Biotechnology Focus December 2013/January 2014 by Promotive Communications

INSIGHTS FOR THE LIFE SCIENCE INDUSTRY

DECEMBER 2013 / JANUARY 2014 VOLUME 16, NUMBER 10

ONTARIO’S

LIFE SCIENCE COMMUNITY

INSIDE:

A VIRUS THAT COULD KILL CANCER

Publication Mail Registration Number: 40052410

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contents December 2013/January 2014 – VOLUME 16 – NUMBER 10

22 A virus that could kill cancer

FEATURES

10 The Asia Opportunity

Ontario Minister of Research and Innovation Reza Moridi discusses why Ontario’s life science sector needs to forge new relationships with this emerging market (By Shawn Lawrence) Opinion

14 Tricks of the trade

A roundtable discussion with industry veterans Drs. Mark Poznansky and Rafi Hofstein on what they accomplished on the recent science and technology mission to Singapore and Japan (By Shawn Lawrence)

16 In Pursuit of Partnerships

14 Ontario’s life science community looks to capitalize on the Asian Opportunity

Biotechnology Focus goes one-on-one with five of the delegates who attended the Singapore and Japan science and technology mission (Compiled by Shawn Lawrence)

22 A virus that could kill cancer Ontario researchers prepare to test Maraba-based oncolytic vaccine therapy in the clinic (By Hal Costie)

DEPARTMENTS 6

Research news

IN EVERY ISSUE

Business corner

28 Across Borders

Shining the spotlight on Singapore’s life science industry and where opportunities to collaborate exist (By Daniela Fisher)

28 Calendar of events

7 Research news

Montréal researcher to lead a national research project to cure HIV www.biotechnologyfocus.ca

30 The Last Word

Peter Pekos provides a CMO’s perspective on the need for sustainable margins (By Peter Pekos)

December 2013/January 2014 BIOTECHNOLOGY FOCUS 3

PUBlIShER’S NOTE

PUBLISHER/ EDITOR-IN-CHIEF SENIOR WRITER STAFF WRITER CONTRIBUTING WRITERS

Terri Pavelic Shawn Lawrence Daniela Fisher Hal Costie Peter Pekos

NATIONAL ACCOUNT MANAGER GRAPHIC DESIGNER

International partnering opportunities In recent years, the Asia-Pacific region has become a hot spot for Canadian trade missions and international partnerships in the life science sector. As traditional trading partners (the U.S., Europe) experience slower growth, Canada is looking to emerging economies such as Asia for new R&D partnerships, licensing opportunities and strategic investments. In this issue, we take a look at how Ontario – as well as Canadian life science companies in general – can find ways to tap into this growing market through partnerships and collaborations. For starters we spoke with Ontario’s Minister of Research and Innovation Reza Moridi about the opportunities that exist in Asia, and why life science companies should explore these markets. We also spoke with delegates that attended a recent trade mission to Singapore and Japan about their experiences. Already we are seeing examples of the successful outcomes that came out of this trade mission. Take for example the partnership agreement that was signed in early November between Singapore and the International Cancer Genome Consortium (ICGC). To be based in Singapore, the project will identify the genomic drivers in biliary tract cancer, specifically cholangiocarcinoma and gall bladder cancer. The ultimate aim is improving the understanding and clinical management of these rare cancers. The Singapore team will be led by professors Bin Tean Teh from the National Cancer Center of Singapore, Patrick Tan of the Genome Institute of Singapore, and Steve Rozen from the Duke-NUS Graduate Medical School. “The multi-national work thus far from the Singapore team represents exactly what ICGC is pursuing. Eventually we will be able to compare and contrast the mutational repertoires of a cancer type from different parts of the world,” said Dr. Tom Hudson, president and scientific director of the Ontario Institute for Cancer Research and one of the founders of the ICGC. The ICGC project is based on the Singapore group’s existing work. Their findings suggest that the same type of cancer from different parts of the world may require different treatment regimens. The ICGC Consortium is currently ahead of schedule in its 10-year goal to generate high-quality genomic data for the genomes of common and rare cancers. And its Singapore-based project is just the type of partnership that we’d like to see more of: a research collaboration that promotes both Ontario and Singapore institutions, while helping advance a solution to one of the most difficult diseases of our time.

CONTROLLER MARKETING MANAGER CIRCULATION DIRECTOR

Marcello Sukhdeo Elena Pankova John R. Jones Mary Malofy 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, Cognovie 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

L S I R

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.

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M p th k a b

V T

*S 4 BIOTECHNOLOGY FOCUS December 2013/January 2014

LIFE SCIENCE IS A HUMAN RACE 78% of global CEOs rank human capital as the #1 priority*

Making the next breakthrough isn’t about luck. It’s about talent, pure and simple. The brightest minds, specialized education, the insatiably curious – all blended in this unique sector of the knowledge economy. The race is always on in Life Sciences, and Mississauga, Ontario – Canada, is where great companies build winning teams. What else do you need to know?

VISIT WINTHEHUMANRACE.CA TO START NOW. *Source: PwC 15 th Annual Global CEO Survey 2012

R & D NEWS CAMH and Assurex Health launch joint venture to advance personalized medicine in Canada

(From L to R) Dr. Bruce Pollock VP Research, CAMH; James S. Burns, CEO, Assurex Health; Dr. James Kennedy, Head of the Tanenbaum Centre for Pharmacogenetics at CAMH; and Larry Meikle, patient who received genetic testing at the announcement of the creation of AssureRx Canada, a new company to advance personalized medicine in Canada A first-ever public-private partnership between the Centre for Addiction and Mental Health (CAMH) and U.S. biotechnology company Assurex Health could advance personalized medicine and treatment for Canadians suffering from mental illness. The goal of the partnership is to take a personalized approach to match the right medication at the right dose for each patient, based on their genetic makeup. Using Assurex Health’s GeneSight panel, physicians can see which psychiatric medications are likely to be effective for each patient and which ones are not, often avoiding treatment failure and side effects. The joint venture will enable research discoveries from CAMH to be brought into widespread clinical use. Substantial savings to the health care system are also predicted. “This partnership between CAMH and Assurex Health is essential to advance the widespread use of personalized medicine in psychiatry, and improve health care for Canadians who need medications for mental health problems,” said Dr. James Kennedy, head of the Tanenbaum Centre for Pharmacogenetics at CAMH. Kennedy adds

that this approach is a game-changer from the current trial-and-error approach to prescribing, which results in many patients having to try different psychiatric medications, each with potential side-effects, before the best medication for them can be determined. AssureRx Canada (ARxC) has been established as a subsidiary of the U.S. company, with its Canadian office and laboratory on CAMH premises. Assurex Health will provide backing for ARxC operations. CAMH holds a minority equity share in AssureRx Canada and will receive royalties on the sale of genetic tests that incorporate CAMH-discovered genetic markers. Assurex Health has a proven track record in the U.S. with its GeneSight panel, a test reimbursed by a number of insurance companies as well as Medicare and Medicaid. In the U.S., Assurex Health data shows a 70 per cent improvement in depressive symptoms when GeneSight testing is used to predict patient response to antidepressants versus treatment as usual, and a 28 per cent reduction in health care costs. GeneSight currently provides information on 36 commonly used psychiatric medications.

In Canadian clinical trials, researchers are aiming to conduct genetic tests on 20,000 individuals. Genetic testing is currently available through CAMH’s IMPACT study (www.im-pact.ca). In Canada, the GeneSight panel will be enriched with new CAMH-discovered genetic markers. These may include markers to predict which individuals will experience weight gain after taking anti-psychotic medications. Weight gain is a serious side-effect for a substantial number of patients. “We could not have established this joint venture without support from our Canadian partners,” said Dr. Kennedy, noting the pivotal support for CAMH’s genetic marker research by the Ontario Ministry of Research and Innovation and private philanthropist Larry Tanenbaum. CAMH’s Industry Partnerships and Technology Transfer Office led the commercialization team that established the business relations required for this partnership. To see this story online visit http://biotechnologyfocus.ca/camh-andassurex-health-launch-joint-venture-to-advance-personalized-medicine-in-canada/

Dr. Brian Coombes

Qu Biologics and McMaster University to study new Crohn’s disease research model

Qu Biologics announced recently a collaboration with McMaster University researchers to study a new research model for Crohn’s disease. The collaboration will examine the effectiveness of Qu Biologics’ Site Specific Im-

munomodulators (SSIs) in a chronic E. coli infection. Researchers will see how effective the SSIs are in reducing intestinal inflammation in an animal model of chronic E. coli infection. The study will also determine which types of immune cells are associated with reducing inflammation. McMaster University associate professor and Canada Research Chair Dr. Brian Coombes, a microbiology expert, will over-

6 BIOTECHNOLOGY FOCUS December 2013/January 2014

see the study. His recently published work in Nature Communications shows that infection of mice with a strain of Crohn’s associated adherent-invasive E. coli leads to the development of intestinal inflammation in the mice which closely resembles human Crohn’s disease. His team is using this research model as one which allows the study of Crohn’s disease in a chronic state. To see this story online visit http://biotechnologyfocus.ca/qu-biologicsand-mcmaster-university-to-study-newcrohns-disease-research-model/

R & D NEWS Montréal researcher to lead a national research project to cure HIV The Canadian HIV Cure Enterprise (CanCURE), a collaboration of leading Canadian HIV/AIDS researchers, will undertake an innovative research program to find new effective approaches to cure HIV infection in humans. The project, led by Dr. Éric A. Cohen in Montréal, received $8.7 million in funding from the Canadian Initiative for HIV Cure Research, a partnership between the Canadian Institutes of Health Research (CIHR), the Canadian Foundation for AIDS Research (CANFAR) and the International AIDS Society (IAS). CanCURE ultimately aims to further understand how HIV remains latent despite antiretroviral therapy, develop new research infrastructure relevant to HIV cure research and establish therapeutic strategies that will bring researchers closer to the discovery of a cure for HIV infection. “Current HIV treatments improve the health and prolong the life of infected patients, but they fail to completely eliminate the virus,” explains Dr. Cohen, who is also a professor in the Department of Microbiology, Infectiology and Immunology at the Université de Montréal. “HIV manages to hide in certain cells of the body, which represents a

significant barrier to a cure. The objective of the CanCURE project is to understand this mechanism in order to eliminate the cells that harbour the virus in the presence of antiretroviral therapy and eradicate or control HIV infection.” The CanCURE project brings together an expert group of 26 basic and clinical scientists, who span 10 universities and affiliated research centres and operate in outstanding environments favouring high-quality research within their respective programs. The nine principal investigators include Dr. Petronela Ancuta from the CHUM Research Centre, Dr. Jonathan Angel from the Ottawa Hospital Research Institute and the University of Ottawa, Dr. Jérôme Estaquier from the Centre de recherche du Centre hospitalier universitaire de Québec, Dr. Keith Fowke from the University of Manitoba, Dr. Andrew Mouland from the Lady Davis Institute for Medical Research, Dr. Mario Ostrowski from the University of Toronto, Dr. Jean-Pierre Routy from McGill University Health Centre, Dr. Michel J. Tremblay from the Centre de recherche du Centre hospitalier universitaire de Québec and Dr. Éric A. Cohen from the IRCM.

Health Minister Rona Ambrose speaks with Mr. Robert Reinhard, a man living with HIV, following the announcement of funding for research to cure HIV in Montréal. (CNW Group/Canadian Institutes of Health Research) To see this story online visit http://biotechnologyfocus.ca/montrealresearcher-to-lead-a-national-researchproject-to-cure-hiv/

Public-private partnership to seek personalized treatment approach for drug-resistant epilepsy

UCB Canada has partnered with Genome Canada, Génome Québec and multiple Canadian hospitals and research centres to support a four-year study known as “Personalized Medicine in the Treatment of Epilepsy.” The collaboration project is focused on developing a personalized treatment approach to the early diagnosis of various types of epilepsy, with the intention that research will identify genetic changes that predispose people to epilepsy and the changes that predict response to different anti-epileptic drugs. The project includes investments of

$10.8 million that will go towards forming the Canadian Epilepsy Network (CENet) to be led by Dr. Patrick Cossette at the University of Montréal Hospital Research Centre (CRCHUM), as well as co-leaders, Dr. Jacques Michaud, Sainte-Justine University Hospital Research Center in Montréal, and Dr. Berge Minassian, The Hospital for Sick Children in Toronto. Although there are over 20 different anti-epileptic drugs available today, these drugs are ineffective in about one third of patients. Epilepsy is particularly problematic in children since uncontrolled seizures in the developing brain largely contribute to cognitive decline. Managing epilepsy associated with intellectual disability is especially challenging since these symptoms are associated with a high rate of resistance to anti-epileptic drugs. Funded primarily by Genome Canada and Génome Québec, the research seeks to identify genetic changes that not only predispose people to epilepsy but also, and more specifically, the changes that predict the response to various anti-epileptic drugs. Through a $200,000 grant, UCB’s

partnership will help researchers determine the genetic sequence of all genes in individuals living with epilepsy who have different ranges of response to anti-epileptic drugs. “We are hopeful that our contribution to this project will help the team reach their goal. The development of personalized diagnostics and treatment will constitute a major advance in preventing brain damage and cognitive impairment in individuals living with epilepsy,” said Hervé Lilliu, general manager, UCB Canada Inc. “The discoveries made over the course of this project will help develop new diagnostic assays and clinical guidelines to help neurologists and general practitioners determine which of their patients would benefit most from alternative therapies, such as surgery or a ketogenic diet,” added Marc LePage, president and CEO of Génome Québec. To see this story online visit http://biotechnologyfocus.ca/publicprivate-partnership-to-seek-personalizedtreatment-approach-for-drug-resistantepilepsy/

December 2013/January 2014 BIOTECHNOLOGY FOCUS 7

BUSINESS cORNER Xagenic Inc. completes $20 Million Series B Financing Xagenic Inc. has successfully closed a Series B financing round totaling $20 million. New investor Domain Associates, LLC led the round, joined by existing investors who include CTI Life Sciences Fund and the Ontario Emerging Technologies Fund. Xagenic is MaRS Innovation’s first startup company and it is developing the first lab-free molecular diagnostic platform with a 20-minute time-to-result based on University of Toronto research by professors Shana Kelley and Edward Sargent. The platform which is called the AuRA™ (Amplified Redox Assay) technology uses patent-protected nanostructured microelectrodes to permit rapid, enzyme-free, direct detection of nucleic acids from clinical specimens without the need for sample extraction. The entire workflow is automated on a disposable cartridge that runs on a small, easy-to-use system that enables on-demand, near patient molecular testing, empowering clinicians to make treatment decisions for their patients at the time of first consultation. MaRS Innovation provided intellectual property protection and other key strategic investments in Xagenic’s technology

U.S. based Versant Ventures expands into canada U.S.-based life sciences venture capital firm Versant Ventures is expanding its operations into Canada. The firm plans to invest in earlystage drug discovery programs and establish new life science companies in Toronto. “We are investing in Canada to develop early-stage companies because we believe there is a strong combination of drug discovery talent as well as leading academic research across the country,’ said Dr. Brad Bolzon , managing director of Versant Ventures. “Our firm has a track record of investing in early-stage research as well as partnering with global pharmaceutical companies to launch novel therapeutics companies. We want to accelerate the creation of new biotech companies that can flourish here.” Bolzon says that Versant is making a longterm commitment to Canada and sees a great opportunity to translate scientific discoveries that are emerging at academic institutes across the country into early stage biotechnology enterprises.

during its pre-seed stage, and led a seedstage financing round that raised $2.2 million. Other seed-stage investors included the Ontario Institute for Cancer Research (OICR), the Ontario Centres of Excellence (OCE), the MaRS Investment Accelerator Fund (MaRS IAF), and the Health Technologies Exchange (HTX). That seed investment paved the road to Xagenic’s $10 million Series A round in January 2012 and the current $20 million Series B round, the proceeds from which

will support ongoing development and clinical studies as Xagenic seeks to achieve regulatory approval and commercialize its molecular diagnostic testing platform and lead diagnostic assay. In conjunction with the financing, Jesse Treu, PhD, Partner at Domain Associates, will join Xagenic’s Board of Directors.

“We specialize in commercializing novel discoveries and believe that working with local, dynamic research teams here in Canada can take them to the next level,” said Bolzon. “They can leverage our firm’s expertise and as these companies grow, we can help connect them with large pharma companies that share the same goal of getting novel therapeutics to market.” Versant has already established an office and created an Inception Sciences drug discovery engine in Vancouver to launch new companies. Inception Sciences recently joined forces with Bayer Healthcare to develop innovative therapeutics for retinal eye disease. Versant committed a $10 million Series A investment alongside research funding from Bayer to a new biotech company called Inception 4. The management team at Versant is planning on launching a similar unit in Montréal in 2014. Versant also recently formed a biotechnology incubator in Toronto called Blueline Bioscience that is collaborating with Celgene and aims to launch new companies in areas such as oncology and inflammation.

Blueline Bioscience is headquartered in the MaRS Discovery District of Toronto. Versant has more than $1.6 billion in assets under management in life sciences. Versant’s past successes include the formation of Amira, launched in 2005 in San Diego, which was later sold to Bristol Myers Squibb in 2011. Key members of the Amira team then went on to found Inception Sciences. Since 2005, these initiatives in San Diego have generated six pharmaceutical companies and generated almost 100 jobs in the San Diego area. More than $90 million in venture capital has been committed across multiple drug discovery programs generated through Amira and Inception Sciences. “Versant has a unique model for investing in and launching early-stage companies and we see ourselves being very active in the Canadian biotechnology sector going forward,” said Dr. Jerel Davis, principal with Versant Ventures who oversees Canadian operations for the firm.

8 BIOTECHNOLOGY FOCUS December 2013/January 2014

To see this story online visit http://biotechnologyfocus.ca/xagenic-inccompletes-20-million-series-b-financing/

To see this story online visit http://biotechnologyfocus.ca/u-s-basedversant-ventures-expands-into-canada/

BUSINESS CORNER A one-stop shop for SMEs to access government programs “Small and medium sized enterprises are the engines of Canada’s economic growth and this new service will help businesses make effective use of federal innovation programs to allow them to take their firms to the next level,” said Minister of State (Science and Technology) Greg Rickford, who announced the program. “This initiative promotes innovation by giving businesses access to the research support they need, so they can grow and create high quality jobs for Canadians.” By combining online, phone, and in person assistance, the Concierge Service provides a single point of contact. With the service, Canadian SMEs will in theory be able to more easily access government innovation assistance programs to develop and bring products and services to market more quickly. The entire service is intended to assist entrepreneurs reach their business objectives. To be delivered by the NRC’s Industrial Research Assistance Program (NRC-IRAP), the new service is available at www.concierge.portal.gc.ca.

Minister of State for Science and Technology Greg Rickford and NRC President John McDougall watch a demonstration of an innovative technology developed by NRC-IRAP client Cognivue. Photo Courtesy: National Research Council in Canada. The federal government and the National Research Council of Canada (NRC) have announced a new program to help small and medium-sized enterprises access business R&D programs. Concierge Service is a web-based portal for SMEs to find government innovation support programs that match their business needs. The service doesn’t directly fund companies. Instead, it matches your search terms to the corresponding programs available, many of which offer funding. Corinne Pohlmann, CFIB’s vice president of National Affairs, stated in a press release that the new service is a great example of how government can better support Canadian SMEs. She went on to say that for small businesses seeking information and guidance on R&D related activities at the

federal, provincial and municipal levels of government, the service helps ensure that small businesses receive the support they need in a timely and efficient manner. Concierge Service is open to Canadian firms from all industry sectors. Some of its main targets include: Firms undertaking research and development, firms in all phases of product and service development, and firms seeking productivity gains through the adoption or adaptation of technologies. The new initiative stems from recommendations that were receieved during government consultations over federal R&D support. The consultations found that SMEs struggle to understand and access much of the R&D support available to them, and recommended a concierge service along with a web portal to address this issue.

To see this story online visit http://biotechnologyfocus.ca/conciergeservice-to-help-smes-access-availablegovernment-programs-in-one-stop-shop/

Dealmakers Theratechnologies Inc. (Montréal, QC) has reached an agreement with EMD Serono (Mississauga, ON) to regain all rights under the current collaboration and licensing agreement entered into in 2008 with EMD Serono, including commercialization rights for EGRIFTA® (tesamorelin for injection) in the U.S. EMD Serono agreed to terminate its collaboration and licensing agreement with Theratechonologies in consideration of an early termination fee of US$20 million payable over a five-year period starting on the first anniversary of the closing date. Starting in 2016, Theratechnologies will also pay an undisclosed, increasing royalty based on annual net sales. Royalties will be paid until a cumulative aggregate amount is reached or until January 1, 2024, the first of these events to occur. National Bank Financial acted as the exclusive financial advisor to Theratechnologies for this transaction. As a result of the termination of the collaboration and licensing agreement, Theratechnologies will be responsible for all operations in the U.S. relating to EGRIFTA®, including the conduct of the postapproval commitments mandated by the U.S. Food and Drug Administration.

Response Biomedical Corp. (Vancouver, BC) has entered into agreements to distribute its Car-

diovascular portfolio of RAMP® products with two new distributors in China. These new distribution agreements follow the approval of Response’s RAMP® branded cardiovascular Point of Care Testing (“POCT”) portfolio by the China Food and Drug Administration (CFDA). The new distributors, Shanghai Elite Biotech Co., Ltd. and Beijing Clear Biotech Co., Ltd., are distributors of diagnostic technologies and laboratory products to hospitals in China. Both new distributors will market Response’s cardiovascular tests on Response’s RAMP® branded readers. The territory allocated between the two distributors encompasses all of China. Response’s existing distributors in China will continue to market Response’s cardiovascular products under their own brand labels and registrations. Specialty pharmaceutical company Nuvo Research Inc. (Mississauga, ON) and Russian pharmaceutical company NovaMedica LLC have signed a supply and distribution agreement providing NovaMedica the exclusive rights to market and sell Nuvo’s Pennsaid 1.5% and Pennsaid 2% products in Russia and some of the Community of Independent States (CIS). Pennsaid 1.5% and Pennsaid 2% are used to treat the symptoms and pain of osteoarthritis of the knee. Pennsaid 1.5%

is approved by the U.S. Food and Drug Administration (FDA) and is currently being marketed in the U.S., Canada and certain European countries. A new drug application (NDA) for Pennsaid 2% is currently under review by the FDA which has indicated that it expects to respond to the NDA by February 7, 2014. NEOMED (Montréal, QC) has announced a new collaboration with Johnson & Johnson Innovation, and its affiliate Janssen Inc. Canada, to accelerate the transition of university and biotechnology company early-stage research into potential treatments. Through this collaboration, teams of experienced technical experts at both the Johnson & Johnson Innovation Center in Boston, MA and NEOMED will work together to identify and advance medically important projects. These projects will come from NEOMED’s network of partnered academic institutions and biotechnology companies, as well as from Canadian, US and international drug discovery groups. Johnson & Johnson Innovation is the third global pharmaceutical company collaborator to join NEOMED since its founding in late 2012. The other global pharmaceutical company partners are AstraZeneca and Pfizer.

December 2013/January 2014 BIOTECHNOLOGY FOCUS 9

By: Shawn Lawrence

Spotlight

Minister Moridi discusses why Ontario’s life science sector needs to forge new relationships with emerging markets

Since its creation in 2005, the Ministry of Research and Innovation (MRI) has become as much a part of Ontario’s life science industry and its success as any government branch and its involvement and interest in the sector continues to spur on new collaborations within the sector between academia, the research community and industry.

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SPOTlIghT

“When you look at Asia, you see a region with three billion people. That ﬁgure is more than 40 per cent of the world’s population. And these Asian countries such as Singapore, Japan, South Korea, Malaysia, India and China, they are growing and becoming more mature; people are living longer in these countries and as people live longer they need more healthcare services, more products.”

Life science industry programs like Excellence in Clinical Innovation Technology Evaluation (EXCITE) and the Health Technology Exchange (HTX), support for institutions like the Ontario Brain Institute (OBI) and the Ontario Institute for Cancer Research (OICR) and funding to 39 provincial life science companies from 2010 to 2012 are but a few examples of the measures that MRI has taken to create a favourable environment for local businesses to succeed and the sector to grow. But there is another aspect to the Ministry’s focus that doesn’t get the same attention, its promotion of international trade and its ability to facilitate collaborations and partnerships between Ontario’s life science community and international partners. Reza Moridi, Minister of Research and Innovation comments there are many reasons why MRI is looking internationally for opportunities to expand the province’s life science sector but one reason stands out from all the rest. “Simply put, like any other sector, we can’t ignore what’s going on elsewhere in the world or we’ll end up getting left behind.” His feelings on the matter are further emphasized by his belief that Ontario’s life science sector can’t get complacent and focus only on domestic markets. It has to keep the momentum

to capitalize on. The benefits to taking part are numerous, whether it’s identifying or establishing key contacts in new markets, learning about differences in the way these businesses operate from our own, sometimes even these excursions provide valuable market intelligence for what could one day be a location that a company may want to market their product.”

going by collaborating and cooperating with international partners because if we don’t, someone else will beat us to the punch. “The bio-economy is driven by global competition and we have two choices, we can be comfortable with where we rank in the world, or we can expand our international engagements and encourage our life science businesses and corporations to think more globally and strive to be global leaders.” A popular vehicle for facilitating international engagements are outbound missions that are arranged by MRI/MEDTE and Canadian trade offices operating in various countries all over the world. These trade and S&T partnership focused missions have taken Ontario life science companies and researchers to tradeshow events, international business meetings and have given local life science businesses, corporations and entrepreneurs much needed international exposure. They have also led to innovative international business and research partnerships that have in some instances even laid the groundwork for giving Ontario’s life science companies access to these markets for their products. Moridi would like to see more local companies and researchers taking part in these missions. “I really do think going on these missions is something our corporations need

The Asia Opportunity The Asia-Pacific region has in recent years become one such hot spot for these missions and likewise an attractive destination for Ontario companies to seek out such interactive linkages. Missions to China, Korea, Japan, Southeast Asia and India have proven successful in the past. Thanks to MOUs that were signed by Ontario with India and China, there are a number of collaborative projects currently underway between scientists both here and there, as well as between organizations pursuing R&D partnerships, licensing opportunities and strategic investments in this sector. The focus on Asia is all the more necessary comments Moridi because traditional trading partners (U.S., Europe) are experiencing slower growth, while emerging economies, such as Asia are surging ahead. For example, the region has emerged as one of the fastest growing pharmaceutical markets. Moridi believes the onus is on Ontario and its life science companies as well as researchers to find a way to tap into this market by finding ways to collaborate and partner. Of particular importance is the fact that researchers are included in Moridi’s comments. This stems from his belief that all

December 2013/January 2014 BIOTECHNOLOGY FOCUS 11

SPOTlIghT

“I really do think going on these missions is something our corporations need to capitalize on. The beneﬁts to taking part are numerous, whether it’s identifying or establishing key contacts in new markets, learning about differences in the way these businesses operate from our own, sometimes even these excursions provide valuable market intelligence for what could one day be location that a company may want to market their product.”

Ch R&D, even fundamental basic research is a business unto itself. “More often than not, even as a researcher you’re still competing against your peers to be first in class. And while it’s not always obvious at first, more often than not there’s a commercial or economic interest tied to any form of research. Moreover, I believe if you’re a researcher working on a research project and somebody else in another country can assist you in some capacity, I assure you results will come much faster if they are working together rather than working in isolation. And saving time means you are saving money.” As such, when MRI helped facilitate an outreach Science and Technology mission called the “Ontario Personalized Medicine Mission to Asia,” researchers and research institutes were invited alongside Canadian life science companies to take part. The objective of this mission was to develop research and commercialization partnerships and collaborations between Ontario research institutes, technology companies with world class research institutes such as the Agency for Science, Technology and Research (A*STAR) in Singapore, pharmaceutical companies in Japan, and other Asian healthcare providers. It was considered a successful endeavour on a number of fronts particularly because as a Science and Technology Mission it fulfilled not only a business oriented component for Ontario delegates but an educational one as well. There were lessons to be learned through talking with delegates from Japan and Singapore with regards to best practices on how to conduct business.

1 “For example, Singapore has a very strong focus on research and innovation, and commercialization of that research. They have done very well in supporting their research and innovation community and that is translating into results for their life science sector. That’s the benefit of going on these missions, you see what other jurisdictions are doing right and you start to wonder can we do that too,” says Moridi. “When you look at Asia, you see a region with three billion people. That figure is more than 40 per cent of the world’s population. And these Asian countries such as Singapore, Japan, South Korea, Malaysia, India and China, they are growing and become more mature; people are living longer in these countries and as people live longer they need more healthcare services, more products. There’s a void that needs to be filled, a need for life science products

12 BIOTECHNOLOGY FOCUS December 2013/January 2014

and healthcare innovations one which I think we can meet.” In the end, it’s about selling Ontario made innovations and getting our foot in the door of this burgeoning market. “We all need to be salespeople for Ontario, we have to be open to going on the road to sell our products and services, no country is too small and no country is too big. The opportunity is now for us to enter into those markets and if we don’t enter today, it will be too late tomorrow.”

To see this story online visit www.biotechnologyfocus.ca/ one-on-one-with-ministerreza-moridi/

Children’s MiraCle network funds

Children’s

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by: Shawn Lawrence

ScIENcE AND TEchNOLOGY

IT LASTED ONLY A WEEK, BUT FOR ALL THOSE INVOLVED, THE RECENT SCIENCE AND TECHNOLOGY TRADE MISSION TO SINGAPORE AND JAPAN LIVED UP TO ITS BILLING PROVIDING ONTARIO DELEGATES WITH NEW Attendees inOPPORTUNITIES TO PARTNER AND TO SEE cluded Ontario Genomics Institute FIRST-HAND WHAT THESE TWO (OGI) president and CEO EMERGING GLOBAL MARKETS Dr. Mark Poznansky and MaRS Innovation (MI) president WERE ALL ABOUT. and CEO Dr. Raphael (Rafi) Hofstein. For Poznansky, the trip was a chance to spread the word about important projects going on at OGI, but more importantly an opportunity to find new allies and collaborative partners. For Hofstein, the mission was an opportunity to seek out business partnerships for his many start-up companies and better understand how they could access new markets. For both Poznansky and Hofstein, this wasn’t their first trip to Southeast Asia, but it was perhaps their most successful. “There was a definite feeling that they were open to discussions around collaboration especially with the research community in Singapore and in Japan,” comments Poznansky. “Both Rafi and I came away from our discussions with a strong feeling that they were very interested in what we had to offer, in fact we got the sense that they needed us as much as we needed them.” During these discussions, both sides got to compare company and research portfolios and find areas of complementary strength. Hofstein and Poznansky were impressed that there were so many,

14 BIOTECHNOLOGY FOCUS December 2013/January 2014

E R O P N A A G P N A I J S D N I AN

rs o o s d e itie h t n g n rtu i en ppo p O oo t

and surprised by the shift in attitude towards scientific research in both countries from their respective governments. In Singapore particularly, the government has poured billions into research institutes such as the Biopolis Agency for Science and Technology Research (A*STAR) over the past three years. “The main reason for Singapore’s cash infusion is that the country wants to improve its healthcare infrastructure, and strengthen its science and clinical sectors. It’s a process that really began in 2011, when the Singapore government announced a commitment of $16 billion over five years into science and technology, which is a truly staggering number,” says Hofstein. Both men have no illusions about that cash flowing out of Singapore into Canada, but they do believe there are ways to tap into this infrastructure or even leverage Singapore’s commitment to science and technology to their advantage, starting with establishing joint ventures on a much larger scale. “They’re getting money for science across government levels, which is great, but with that money there are now greater expectations of a return on investment and demands to deliver results more quickly,” says Poznansky. “I believe innovation is all about speed,” Pozansky says, adding that being first in class is often difficult without the help of others. “The days of doing research on your own or working in silos are long gone. Chances are someone else out there is going to have the exact same idea and you’re in a race with them to get it to market. I believe it’s better to work with them to maximize the chance of successful product launch because put simply, you will reach your goal much quicker working together.” It is this need to collaborate, fueled by Singapore’s (and Japan’s) internal pressures to produce results, that both Hofstein and

ScIENcE AND TEchNOLOGY “The main reason for Singapore’s cash infusion is that the country wants to improve its healthcare infrastructure, and strengthen its science and clinical sectors.” — Dr. Rafi Hofstein Poznansky believe will create opportunities for Ontario. At the same time, both believe Singapore is very willing to collaborate. “In our discussions with A*STAR, we hit upon two areas, rheumatoid arthritis and the genomics of mental illness, that they were very interested in what we were doing,” says Poznansky. “The people at the Genome Institute of Singapore are very committed to solving issues of mental illness, such as schizophrenia and depression. They’ve made this commitment based on the burden of illness, and the economic opportunities in this area and they see the work we’ve done with CAMH, the work of Dr. James Kennedy, head of the Tanenbaum Centre for Pharmacogenetics and found that there is common interest. It’s a tremendously important area of personalized medicine that has huge economic potential in terms of genetic testing for predetermination of efficacy and drug interactions. So there’s a possibility of us getting together with them on a potential project at the discovery and clinical level, and maybe even the commercialization level.” For Hofstein, his interest in Singapore goes beyond scientific collaborations. He believes the country’s location in relation to the Asian market is also an asset. “Singapore’s close proximity to India and China is very significant to what we are trying to accomplish,” explains Hofstein, who introduced two companies from MI’s portfolio to Singapore delegates: XLV Diagnostics Inc. and DLVR Therapeutics Inc. “ XLV Diagnostics was started as a joint venture between Sunnybrook and a research centre in Thunder Bay, and the company is developing a low-cost system for mammography. This is relevant because of the epidemic breast cancer outbreak in China and India that is placing a heavy burden on their healthcare systems. They can’t afford to install the highly expensive mammography systems in this area, which creates opportunity for XLV Diagnostics’ technology to break into these markets,” he says. The same is true for DLVR Therapeutics, an oncology company with technology that uses a critical property of high-density lipoprotein (HDL) biology to create a hydrophobic channel in the cell membrane, which allows for the delivery of drugs into tumour cells. Though both technologies are promising, accessing the Asian market is the true challenge. “The Singapore market provides a gateway into China and India for both XLV Diagnostics and DLVR Therapeutics,” explains Hofstein. “Partnering with Singapore may make this entry process easier since having a partner who understands the mentality, knows the language and people can pave the road into these markets in a more amiable way.” Poznansky adds, “In our experience, Singapore knows how to open gates into China. They speak the language and they know how to map market needs. That in itself is a very valuable thing. And it’s not just China; they also have strong ties with South Korea and Southeast Asia.” The trade-off would be a reciprocal arrangement where MI volunteers its capabilities to help its Singapore counterparts enter North American markets.

“They understand MI’s value in terms of the way we have positioned ourselves in Canada and North America,” says Hofstein. “It makes sense for them to rely on us as we rely on them in Southeast Asia.” Discussions around this arrangement are ongoing.

Opportunities in Japan The goodwill from Hofstein’s and Poznansky’s discussions in Singapore was duplicated on the Japan leg of the trip where each found

Success A CELEBRATION OF

Annual

Awards

Gala

Dinner

Wednesday February 26th, 2014 Liberty Grand ŸExhibition Place ŸToronto

For Sponsorship & Table Sales Contact the LSO Office 416 Ÿ426 Ÿ7293 admin@lifesciencesontario.ca December 2013/January 2014 BIOTECHNOLOGY FOCUS 15

and

ScIENcE AND TEchNOLOGY

“There’s no question a successful deal requires a certain level of trust. It seems to me that the people who we spoke with are really are looking to push the frontiers of their areas forward.” — Dr. Mark Poznansky

opportunities to speak with their Japanese counterparts. The RIKEN Institute, like A*STAR in Singapore, took great interest in the work of Dr. Kennedy and OGI. “On this front, the tangible results are that we made contact with a number of people who are interested in what we’re doing,” says Poznansky adding he can already see what the next steps are. “Firstly, they’re pooling populations of patients with schizophrenia and depression, and seeing how they’re being treated in Tokyo and comparing that to how they’re being treated in the Toronto area. They are also comparing the genetic tests that are being done, to see how the drugs are metabolized and how individual patients are going to react or not react. They are very interested in the company AssureRx Canada, its parent company Assurex Health and also CAMH. We have a very strong sense from the RIKEN Institute right on down from leadership that they want to do business,” says Poznansky. For Hofstein, the trip to Japan included a visit to the BioJapan Conference where he met with local pharma companies. “It’s an event that’s a lot like the BIO Convention in North America and has similar features, sizeable exhibits, lectures and of course, most importantly, biopartnering. I tried to take full advantage of the partnering opportunities; even before going, we suggested to the Canadian embassy to arrange meetings for us with key leaders in Japanese pharma.” The embassy successfully arranged meetings with several companies, including Astellas Pharma, Shionogi and Mitsubishi Pharma, among others. “Those meetings were quite successful,” says Hofstein. “I discovered that Japanese big pharma, like their North American counterparts, are looking to biotech more and more to fulfill their R&D activities. They are late-comers in that respect, so the timing of our visit couldn’t be better.” Hofstein adds that if he were to map the interests of Japanese pharma across the subsectors of medicine, everything they are looking for is available in Canada. “The research they need to replenish their pipeline is all happening in Canada, whether it’s oncology research, autoimmune disease research, neurodegenerative disease research, personalized medicine, etc. It’s just a matter of how we are able to package, present and tailor it to their specific requirements.” In terms of how MI can work with these pharma companies, Hofstein already has plans to start sending them technologies for them to review as a prelude for business discussions. Another key area that Hofstein stressed during his meetings with Japan was the idea that Ontario and Canada could be an ideal destination for clinical development.“We have organizations such as Clinical Trials Ontario, Centre for the Commercialization of Re-

16 BIOTECHNOLOGY FOCUS December 2013/January 2014

generative Medicine (CCRM), MI and others, and if we combine that into one big stronghold, we have the capabilities of cost effective clinical development.” Overall, while both Poznansky and Hofstein were impressed with what they saw through this trade mission, they feel it’s only a first step. Success in convincing Japanese and Singapore interests to work with Ontario’s life science community hinges on building relationships and trust. “There’s no question a successful deal requires a certain level of trust. It seems to me that the people who we spoke with are really are looking to push the frontiers of their areas forward. We need to reach their top science and business people, tell them about our challenges are in terms of getting to the market, learn about their challenges, and develop the kind of relationship where you can discuss common problems. After that, it’s possible to think about common solutions and then about where the money will come from,” says Poznansky. “It’s important that we not try to impose what we believe to be the right way to go,” says Hofstein. “On the contrary, we need to take the listener’s stance. The key to success is flexibility. You need to be innovative and adapt your product or service to their reality, because they understand what it takes to develop a product in Asia and bring it to their market.” Still, both men believe Ontario is poised to tap into these two markets thanks to this trade mission and now have a better understanding of the lay of the land. “I think we established the right relationships with the right people. Following up is the key to ensure that we continue to build upon our progress,” says Hofstein. “Whether it’s speaking with them over the phone and Skype regularly or taking a more aggressive approach, but we have to have a regular presence. Everyone talks about addressing the needs of emerging markets, but the only ones that are truly successful at it are the ones that appreciate the need to follow up.” “I feel if nothing comes of this, it will be a mistake,” adds Poznansky. “That doesn’t mean that every senior official in the life sciences should run to Japan and Singapore without thinking things through, but certainly if a company knows of some serious activity going on in Singapore and Japan in their area of business or research, I think they would be remiss if they don’t explore opportunities to get involved over there.” To see this story online visit http://biotechnologyfocus.ca/?p=10354

Compiled by Shawn Lawrence

Q&A

IN PURSUIT OF PARTNERSHIPS The International Trade Branch recently led a science and technology mission to Asia to identify joint funding opportunities and to establish strategic partnerships with leading pharmaceutical companies and top research institutes in Japan and Singapore. The program was organized in cooperation with the Canadian Trade Commissioner Service and the Ontario Ministry of Research and Innovation. Ontario delegates visited Singapore’s Agency for Science, Technology and Research (A*STAR) and Japan’s RIKEN Institute where they had an opportunity to participate in market briefings, presentations at technical seminars, one-on-one partnering meetings and pre-arranged site visits. In addition, delegates had the chance to attend one of Asia’s largest biotechnology conferences - the BioJapan World Business Forum in Yokohama. As a follow up to this trade mission, we sat down with five of the delegates who attended to get their first-hand accounts of the trade mission, what worked and what didn’t. We geared our questions to gain insight into their experiences and to see what advice they would give to others interested in pursuing international research collaborations and commercialization opportunities with academic and industry partners in this growing market. Dawn Richards, Director, Strategic Opportunities Office of Personalized Genomics and Innovative Medicine, Mount Sinai Hospital

Q: What benefits and opportunities most interested you from your meetings with asian delegates?

We wanted to share information on our prototype model of personalized medicine in autoimmune disease, for example using genomic information that will inform treatment of rheumatoid arthritis, primary biliary cirrhosis, and hypertrophic cardiomyopathy. We also wanted to get the word out about our Clinical Genomics Centre, how we’ve integrated this core genomics facility into our prototype model of personalized medicine, and to discuss ways that we could potentially work together in disease areas, such as combining or sharing genomic datasets for rheumatoid arthritis and other autoimmune diseases.

Q: in terms of results, what were the most successful aspects

What I enjoyed most was the sharing of information on projects of mutual interest (e.g. personalized medicine developments related to rheumatoid arthritis and other autoimmune diseases) and discovering that there was potential to work together on these projects. I particularly enjoyed my meetings at A*STAR, learning about opportunities they provide their students, including the opportunities to study abroad and the support they provide their students who choose to do so.

Q: Did you ﬁnd any barriers to your discussions with the asian delegates?

Q: What were you hoping to achieve by taking part in this

I think when you find common goals and areas in which you both

of your meetings from this trade mission? It’s still early days, but there is some follow up and ongoing discussions that have ensued. I think we’ve uncovered some potential ways to work together.

trade mission? December 2013/January 2014 BIOTECHNOLOGY FOCUS 17

Q&A work; discussions of mutual benefit ensue easily. So no, I didn’t find any barriers that stood in our way.

Q: What were you hoping to achieve by being part of the

Q: post meeting, what possibilities exist in terms of grow-

Given that Asia is a key growth market in personalized medicine, the desired future outcome from this mission is to establish international research collaborations and develop commercial opportunities as part of Asia’s multi-billion dollar pharmaceutical marketplace. As the delegation representative from OICR, I hoped to identify collaborators for specific OICR projects and OICR spin-out companies and understand available joint funding opportunities.

ing future collaborations? What areas of strength does asia present that are mutually rewarding to your own? essentially, what is the next step to ensure continuous dialogue in the hope of fruitful future outcomes? From our perspective, there certainly is an interest in personalized medicine and in finding better ways to treat chronic autoimmune diseases - these are global issues, not just unique to Canada. In terms of the next steps, timely follow up when you get home is important to show that there is an interest, and to ensure discussions will continue.

Q: What advice would you give to your Canadian peers who want to do business in asia? It’s important to be sensitive to cultural differences in doing business with our Asian counterparts, and when working together. Moreover, in certain cultures there is a lot of information exchanged before collaborations can occur, and trust takes time to be established. In North America, time is often of the essence, but in other cultures, it sometimes takes many meetings and a demonstration of commitment before work together can take place. So patience is important. There are huge time differences in working with partners in Asia but these can definitely be overcome, especially with today’s technology. At the same time, meeting face-to-face is very important to establish connections, strong relationships, and sometimes we just need to remember that email can’t do everything. And I can’t stress enough the importance of doing your homework before you go. If you’re meeting in person in Asia, you’ve traveled a long way and made a financial commitment - make the trip worth your while, and worth your potential partners’ while. Lastly, timely follow up is important – but that’s just a general rule of doing business.

Nicole Baryla, Director, Alliance and Project Management, Commercialization, OICR

Q: What beneﬁts and opportunities most interested you from your meetings with asian delegates? From the meetings held during the mission, it was clear that there is a lot of overlap between OICR’s research efforts in personalized medicine and the initiatives underway in Asia. The Asian researchers were keen to learn about the research in Ontario and showed a strong desire to look for synergies and opportunities to partner in the future. Specifically, some of the bioinformatics initiatives at OICR were complementary to research projects underway at A*STAR and hurdles the A*STAR researchers were facing could potentially be removed through solutions being developed at OICR. Institutes such as A*STAR and RIKEN are clearly also fostering world-class scientific talent which could be beneficial for joint efforts in the development of the next generation of scientists. 18 BIOTECHNOLOGY FOCUS December 2013/January 2014

ontario trade delegation?

Q: What were the most successful aspects of these meetings? The mission is set up for success when the delegates have identified the researchers, research institutes, companies, and specific research/ discussion topics upfront so that the most appropriate meetings can be scheduled and the right audience is in attendance. For example, in Singapore, an A*STAR researcher was paired with an Ontario delegate based on similar research interests/areas for collaboration. This helped to focus the discussions towards more tangible projects for collaboration.

Q: Did you ﬁnd any barriers during your collaboration discussions with the asian delegates? OICR is already involved in international initiatives such as the ICGC project and the new global alliance on responsible sharing of genomic and clinical data. Through these initiatives, OICR has developed relationships with many Asian research institutions and has been successful in these global initiatives. Being situated halfway around the world, location can be both a challenge and a strategic advantage. Time differences are always difficult when you have to collaborate across time zones. However, it is highly advantageous to gain access to the intercultural knowledge, skills and networks that can allow research to reach new levels.

Q: post meeting, what possibilities exist in terms of growing future collaborations that are mutually rewarding and what is the next step from your perspective to ensure continuous dialogue in hopes of positive future outcomes? For OICR, there are two specific opportunities that will be explored further. One relationship has already been initiated between the OICR bioinformatics team and a team within the A*STAR Genomics Institute of Singapore. A future collaboration could see bioinformatics tools developed at OICR being used in a Singapore project that is introducing and embedding genomic information into the diagnosis and treatment of medical diseases. A second relationship has been initiated between an OICR spin-out company and researchers at the National University of Singapore for therapeutic development in liver cancer. In both cases, each party brings complementary strengths to the table which could lead to joint collaborations in the future.

Q: What advice would you give to your Canadian peers that want to do business with asia? The Asian researchers and business professionals in the life science sector are keen to explore international collaboration opportunities. They have the ability to establish key infrastructure and capabilities rapidly. For example, Singapore has demonstrated its commitment to developing the life science sector by building capabilities to facilitate

Q&A innovation through the Biopolis research space which was designed to co-locate and promote collaborations among private-sector labs and research institutes. My advice to other Canadian researchers who wish to explore collaboration opportunities with Asia is to ensure targeted meetings are arranged and prompt follow up is completed. It is important to foster the relationship and show benefits to collaboration for both parties. Patience and engagement throughout the pre-collaboration discussions are crucial.

Catherine Burns, Director, Centre for Bioengineering and Biotechnology & Director, Advanced Interface Design Lab, and professor, Systems Design Engineering, University of Waterloo

Q: What beneﬁts and opportunities most interested you from your meetings with asian delegates? At the Centre for Bioengineering and Biotechnology we have over 120 researchers and nearly 100 student members. Our researchers are interested in collaborating with others in the world doing similar work. In many cases, there are very advanced facilities in Asia which could advance our research programs here. There are opportunities for our researchers to spend time with colleagues there, and the reverse, to host them here. There are opportunities for student exchanges as well which would be very educational for students in Canada and in Asia. Essentially we are talking about knowledge exchange, so that everyone learns more and moves further along.

Q: What were you hoping to achieve by being part of the

I see building more direct conversations between our researchers and theirs as the most immediate next step. In the near long term I would like to get people together – either by hosting their researchers for a visit to Waterloo, our researchers going there, or by encouraging student exchange. At Waterloo we have world class researchers in biosensors, biodiagnostics, and bioinformatics and these are very key areas in moving forward. I think they have very advanced facilities and equipment in Asia, but my sense is that the environment in Canada and particularly Waterloo is more innovative and entrepreneurial. Especially at Waterloo where we have a very good path to get research out of the lab and into industry. I think that is critical today.

Q: What advice would you give to your Canadian peers that may want to take part in a future trade mission or do business with the asian life sciences sector? It takes time to find the right relationships and build partnerships and because Canada is a very small country, it isn’t easy to find what you’re looking for in our own backyard. The need to think, look and build globally as such is becoming more and more critical for us and these trade missions are an avenue that we should exploit to our full advantage. Ahmed El-Sohemy, Founder of Nutrigenomix Inc. and Chair of the company’s International Science Advisory Board, associate professor and Canada Research Chair in Nutrigenomics, Department of Nutritional Sciences, University of Toronto

Q: What were you hoping to achieve by taking part in this trade mission?

ontario delegation? My role in the delegation was to bring awareness of the fantastic research in biotechnology that is happening at Waterloo. I also watch and look for potential strong matches of interests, so we can work towards building stronger relationships for future work.

Q: in line with your goals, what are the most successful aspects of these meetings? It’s still early to say, but we are following up on several strong connections and building stronger relationships.

Q: Did any barriers appear to your collaboration discussions with the asian delegates? Not in particular, but these are preliminary discussions. You need to do a lot of work before going to understand your team at home well and a lot of work on the people you are meeting so that you can have fruitful discussions.

Q: post meeting, what possibilities exist in terms of growing future collaborations and what is the next step from your perspective to ensure continuous dialogue in hopes of a fruitful future outcome?

This was for many of us that went, a science mission first as opposed to a trade mission. However, I went there with my company hat on and not just as a University of Toronto researcher. My company, Nutrigenomix, is a University of Toronto biotechnology start-up. We help dietitians and their clients by providing comprehensive, reliable, genomic information with the ultimate goal of improving health through personalized nutrition. We do this through our genetic testing service for personalized nutrition. Our service was launched in Canada in June 2012 and there are now over 500 authorized providers of our service. I believe the Ministry of Research and Innovation was hoping to see a mix of not only academics doing research, but also those who are working to translate research into some kind of commercial opportunity. For me personally and for Nutrigenomix, this trip as such was more of an opportunity for business collaborations and partnerships as opposed to seeking pure research collaborations. It’s just really about making ourselves visible and making the most of this opportunity to have coordinated meetings. I think visibility was a big thing, we don’t know necessarily what our Asian counterparts are engaged in, so there’s an educational component too that goes beyond showcasing our own work.

Q: What beneﬁts and opportunities most interested you from your meetings with asian delegates? December 2013/January 2014 BIOTECHNOLOGY FOCUS 19

Q&A I think the opportunity was primarily to make them aware of what we are doing, to share what we’ve developed and to see whether there was any interest in partnering. We were open to research collaboration opportunities but also on potentially partnering with start-up companies and/or more established companies in Singapore and Japan in the areas of genetic testing for personalized nutrition. Post meetings, the expectations were similar. Where there seemed to be more opportunity was not so much with A*STAR or the RIKEN Institute, but with smaller groups and companies in Singapore as well as in Japan. I was also invited to give a talk at the University of Tokyo where I met with a group there who had a start-up company and were planning to establish a plan to commercialize a similar technology to our own. Not surprisingly, post meeting we’re currently discussing with them the possibility of partnering rather than competing against each other. We have a much more developed product yet they have greater knowledge of the market in Japan which would give us a leg up in terms of accessing that market.

Q: in terms of results, what were the most successful aspects of your meetings during this trade mission? I really enjoyed the BioJapan meetings because they allowed us to meet with people from all over Asia, and not just Japan and Singapore. What was really encouraging about this leg of the mission is that it actually led to discussions with a major life science consortium in Thailand. BioJapan allowed us to make some good contacts and they’ve since followed up with us and are very interested in our product and introducing it to their market.

Q: it’s safe to say that you’ve made some inroads, what are the next steps? Well the possibilities I think are these discussions that we’ve started having with the group through the University of Tokyo and their start-up company as well as this group in Thailand, those are the immediate ones. There was also another big clinic in Singapore we met with where a director of a private health clinic came to this lunch time talk that I gave at A*STAR. This was an individual who was not part of A*STAR that I likely wouldn’t have had the chance to meet had they not invited me to speak and this individual really liked what we have developed. This has since led to further meetings and they’ve also expressed interest in bringing our kit to the market in Singapore. On a broader scale, looking at Asia as a whole, there’s the obvious that it’s just a huge market and they seem to recognize what Canada has to offer. I think we have a good international reputation for really good science and the products that come out of those scientific discoveries.

it was for me, meeting with A*STAR and the RIKEN Institute and not really pursuing anything with either of them but benefiting greatly from our other side meetings.

Kenneth Pritzker MD, President and CEO, RNA Diagnostics Inc.

Q: Can you give us a brief synopsis of your company and the technology it has developed? I’m a pathologist at Mount Sinai and have spent most of my career as an academic physician, but four years ago I joined a group that specializes in investment and management of startup companies in the Med tech sector called York Medtech Partners. RNA Diagnostics Inc. is our lead company. We’ve developed a molecular diagnostic technology that we believe radically improves cancer chemotherapy management. This is a technology that was discovered by Amadeo Parissenti at Laurentian University in Sudbury; it was actually discovered during a breast cancer clinical trial where they noticed that the RNA integrity was decreased in certain patients and that was associated broadly with response to chemotherapy. That was the beginning of the technology and over the past three and a half years we’ve developed that technology considerably and are moving to get it out into world markets. The product, the RNA Disruption Assay™ or RDA™ enables clinicians to identify patients who are not responding to chemotherapy early during treatment. The RDA technology works for most of the drugs that are currently out there and many others that will be down the line. It works on all the breast cancer subtypes so it’s useful over the entire spectrum of what’s called neoadjuvant therapy or response guided therapy. The goal with the technology is to identify patients that are not responding so that they can be switched quickly to alternate therapies.

Q: how close is the product to reaching the market? We anticipate first sales this coming year, in 2014, but we also expect those sales will be in Europe because the practice of breast cancer therapy is more oriented to using this test at the present time than here in North America. We have the test, what we’re doing at the present time is building the clinical system so we can provide it at scale, meet the demand and provide high quality.

Q: What advice would you give to your Canadian peers who want to do business in asia?

Q: how did you get involved in the trade mission to asia?

The value of a trade or science mission, or going there to do business really depends on who is there and what you have to offer. If you have something of interest to them then you stand a better shot. There are definitely lots of opportunities but they do things a little bit differently over there so be prepared for that. If you go, try to meet with a lot of different groups; don’t just stick to your schedule because sometimes the ones that really flourish are not necessarily the ones that you would have expected to. That’s how

We’ve been busy trying to cultivate relationships and awareness around the RDA technology in Japan both in the corporate world and the clinical trial world. On this front we’ve been particularly active over the past six months. When I got an invitation to participate in the mission, I felt it was a great opportunity to augment what we were already doing. I missed out on Singapore due to other commitments, but found a way to join the mission on the Japan leg. The reason for making that effort was two-fold. First as mentioned

20 BIOTECHNOLOGY FOCUS December 2013/January 2014

Q&A

we are cultivating relationships there and second the opportunity to broaden those relationships and to learn about other opportunities that might be occurring. We also had a particular interest in working with the Riken Institute.

Q: When you met with the riKen institute, what type of conversations did you have with them? All these meetings had a similar flavour, there’s a mutual discovery of interest, and we discuss ways of how to work on a common interest. The RIKEN Institute is one of the world’s most advanced institutes in the genomics world and they’re starting to move into personalized medicine, this is what we learned. We also learned from discussions with them that they have same sets of issues and challenges as similar institutes here in Canada, particularly in translating discovery into practical products or services and how to move them along into the market, essentially the commercialization of intellectual property. That was very interesting for me, and yet at the same time, they have also had some success at it and there’s an opportunity to learn from them. We look forward to learning more from these folks and if everything lines up find ways to use what we learn in furthering our own technology in their market.

Q: Did cultivating partnerships in Japan go beyond approaching the riKen institute? Yes, no company of our size can view the entire world by itself, it’s not really something we would attempt, so we used the mission to also explore channel partnering and collaborative opportunities that would assist us in getting our product to potential clients in Japan.

Q: What would you say were the most successful aspects of these meetings in Japan? For me, the successful aspects of these meetings were threefold. One, we met new people with new ideas both related to RNA diagnostics and beyond. Second, we increased the awareness around RNA Diagnostics and the RDA technology in the Japanese life science community and third, we made specific headway with some organizations about RDA and some of the things particular about Japan that we have to know and work with in order to get RDA marketed in Japan. I would say it was a very successful set of meetings.

Q: Unlike many of your peers who participated in the mission, the concept of procurement and gaining market access to Japan carried a lot of weight in your meetings. What were the differences you found in Japan as opposed to Canada? There are similarities and differences when it comes to procurement with the kind of product we are looking to market. Japan has a system that is not unlike Canada when it comes to cancer care, i.e. there are regional providers that are essentially public sector and there is also a private sector in Japan that includes cancer care. This is one avenue where various trials can be performed because there’s more flexibility in that part of the system. Although there are differences, what’s becoming clear is the general pattern of acceptance of tests and reimbursement for these tests is similar across the world and this is because of course clinicians talk with each other and unsurprisingly the reimbursement agencies and regulatory agencies talk with each

other. As such, we see not total uniformity but we see certainly a convergence in the questions groups ask of us and the hoops one has to go through to get a product of this type to market. And it all comes down to validation, i.e. the more people that validate the reputation of a product or the company, the better it is for us. The good news is that the acceptance of our product is gaining credence around the world and we do have support from many of the world’s leading clinicians for what we’re doing. The other key thing is that there is a need for a product like this. The concept that you modify a therapy successfully based on a response is now gaining momentum and this will position us quite well as we explore our marketing options in places like Japan.

Q: post meeting, what prospects exist for cultivating future collaborations? Introductory meetings in Japan are really very first pass and in order to develop these relationships further there needs to be a cultivation of information exchange and a learning of in much more detail of what they’re doing. That’s not much different than in any other part of the world, but it is much more formally organized in terms of how the Japanese like to work. I would say this is a first step, and my understanding is other steps are planned in the future. There was an understanding between the RIKEN Institute and the public sector bodies MaRS Innovation and the Ontario Genomics Institute that will try to foster collaborations amongst the private sector companies who have innovative technology and I think those possibilities are very real, and I think discussions will continue on how to best move them forward. The next step for us is keeping in touch, corresponding with the folks we met with and working to develop tangible collaborations. Although one can’t go back and forth continuously, one can correspond very easily. The second intersection for those folks and ourselves is attend the same meetings, and try to find ourselves talking to each other in different parts of the world. That’s happening already, as we have plans to attend the San Antonio Breast Cancer Symposium and meet with our Japanese colleagues there.

Q: What advice would you give to your Canadian peers who want to do business in asia? Asia isn’t one market; it’s vast and very large. In some parts of Asia, in Japan and Singapore, and more and more every day in China, it’s a very sophisticated market as well. There are relatively very few companies of our size even thinking about Asian markets. I would encourage Canadian companies to become interested. These are large markets, eager to collaborate, and Canada enjoys a good position and reputation in all these countries. They’re willing to talk with us, willing to work to try and do something together if it makes sense. Missions such as these also need to be part of a long range plan. They’re integral to advancing technology to markets, but they’re only the first step. It’s feasible to continue discussions today through Skype, email, and other social media, so we need to learn how to do all these things well to further these relationships.

To see this story online visit www.biotechnologyfocus.ca/in-pursuit-of-partnerships/

December 2013/January 2014 BIOTECHNOLOGY FOCUS 21

By Hal Costie, senior communications officer at OICR

ONCOLOgY

A VIRUS THAT COULD KILL CANCER:

ONTARIO RESEARCHERS PREPARE TO TEST MARABA-BASED ONCOLYTIC VACCINE THERAPY IN CLINICAL TRIAL Around the world researchers are developing drugs and vaccines to protect us from dangerous viruses.A research group in Ontario however is using viruses for good by developing virus-based immunotherapies for cancer. Now they are getting ready to test one of their most promising therapies in patients for the first time. Dr. John Bell and his collaborators are developing an innovative oncolytic vaccine strategy using an oncolytic virus derived from the Maraba virus. Dr. Bell is director of the Immuno- and Bio-therapies Program (ORBiT) at the Ontario Institute for Cancer Research and is also senior scientist, Cancer Therapeutics at the Ottawa Hospital Research Institute and a professor in the Departments of Medicine and Biochemistry, Microbiology and Immunology at the University of Ottawa.

he Maraba virus and other oncolytic viruses work by selectively replicating in and destroying cancerous cells. They are able to do this because mutations within cancerous cells cause them to lose the natural protection against viruses that normal cells have, making them more susceptible to infection. This means that few normal cells will be harmed and patients should experience far fewer side effects. Bell is a world leader in the field of oncolytic viruses and has recently enjoyed success with a therapy called JX-594, which is currently being tested in clinical trials. His

group is now building on that success and believes it made a significant leap forward with the development of their Maraba-based oncolytic vaccine therapy. The process of creating the new therapy began with one of Bell’s collaborators looking for an RNA virus that could be used as a starting point. Dr. David Stojdl of the Children’s Hospital of Eastern Ontario led the search and tested a library of viruses against 60 different cancer cell lines. The Maraba virus, which was first isolated in Brazilian

22 BIOTECHNOLOGY FOCUS December 2013/January 2014

sandflies in 1984, showed the most promise. Although Maraba is already a potent oncolytic virus the researchers saw room for improvement. “Through genetic engineering Dave created a new version called MG1, which has increased anti-cancer properties and a better safety profile,” explains Bell. Once the right virus was found and modified, Bell’s colleagues at McMaster University, Drs. Brian Lichty, Byram Bridle, Jonathon Bramson and Yonghong Wan began working to pair it with an anti-cancer vaccine against a commonly expressed tumour antigen Mage A3 to increase its effectiveness. Oncolytic viruses destroy cancer cells

OICR

ONCOLOgY WE HAVE THIS GREAT UNDERSTANDING OF CANCER AT A MOLECULAR AND CELLULAR LEVEL AND NOW IT IS POSSIBLE TO TURN THIS UNDERSTANDING INTO USEFUL CLINICAL AGENTS AND STRATEGIES.”

through the traditional method of infection and replication, but they also work by generating an immune response from the body against cancer. The adenovirus vaccine that the McMaster team paired with Maraba virus gives it a unique advantage over other immunotherapies. The vaccine serves to prime the immune system meaning that the patient will generate a stronger anti-cancer response than if they were treated with the single virus alone. In animal models this combination showed promising results so Bell and his team began to prepare for testing in humans. To be tested in a clinical trial the oncolytic vaccine comprising the Maraba virus and the Mage A3 adenovirus vaccine have to be prepared in pharmaceutical-grade GMP manufacturing facilities. Bell and his collaborators have established a GMP facility for the Maraba virus at the Ottawa Hospital Research Institute and a facility for the adenovirus vaccine at McMaster University in Hamilton, ON. “Getting these facilities up and running was a major challenge for our group. I am happy to say now that both the virus and vaccine have passed toxicology testing and have been deemed safe to test in humans,” explains Bell. In anticipation of conducting a clinical trial Bell has already been in contact with regulators at Health Canada. So far the response has been positive. “Given that this is an emerging field we wanted to be as proactive as possible,” says Bell. He plans on submitting a formal Clinical Trial Application with Health Canada in the first quarter of 2014. Bell expects that the trial will begin in the second quarter of 2014 and run for 18 to 24 months. Participation in the trial will be limited to those with solid tumours that express the Mage A3 antigen. Seventy patients are expected to enroll during the course of the trial. “When this trial opens we will have hit our biggest milestone to date in the development of the Maraba-based therapy. We will finally be able to assess the safety of the therapy and get some preliminary information on the clinical benefit,” says Bell. One of the main advantages of the Marababased therapy is that so far in animal models it has shown only a few minor side effects. “Given our initial testing we are expecting side effects such as nausea and fever in pa-

tients, but luckily these can be easily treated with over the counter medications,” says Bell. Although Bell is happy to see his research into the Maraba virus progressing to a clinical trial, he remains focused on the big picture and knows this is only a first step. “If things go well in this initial clinical trial we could then test the therapy in a larger trial, start others to test different versions of the Maraba virus we have developed and to test the virus in combination with other therapies.” Dr. Neil Berinstein, director of Translational Research for ORBiT Program, sees this and other clinical trials as being key to the advancement of the field and the widespread use of immunotherapies in the clinic. Berinstein has spent his career working in the field in both academic and industry settings and believes that they are ready for primetime. “Over the last 20 years there has been a steady increase in the understanding of how the immune system functions in cancer and now we have tools which have been proven to be clinically valuable. I think we are going to see an explosion of interest in the field because there is more confidence now that the immune system can be a potent form of cancer therapy,” says Berinstein. “We have this great understanding of cancer at a molecular and cellular level and now it is possible to turn this understanding into useful clinical agents and strategies.” Berinstein believes that multiple cancer immunotherapies will be in widespread use in the next five to 10 years. He points to checkpoint inhibitors, a type of immunotherapy that is being used in the treatment of melanoma, as an example of increasing interest in the field. “Once these inhibitors were shown to be useful in the treatment of melanoma clinicians started thinking about using these types of therapy in other cancers,” he says. “Several major pharmaceutical companies are working to develop these right now and there are also several large and important cancer vaccine trials underway. Immunotherapies are beginning to gain traction on a wide scale.” While Berinstein sees immunotherapies as becoming a more effective and common form of treatment for cancer he believes that they will be best used in combination

with other forms of therapy such as chemotherapy, radiation and newer targeted therapies. Dr. Bell agrees, “While the Marababased therapy could be used as a frontline therapy it will probably be best used when it is in combination with some other form of treatment. I think that this is necessary given the complexity of cancer and to provide the maximum benefit for patients.” Bell and Berinstein are both excited about the increased interest in immunotherapies from the pharmaceutical industry and clinicians, but believe that a concerted effort needs to be made to educate people about the field. “I’ve had both patients and clinicians raise an eyebrow when you suggest treatment with a virus,” Bell says. “But once they learn more about it they are onboard and really want to understand what’s behind it.” Berinstein thinks that we may see a similar trend amongst regulators, “Once this first generation of immunotherapies gain the approval of regulators and prove to be effective and important therapeutic tools in cancer, it should become easier for future therapies of this kind to reach the clinic more quickly. Further evidence that these drugs are safe and effective in clinical use will be a big step forward for the field.” As research in immunotherapies grows Berinstein believes that it is important for Canada and Ontario to leverage their existing strengths and establish themselves as world leaders. “In a field as diverse as immunotherapies you cannot be a leader in all areas. However in Ontario we have a foothold in cancer virology because of Dr. Bell, who is internationally recognized as a leader, and his network of collaborators. Through ORBiT at OICR we are attempting to bring all these pieces together and accelerate the science. The recent support and optimism for the field present us with a great opportunity that we must seize.”

To see this story online visit www.biotechnologyfocus.ca/ a-virus-that-could-kill-cancer/

December 2013/January 2014 BIOTECHNOLOGY FOCUS 23

BUsINEss DEVELOPMENt

MiSSiSSauga’S LIFE SCIENCES SECTOR

Photos: Moriyama & Teshima Architects

For MiSSiSSaUga’S liFe SCienCeS SeCtor, it iS the eXCeptional talent, innoVatiVe CoMpanieS anD the ConVergenCe oF the ManY SUpportS reQUireD that are propelling thiS leaDing eConoMiC ClUSter ForWarD. MiSSiSSaUga haS aMple poStSeConDarY eDUCation in CloSe proXiMitY to SUStain anD groW itS SUpplY oF great talent anD a BUSineSS CoMMUnitY that nUrtUreS it.

SKILLED AND WILLING Mississauga values a strong global business future, fostering a prosperous and sustainable economy that attracts and grows talent. The City provides firms with access to a skilled talent force with 66 per cent of resident workers having post-secondary education. The City is surrounded by 21 of Ontario’s finest, post-secondary institutions, most notably, the University of Toronto Mississauga’s (UTM) Terrence Donnelly Health Sciences Complex and the soon to be completed 6,300 sq. ft. Innovation Complex that will house the Institute for Management and Innovation (IMI). The University of Toronto Mississauga’s four-storey Terrence Donnelly Health Sciences Complex houses the new Mississauga Academy of Medicine, one of the most advanced sites for training family medicine and community-based primary care physicians in Canada. The complex includes laboratory space for life sciences research and expanded facilities for the Biomedical Communications Program. The IMI is a collaborative institute that provides students with access to professional masters programs in biotechnology, accounting, innovation and sustainability, and undergraduate programs in accounting, finance, marketing and human resource management. IMI is a cross-disciplinary institute producing mission-focused managers and future leaders with a combination of management skills and depth in their chosen field. The Masters of Biotechnology Program (MBiotech Program) for example, incorpo-

Geoff Reid, a recent graduate of the program, who with a team of young innovators created a Bluetoothequipped glucose metre. rates both science and business courses with eight to 12 months of work experience in some of Mississauga’s top life sciences employers such as GlaxoSmithKline, Patheon, Amgen and AstraZeneca. One success story that came out of the MBiotech Program belongs to Geoff Reid, a recent graduate of the program, who with a team of young innovators created a Bluetooth-equipped glucose metre that relays blood glucose readings to a smartphone application, an idea that was later adopted by Johnson & Johnson. Through the MBiotech Program, Reid also made a mark for himself with GlaxoSmithKline (GSK), following his internship with the company, Reid started a one year contract position as a Medical Affairs Associate, and within eight months into his contract, Reid was hired full time as a General Territory Representative with GSK’s Respiratory Sales Force in Mississauga.

CONTINUED GROWTH AND INVESTMENT Mississauga’s life sciences community is not only investing in talent but also in new technology and infrastructure, and the sector continues to gain strength and global expo-

24 BIOTECHNOLOGY FOCUS December 2013/January 2014

sure as leading international companies such as Therapure Biopaharma Inc. and Roche Canada continue to re-invest and expand its operations in Mississauga. Therapure opened a new manufacturing wing at its Mississauga facility that will develop and manufacture high quality, complex biological therapeutics for global markets. The facility expansion is expected to create 100 new jobs, bringing the total number of employees to over 200 in 2014. The new 130,000 sq. ft. facility includes manufacturing, research and quality-control laboratories and its advanced production capabilities are attracting new clients from around the world. Furthermore, Roche Canada opened the doors to its new Global Pharmaceutical Development site, which plays a leadership role in worldwide clinical trials. The project involved an investment by Roche of more than $190 million and has resulted in a growth from 76 to 236 people in pharmaceutical development. The expansion project reflects the commitment of Roche to build long-term prosperity and international leadership in life sciences and biopharmaceuticals. Today Mississauga is Canada’s sixth largest city with a population of 741,000 and is the third largest life sciences cluster with over 350 companies employing over 20,000 knowledge workers. This sector is strong, vibrant and a leading business component in the City that attracts highly-skilled scientific, technical and management personnel with post-secondary education from in and around Mississauga. To learn more about Mississauga’s life sciences sector, visit www.winthehumanrace.ca. To see this story online visit www.biotechnologyfocus.ca/ mississaugas-life-sciencessector/

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By Daniela Fisher

Innovation Island

Ten years ago, Singapore set out to build a biomedical sciences sector that would rival nations much larger and more established in the life sciences than itself. What followed was a decade of dedicated government funding and initiatives to draw leading researchers and companies to Singapore. This has paid off big for the city-state: it’s become a world-renowned biomedical hub and a growing base for biotechnology in Asia. In 2000, the Singapore government first designated biomedical sciences as one of four pillars of the economy along with electronics, engineering and chemicals. In just over 13 years, the city-state has created a top-notch biomedical research hub that’s home to more than 50 biomedical science companies and host to 30 of the world’s leading life science companies. This bio-cluster is the fastest-growing in Asia, with R&D activities in drug discovery, translational and clinical research. Its biomedical research focuses on clinical sciences, genomics, bioengineering, molecular/ cell biology,and immunology, as well as newer areas of medical devices, personalized medicine and nutrition. Singapore’s biomedical sector has seen remarkable growth. Its manufacturing output has grown close to fivefold, from $6 billion in 2000 to $29.4 billion in 2012. In 2012, the sector accounted for 5 per cent of the country’s gross domestic product (GDP).This success is no accident: Singapore’s combination of public and private sector investment, its business-friendly climate, and major international public-private partnerships have all played important roles in developing the sector.

World-class infrastructure Since making the life sciences a priority, Singapore’s government has created a number of organizations and councils to support both public and private research projects. These include A*STAR (The Agency for Science, Technology and Research) and the Ministry of Health’s (MoH) National Medical Research Council for public sector research initiatives.

For the private sector, companies have the Economic Development Board (EDB). The EDB’s Biomedical Sciences Group (BMSG) promotes private sector manufacturing and R&D activities, and its Bio*One Capital is the EDB’s investment arm for biomedical innovation. One of the main organizations leading the development of the sector is A*STAR. It’s Singapore’s lead agency for fostering scientific research and talent. The organization oversees 14 research institutes, as well as six consortia and centres located around two bioclusters: Biopolis and Fusionopolis. Both are located in one-north, a hotspot for research and innovation created by the JTC Corporation. The Biopolis complex is an international R&D centre. It houses key public and private biomedical research institutions. It’s also home to 40 corporate labs, and many global biotech and pharma companies.

International partnerships With offerings like a business-friendly environment, including intellectual property protection and low corporate tax rates, it can be understood why Singapore is an attractive spot for companies to set up operations. It offers the economic competitiveness and the political stability needed to generate trade, investments and partnership opportunities. These factors, combined with Singapore’s biomedical research excellence, have induced many global pharma companies to set up shop in Singapore. Sanofi-Aventis, GSK, Novartis and Sanofi have all set up their regional clinical trial centres in the city-state. Other companies are investing in Singapore’s human capital. For example, Roche established its Singapore Hub for Translational Medicine,with 30 scientists on board, to partner with Singapore’s scientific and medical institutions. Bayer Healthcare invested an additional S$14.5 million in projects with local academic institutions, to advance R&D for early diagnosis and treatment of cancer. Many leading biopharmas have made Singapore their global manufacturing base.

28 BIOTECHNOLOGY FOCUS December 2013/January 2014

These companies operate plants that manufacture a variety of active pharmaceutical ingredients (APIs), biologics and nutritionals. Baxter, Lonza, GSK and Roche have announced investments to set up major biologics facilitiesthat total US$2 billion in capital expenditure.

Doing business with Singapore So how can Canadian companies get in on the game? Recently, Ontario had a trade mission to Singapore, where Ontario delegates met with leaders in Singapore’s biomedical sciences sector. Dr. Patrick Tan is a principal investigator at the Genome Institute of Singapore and A*STAR. For Tan, the meetings held promise for partnerships in the future: “I felt that there was a good robust exchange of strengths and weaknesses from the different sides. This level of honesty is a great stepping stone to future deep collaborations.” Tan met with Ontario to share best practices on the development of personalized medicine. Post-meeting, there are possibilities for future collaboration, with A*STAR talking to the team at the Ontario Institute for Cancer Research (OICR), to learn more about their IT framework and software for personalized medicine. “I was very impressed by the progress the Ontario team has achieved in implementing novel technologies into personalized medicine,” said Tan. “Translating new research methods into actual clinical implementation is often challenging, and I certainly learnt a lot from their experiences in what (and what not) to do.” His advice for international delegates looking to do business with Singapore is to take the time to build up partnerships: “Don’t expect to clinch a deal on the first visit. Repeated exchanges are the best pathway to true results.” To see this story online visit http://biotechnologyfocus. ca/?p=9781

Dr. Patrick Tan

Spotlight on Singapore:

re: THE LAST WORD

By Peter Pekos

The Need for Sustainable Margins: A CMO’s Perspective

Peter Pekos, president and CEO, Dalton Pharma Services

Any notion of “healthy” gross margins may sound like romantic nostalgia from the distant past. The common margin descriptors of today are “razor thin,” “lean,” “squeezed,” “shaved” and “starvation.” A widespread view is that anything else is not consistent with the current reality for CMOs in the pharmaceutical industry. My dissenting argument is that the long term health of a CMO and of its clients depends on adequate gross margins for contracted projects. Current trends are making adequate margins more essential than ever before. They are absolutely necessary if a CMO is to provide the service level and compliance assurance that the new reality requires. A major part of the tension between vendors and clients over margins is that the latter do not fully understand that a substantial percentage of the gross margin must go into infrastructure and other costs which are not part of the CMO bottom line.

jor consideration for those of us who provide sterile fill services. If a failure is detected in regular process checks, the cost of finding and correcting the problem can escalate quickly. Upgrading worn production infrastructure is another major financial issue. Costs have escalated because retrofitting existing machinery is now seldom satisfactory and the CMO is faced with the acquisition of new equipment. A potential client came to us recently because of serious compliance issues with his current CMO. When told that the cost per unit for his fill requirements would be in the order of $2.50, he was shocked. “How can you charge so much,” he asked. “I’ve been paying only $1.50 per unit.” The answer is simple. At the $1.50 price, his old CMO was incapable of meeting current compliance requirements and that is why he was forced to find a replacement. The reality is that his vendor had probably been struggling with low margin business for some time, or had mismanaged decent marA trend that shows no sign of abating is that sponsors, gins by putting too much toward the bottom line. Chronic the FDA, EMEA and other regulatory agencies neglect of infrastructure and increasingly view the CMO as the gatekeeper of quality. operations compliance always catches up with CMOs A simple illustration of infrastructure cost is the equip- and eventually causes business failure. The final blow ment for generating water-for-injection.This requires a is very often the identification by the regulatory body of boiler. In normal use, it must be replaced every 10 to 15 problems which the CMO decides are too costly to fix. A trend that shows no sign of abating is that sponsors, years. For Dalton’s scale of operations, a new boiler is $350,000. There are many other pieces of equipment with the FDA, EMEA and other regulatory agencies increassimilar or shorter lifetimes, from air handling units, filling ingly view the CMO as the gatekeeper of quality. It is machines, analytical tools and production machinery. In an inevitable consequence of the industry shift to the addition, we must allow for contingencies. This is a ma- virtual model and having many suppliers of components December 2013/January 2014 BIOTECHNOLOGY FOCUS 29

THE LAST WORD

on other continents. Although I am not uncomfortable with this, the higher level of compliance responsibility raises manufacturing costs and margins must reflect this. In ayout 1 1/31/2013 9:09 AM Page 1 my opinion, the increasing dependence of the client on the CMO for compliance is one of the most compelling reasons for clients to look beyond price in negotiations. I don’t expect the tension between CMOs and clients over margins to diminish, let alone disappear. Clients are under constant scrutiny by the financial community. For

developing companies, venture capital stresses cost management by executives. For established companies, continued paring of costs is a key component for maintaining revenues in the face of payer pressure on drug prices and loss of exclusivity. Of course this leads to pressure on suppliers. For their part, CMOs must constantly work to develop cost-saving efficiencies. My point is that those who believe that the supplier should accept starvation margins yet have total responsibility for everything are both

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unrealistic and short-sighted. Approaching contract manufacturing as a commodity service simply can’t work in the context of the virtual model of capital efficiency. The CMO is a vital link in the supply chain. What I look for are clients who have a partnership orientation. I never expect price negotiations to be easy, but we know what margins are necessary for an ongoing, healthy CMO business. We have learned not to chase potential clients who are focussed mainly or exclusively on price. They typically insist on multiple rounds of quotes with decreasing margins based on quotes from other vendors. In most of the early and mid-stage projects that we are involved the contracts are not simply cost plus arrangements but involve significant risk sharing. The ideal client is one which is genuinely interested in an appropriate distribution of risk according to individual capacity in a spirit of fairness. Balancing risk sharing relationships is not easy but we have learned a great deal over the past decade. The most satisfying business relationships have been contracts which irrevocably bound Dalton and the client, typically for a period of five years. When difficulties arise, we work through the challenges together because there is no practical option to do otherwise. An adage heard in some circles is that the North American CMO is doomed to extinction because of offshore competition. I certainly don’t believe it. Dalton is currently making a large capital investment to increase capability and capacity, and we are also making investments to ensure that we will meet future requirements for compliance. The trend toward focused therapies for smaller patient segments should over the long term increase the pool of potential clients for small and mid-size CMOs. I am encouraged to see in my current client base a growing understanding that thin margins are not sustainable. Our goal must be a healthy ecosystem in which all players have the opportunity to prosper as we work together to develop innovative therapies to help humankind.

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