprivate collaborations and partnerships will be essential to support the MDx R&D. It provides a high level ‘status check’ of the MDx industry and the translation and commercialization of MDx in Canada.

The State of Molecular Diagnostics in Canada Nine companies listed on BIOTECanada include MDx as a sub-sector activity. Twenty companies include genomics as a sub-sector activity and 23 include proteomics. In contrast, a 2011 US report estimated that there are 396 companies in the U.S. commercializing MDx and 376 genomics-based biotech companies (Batelle Technolgy Partnership Practice May 2011). These statistics clearly indicate a less robust industry in Canada compared to the U.S. A search of the United States based clinicaltrials.gov for clinical trials with genomic, proteomic, gene-expression or “gene expression in the intervention field” identified 772 open studies. Of these studies, 178 indicate industry sponsorship (23 per cent) and only 29 (4 per cent) have a Canadian organization as a sponsor, three of which are industry sponsored (Table 1); only 10 per cent of Canadian trials are industry sponsored, compared to 23 per cent for all trials. The data, therefore, indicates strong public-sector involvement compared to private-sector involvement in the clinical development of MDx that are not companion diagnostics.

Overcoming Challenges in the Clinical Development of Molecular Diagnostics in Canada Despite increased emphasis on public-private collaborations in clinical development projects, such as those funded by Genome Canada, commercializing a molecular diagnostic in Canada is challenging.

For example, Myriad’s attempts to commercialize BRCA testing were largely unsuccessful in Canada as provincial diagnostic testing facilities have implemented BRCA testing largely ignoring Myriad’s Canadian patents. Regardless of the rationale for this, widespread patent infringement is clearly an outcome that is problematic for the nascent MDx industry in Canada.

22 BIOTECHNOLOGY FOCUS April/May 2014

In addition to intellectual property challenges, there are also hurdles associated with Provincial health technology assessment processes. While Genomic Health’s OncotypeDx® test was rapidly approved by the majority of U.S. payors as early as 2009, it took more than six years of efforts to gain payor approval in Ontario, Québec and New Brunswick. In March of 2014, the test cleared the reimbursement hurdle in Alberta, and shortly after also in British Columbia. The OncotypeDx® example illuminates a structural problem in Canada - each province has its own process for evaluating the clinical performance or cost-effectiveness of a molecular test.

This means the entry point for companies and the evaluation criteria applied is often unclear. Some provinces, for example, Québec and Ontario, are working to address this issue, developing initiatives and organizations for the evaluation of MDx developed by either the public or private sector. Provinces will need to respond to innovations in MDx through the development of strategies, programs, infrastructure for the clinical development, evaluation, funding and clinical implementation of tests. As responses evolve, there will need to be significant input from developer communities, including on how public and private sectors can work effectively together to translate their tests for the benefit of patients, while reducing costs and risks associated with their development.

Furthermore, incentives for Canadian companies to commercialize in Canada are misaligned. A Canadian company that commercializes in Canada has no clear funding strategy for tests provided in the province where the company operates, other than direct payment by patients. The only funding source for commercial tests is the ‘outof-province/out-of country funding budget’; making commercializing out-of-province or in the U.S. more attractive than ‘in province’. This creates perverse incentives, which limit returns on public investments in the research and development of MDx. Put simply, the Canadian MDx landscape is in flux. In the past low cost diagnostic services were largely provided and funded by provincial health care systems based on a decentralized model of testing. Hospitals established, managed and operated in-house testing laboratories and, to a lesser degree, outsourced tests to the private sector as needed. Disruptive forces have challenged this operating model in Canada and elsewhere, in particular, with the availability of high cost - high value MDx developed and provided primarily by industry. This exclusive service provider business model, of which Genomic Health is an example, impacts evaluation, funding and access to testing.

An exclusive service provider business model may be justified when the development and regulatory costs are high. Driving up costs are the evidence base for clinical utility and standards to ensure quality control for diagnostic facilities. Payors and clinical adopters of diagnostic services require evidence generated from both retrospective and prospective clinical studies for decision making.

No payor, either in Canada or elsewhere, will spend on molecular tests without solid proof demonstrating its clinical utility. Interestingly, although the exclusive service provider business model has not been readily accepted in Canada, evolving provincial strategies for molecular diagnostic testing services are increasingly centralized. This centralization suggests that the same drivers that make the exclusive model attractive for industry, are also at play in the public sector. However, the motivations are somewhat different. In the public sector it is being driven by reducing costs and ensuring quality through rationalization of services; while in the private sector, it is being driven by monopolistic pricing that is likely to increase

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Translational Research Table 1. Canadian Sponsored Clinical Trials in Molecular Diagnostics NCT No.

Title

Sponsor(s)

NCT00160940

Differential Gene Expression of Liver Tissue and Blood From Individuals With Chronic Viral Hepatitis

University Health Network, Toronto

NCT01802905

Utilization of Genomic Information to Augment Chemotherapy Decision-making for People With Incurable Malignancies

British Columbia Cancer Agency|BC Cancer Foundation

NCT02048124

Study Comparing the Diagnostic Yield of Solid Lesion Biopsies Performed by EUS-FNA Using the 25d ProCor Needle Versus the Standard 25g Needle

Centre hospitalier de l’Université de Montréal (CHUM)

NCT02109614

Early Aortic Valve Lipoprotein(a) Lowering Trial

McGill University Health Center|George Thanassoulis|Jewish General Hospital|Laval University|Quebec Heart Institute

NCT00631254

CysLT1-r Expression Following Allergen Exposure in Asthma and Allergic Rhinitis

Laval University

NCT01196936

Low-Dose Tamoxifen Citrate in Reducing Breast Cancer Risk in Radiation-Induced Cancer Survivors

City of Hope Medical Center|National Cancer Institute (NCI)|St. Jude Children’s Research Hospital|University Health Network, Toronto|Emory University|University of Michigan|Dana-Farber Cancer Institute|Mayo Clinic|University of California, Los Angeles|University of Washington

NCT01925742

Study of the Efficacy of New Non-invasive Prenatal Tests for Screening for Fetal Trisomies Using Maternal Blood

Centre Hospitalier Universitaire de Québec, CHU de Québec|Université Laval|Genome Canada|Genome Quebec|Genome British Columbia|Canadian Institutes of Health Research (CIHR)

NCT00414115

National Active Surveillance Network and Pharmacogenomics of Adverse Drug Reactions in Children

University of British Columbia|Genome Canada|Genome British Columbia|Child and Family Research Institute|University of Western Ontario, Canada|Provincial Health Services Authority|Health Canada|Canada Gene Cure|Eli Lilly and Company|Pfizer|Merck Sharp & Dohme Corp.|Canadian Society of Clinical Pharmacology|Canadian Institutes of Health Research (CIHR)|Canada Foundation for Innovation|British Columbia Clinical Genomics Network

NCT00175578

Detection of Early Lung Cancer by Serum Protein Expression Profiling

University of British Columbia

NCT00522496

Proteomics of Severe Traumatic Brain Injury: A Feasibility Study

University of Calgary|Canadian Intensive Care Foundation

NCT00743626

Pap Smear Research Study

University Health Network, Toronto

NCT00243555

Development of an Algorithm to Better Predict Clinical Responsiveness to Peanut

McMaster University|Hamilton Health Sciences Corporation|Food Allergy Initiative|AllerGen NCE Inc.

NCT01118130

Pharmacogenomics of Drug Safety in Multiple Sclerosis

University of British Columbia|Canadian Institutes of Health Research (CIHR)|Canada Foundation for Innovation|Genome Canada|British Columbia Clinical Genomics Network

NCT01934543

Effects of Polyunsaturated Fatty Acids on Intestinal Lipid Metabolism in Insulin-resistant Men

Laval University|Canadian Institutes of Health Research (CIHR)

NCT01309490

Phase I/II Study of Ribavirin Given as Monotherapy in Solid Tumour Cancer Patients

Jewish General Hospital

NCT02077361

An Open Label Clinical Trial of Retinal Gene Therapy for Choroideremia

University of Alberta|Ian M. MacDonald|Alberta Innovates Health Solutions|Canada Foundation for Innovation|Canadian Institutes of Health Research (CIHR)|Choroideremia Research Foundation Canada|Foundation Fighting Blindness|Imperial College London|University of Oxford

24 BIOTECHNOLOGY FOCUS April/May 2014

Translational Research Table 1. Canadian Sponsored Clinical Trials in Molecular Diagnostics NCT No.

Title

Sponsor(s)

NCT02069730

A Study of Drug Therapies for Salivary Gland Cancers Based on Testing of Genes

University Health Network, Toronto

NCT01774643

A Study of Pancreatic Cancer in Xenografts From Liver Metastases

University Health Network, Toronto

NCT01278875

Function of High Density Lipoproteins in Acute Coronary Syndromes

McGill University Health Center|McGill University

NCT01913093

N-PhenoGENICS: Neurocognitive-Phenome, Genome, Epigenome and Nutriome In Childhood Leukemia Survivors

The Hospital for Sick Children|Canadian Institutes of Health Research (CIHR)|Canadian Cancer Society Research Institute (CCSRI)|C17 Council|Garron Family Cancer Center at the Hospital for Sick Children|Pediatric Oncology Group of Ontario

NCT01565759

In Vivo Lithium Treatment Effects on Gene Expression Levels in Lymphoblastoid Cell Lines From Human Healthy Subjects

Capital District Health Authority, Canada

NCT01437345

A Multicenter Collaborative Study on the Clinical Features, Expression Profiling, and Quality of Life of Infantile Onset Facioscapulohumeral Muscular Dystrophy

Cooperative International Neuromuscular Research Group|FSH Society|FSHD Global Research Foundation|Muscular Dystrophy Canada

NCT01703585

Feasibility Study of Genomic Profiling Methods and Timing in Tumor Samples

University Health Network, Toronto|Ontario Institute for Cancer Research|Princess Margaret Hospital, Canada

NCT01113697

Genetics of the Early and Late Response to Allergen Challenge

University of British Columbia|Allergy, Genes and Environment Network (AllerGen)|Networks of Centres of Excellence (NCE)

NCT01966588

Adverse Events and Genomics in Schizophrenia

University of British Columbia|Vancouver Coastal Health Authority|Mount Sinai School of Medicine

NCT02050022

Chronic Obstructive Pulmonary Disease Biomarker Study

University of British Columbia|Genome British Columbia|Centres of Excellence for Commercialization and Research - PROOF|Canadian Institutes of Health Research (CIHR)|Genome Quebec|Providence Health & Services|St. Paul’s Hospital, Canada

NCT01655706

Canadian Biomarker Integration Network for Depression Study

University Health Network, Toronto|University of Toronto|University of Calgary|University of British Columbia|McGill University|Queen’s University|Centre for Addiction and Mental Health|McMaster University

NCT01658137

Diet Intervention and GEnetic STudy (DIGEST-Pilot)

McMaster University

costs. As more diagnostic tests reach the market, the private sector will need to be even more sensitive to the cost concerns of payors, necessitating greater communication with the end-users of the tests and early value calculations to ensure user needs are being met with respect to both effectiveness and cost.

In conclusion, pro-active cooperation and collaboration between the public and private sectors are proving to be key drivers of innovation in MDx internationally. However, to support a Canadian MDx industry, there needs to be greater engagement among sectors to develop costeffective diagnostics likely to be adopted by testing markets in Canada and elsewhere. To leverage Canada’s considerable public investment in research, industry brings a number of strengths in investment strategies, clinical validation, and distribution channels. The commercialization environment in Canada is challenging and public sector researchers need greater support from industry to effectively translate developments to the diagnostics market. However, commercialization strategies must be geared to the needs of the market, with thought given to the value proposition of the test from the payor perspective.

Thus improved communication and relationships is a three-way endeavor, between public sector researchers, industry with the ability to bring diagnostic products and services to the market, and public and private health systems which require new diagnostic tests to provide value in terms of health and resource gains. All stakeholders must be more effective in working together throughout the translational pipeline, from pre-clinical development to clinical implementation if MDx are to arrive at market and grow the Canadian MDx industry.

Katherine Bonter is the Director of Advocacy and Promotion at CepMED and works at the, Beaulieu-Saucier Pharmacogenomics Centre and The Montreal Heart Institute. Tania Bubela is with the Department of Public Health Sciences, School of Public Health, University of Alberta.

To see this story online visit www.biotechnologyfocus.ca/translating-moleculardiagnostics-into-the-clinic April/May 2014 BIOTECHNOLOGY FOCUS 25

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June 11-12 2014 Canadian Biosafety Symposium Venue: Winnipeg, MB Email: biorisk@icid.com Web: http://biosafety.icid.com

Venue: Montreal, QC Tel: 613-993-0414 Email: iums2014@nrc-cnrc.gc.ca Web: www.montrealiums2014.org/contact_ us_e.shtml

June 21-23

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The lasT Word

By Cedric Bisson,Teralys Capital

STRATEGIC RISING: Models of Engagement for Research and Development

M

ost industry observers would agree on the dynamics facing today’s biopharmaceutical industry: patent cliffs and lost pharma revenues; R&D pipeline productivity; challenging reimbursement landscape; and the list goes on. These occur on a backdrop of accelerated scientific innovation at a global scale, advances within regulatory bodies, patient population expansion (via coverage or new markets), search for efficiency and cost-effectiveness (and cost control), new cross-border opportunities (for instance, the EU-Canada agreements), and ever more informed group of patients worldwide demanding real innovation.

Models of engagement Against this backdrop, strategic pharma players have been exploring various models to tackle their research and development issues, with each pharma company often combining many models as part of its portfolio of approaches. At the traditional level, pharma still concludes academic collaborations, and they are sometimes large (e.g., Pfizer’s $100 million investment in the Boston Centers for Therapeutic Innovation), but one could argue that these laudable efforts does change the internal risk-averse culture within big pharma.

More interestingly, pharma’s involvement with new models of accelerators and incubators signal a desire to get closer to early stage drug development (often stemming from academic labs) and to apply a translational approach to it. In Canada, investments from AstraZeneca, Merck Pfizer GlaxoSmithKline, Boehringer, Eli Lilly, and Novartis in the CQDM represent a novel way to validate and test pre-competitive tools that improve R&D productivity. Likewise, Johnson & Johnson and Pfizer, among others, have invested in novel types of incubators, such as QB3 in San Francisco and LabCentral in Boston, whereby these incubators are located near innovative university campuses or in downtown locations, and act as magnets for new and emerging younger talent into biotech startup companies by means of their creative architectural design, low and flexible rental costs, and access to big pharma and top academics for mentoring purposes.

Other strategic players have decided to invest in or create funds.

Much has been written about the rise of corporate venture capital, which today is an essential component of many stage deals. In fact, most global pharma companies have some kind of corporate VC effort, with various degrees of strategic alignment on corporate priorities.

Some pharma companies go further and pursue exhaustive strategies to invest in external funds with an asset-based investment model. Eli Lilly’s investment in TVM Capital, or GlaxoSmithKline’s and Johnson & Johnson’s investments in Index Ventures, illustrate such approaches.

30 BIOTECHNOLOGY FOCUS April/May 2014

Finally, pharma companies have been working with small biotech companies for decades, and the pace keeps on getting stronger (perhaps slowed down by the better valuations some companies had recently been enjoying from public markets). Beyond traditional M&A or licensing models, there is renewed interest for deals that provide a unique pipeline boost, either at the platform level (Vancouver’s Zymeworks collaborations on bi-specific antibody therapeutics with Eli Lilly and Merck) or on specific therapeutic areas and compounds.

With regards to the latter, Versant Ventures’ investment with Roche in an Inception company focused on sensorineural hearing loss, or Sanofi’s investment in Third Rock Ventures” Voyager Therepeutics for gene therapy, are both examples of structuring an exit upon the achievement of certain milestones.

Implications for Canada What does this mean for Canadian researchers and universities? In a world where assets and technologies are benchmarked globally, and where economic value and reimbursement are driven by the novelty of a drug and its unique place in the treatment armamentarium, only the best research on clinically and commercially meaningful opportunities will find buyers. Canadian researchers therefore must continue their pursuit for excellence and be bold enough to develop truly novel innovation that will attract the attention of strategic pharma companies and headquarters.

Canadians would also be well served to expand their good local pharma connections and to build direct bridges with global R&D headquarters across the world. Researches, tech transfer offices, incubators also need to expand their global connections and to pursue innovation champions regardless of their location in the corporate structure.

At the industry level, while there is no denying the importance of established pharma companies, it sometimes pays to be a contrarian (the recent increase in gene therapy deals before pharma companies regained interest, is a good example). It is also a probably a good idea to expand reach beyond very large pharma companies into the increasing web of large biotech companies – the club of biotech companies with valuations in excess of $1 billion may indeed represent another source of untapped opportunities.

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