INSIGHTS FOR THE LIFE SCIENCE INDUSTRY
ORPHAN DRUGS&
RARE DISEASES
FEBRUARY/MARCH 2014 VOLUME 17, NUMBER 1
CARING FOR CANADA’S MOST VULNERABLE CITIZENS THROUGH A NATIONAL PLAN FOR RARE DISORDERS
INSIDE:
Publication Mail Registration Number: 40052410
FLUIDIGM SCOOPS UP CANADIAN FIRM DVS SCIENCES
Speed, precision, flexibility and innovation characterizes the instruments manufactured by Analytik Jena AG. Analytik Jena offers a wide product variety of thermal cyclers as well as real-time thermal cyclers. World-leading devices for standard applications, especially the rapidPCR systems, provides convenience due to considerably high speed and high precision. In less than 25 minutes whole real-time PCR plots can be monitored and analyzed with integrated software qPCRsoft. Now available through VWR Canada. Call us today for more information.
Request a FREE DEMO from a VWR Life Science Specialist today! Call: 1800-932-5000 or Email: canada_marketing@vwr.com
contents February/March 2014 – VOLUME 17 – NUMBER 1
14 Changing the conversation about access to cancer drugs
FEATURES
12 A National Plan for Orphan Drugs Caring for Canada’s most vulnerable citizens through a national plan for rare disorders (By Durhane Wong-Rieger and Christine Beyaert) Opinion
14
Pan-Canadian Oncology Drug Review
Evidence-based recommendations to guide funding decisions regarding cancer drugs (By Mona Sabharwal)
16 The birth of a systems biology powerhouse Fluidigm acquires Canadian firm behind “game changing” CyTOF™ Mass Cytometer (By Shawn Lawrence)
20 Five key tips for developing
12 Orphan Drug Policy in Canada
orphan products David Shoemaker shares five tips to accelerate approval for orphan drug products (Compiled by Biotechnology Focus)
DEPARTMENTS 6
Research news
IN EVERY ISSUE
9
Business corner
22 Across Borders
A Biotechnology Focus special report posing the question: Is Canadian Biotech coming to Life? (By Tony Pullen)
28 Calendar of events
8 Research news
Amorfix CSO leads the way for ALS research www.biotechnologyfocus.ca
30 The Last Word
University labs are a storehouse of top-notch research capability (By Gilles Patry)
February/March 2014 BIOTECHNOLOGY FOCUS 3
PUBLISHER’S NOTE
PUBLISHER/ EDITOR-IN-CHIEF SENIOR WRITER STAFF WRITER
Tommy Douglas once said, “Courage, my friends: ‘tis not too late to build a better world.” As the father of Medicare, Douglas was one of the first to shape Canada’s healthcare system as we know it today. While our public healthcare system is the envy of many countries, we’ve fallen behind in an important area: orphan drugs. For starters, Canada was the last developed country to adopt an orphan drug policy and not surprisingly, we’re lagging in our care and treatment for those with rare diseases. And while we’ve made progress in the past few years, it’s time to kick up the pace and build a better world for Canadians with rare disorders. This issue of Biotechnology Focus focuses on the orphan drug landscape in Canada, where are we now and what needs to change? Durhane Wong-Rieger and Christine Bayaert explore Canada’s current rare disease environment, and the need for a national plan for rare disorders. While Health Canada announced an Orphan Drug Regulatory Framework in October 2012, it is just the first step of many that need to be taken. Some of the major industry stakeholders are developing a framework for a Canadian Strategy for Rare Diseases that will help ensure the most efficient and cost-effective way to provide care. In addition to the orphan drug piece, Dr. Mona Sabharwal looks to change the conversation about access to cancer drugs. Her article examines the pan-Canadian Oncology Drug Review (pCODR). pCODR is a national initiative aimed at making the cancer drug review process more open, efficient, and consistent across the provinces and territories. Dr. Sabharwal reports on how pCODR is raising the bar for reviewing new drugs and technologies in Canada. In other industry news, Tony Pullen looks at the past, present and future of the capital markets for Canadian biotech. He highlights financing success stories and companies to watch in the coming years, in his article “Is Canadian biotech coming to life?” One only needs to read Shawn Lawrence’s article on Fluidigm’s recent purchase of Canadian mass cytometry firm DVS Sciences to see that Pullen is pretty much on the mark with his insight that Canada is starting to make strong advances in attracting foreign interest. Rounding out the line-up is Dr. Gilles Patry, president and CEO of the Canada Foundation for Innovation. He looks at why businesses should think seriously about tapping into the exceptional research capability available in university labs across the country. We hope you enjoy this issue, and be sure to visit us at www.biotechnologyfocus.ca.
Shawn Lawrence Daniela Fisher
CONTRIBUTING WRITERS
Christine Beyaert
David Shoemaker
Durhane Wong-Rieger
Mona Sabharwal
Building a better framework
Terri Pavelic
National Account Manager GRAPHIC DESIGNER CONTROLLER MARKETING MANAGER
Tony Pullen Marcello Sukhdeo Elena Pankova John R. Jones Mary Malofy
CIRCULATION DIRECTOR James Watson circulation@promotive.net Tel: 705-812-0611
EDITORIAL ADVISORY BOARD Celine Bak, Analytica Advisors; Rob Henderson, BioTalent Canada; Najla Guthrie, KGK Synergize; Pierre Bourassa, IRAP, Montréal; Murray McLaughlin, Sustainable Chemistry Alliance; Carol Reynolds, AdFarm; Ulli Krull, UTM; John Kelly, KeliRo Company Inc.; Peter Pekos, Dalton Pharma Services; Brad Thompson, Oncolytics; Darrell Ethell, CanReg; John Hylton, John H. Hylton & Associates; Robert Foldes, Viteava Pharmaceuticals Inc.; Randal R.Goodfellow, P.Ag., Senior Vice President, Corporate Relations, Ensyn; Bob H. Sotiriadis, Robic LLP; Dale Patterson, Genome Canada; Darcy Pawlik, Syngenta Seeds Canada Inc; Gail Garland, OBIO; Barry Gee, CDRD; Bonnie Kuehl, Scientific Insights Consulting Group Inc.; Raphael Hofstein, MaRS Innovation Biotechnology Focus is published 10 times per year by Promotive Communications Inc. 24-4 Vata Court, Aurora, Ontario L4G 4B6 Phone 905-727-3875 Fax 905-727-4428 www.biotechnologyfocus.ca E-mail: biotechnology_focus@promotive.net Subscription rate in Canada $35/year; USA $60/year; other countries $100/year. All rights reserved. No part of this publication may be reproduced without written consent. Publications Mail Registration Number: 40052410 Return undeliverable Canadian addresses to: circulation dept – 24-4 Vata Court, Aurora, Ontario L4G 4B6 National Library of Canada ISSN 1486-3138 \ All opinions expressed herein are those of the contributors and do not necessarily reflect the views of the publisher or any person or organization associated with the magazine.
If you would like to order hard copy or electronic reprints of articles, contact Sandra Service 905-727-3875 x221 reprints@promotive.net
4 BIOTECHNOLOGY FOCUS February/March 2014
Ch
Cr
1
Children’s MiraCle network funds
14
Children’s
hospitals
aCross Canada
eaCh day, there are
4,900
Children
CritiCal priority needs for
who rely on the support of Children’s MiraCle network
MeMber hospitals in Canada
What is Children’s Miracle Network? Children’s Miracle Network® raises funds for 170 children’s hospitals in North America, 14 of which are in Canada. These hospitals, in turn, use the money where it’s needed the most. When a donation is given, it stays in the community, ensuring that every dollar is helping local kids. These donations have gone to support critical research and training, purchase life-saving equipment, and ensure excellence in care - all in support of our mission to save and improve the lives of children.
Learn more at: ChildrensMiracleNetwork.ca
R & D NEWS
Dr. John Dick
Team led by Dr. John Dick discovers pre-leukemic stem cell at root of AML and relapse
A team of cancer researchers led by Dr. John Dick, a senior scientist at the University Health Network (UHN) and director of the Cancer Stem Cell Program of the Ontario Institute for Cancer Research, have discovered a pre-leukemic hematopoietic stem cell that may be the first step in initiating the disease and also the culprit that evades therapy and triggers relapse in patients with acute myeloid leukemia (AML). The research, published in Nature is a significant leap in understanding the steps that a normal cell has to go through as it turns into AML, says Dr. Dick, and sets the stage to advance personalized cancer medicine by potentially identifying individuals who might benefit from targeting the preleukemic stem cell. AML is an aggressive blood cancer that the new research shows starts in stem cells in the bone marrow. These cells survive chemotherapy, may acquire mutations and thereby could be responsible for relapse. “Our discovery lays the groundwork to detect and target the pre-leukemic stem cell and thereby potentially stop the disease at a very early stage when it may be more amenable to treatment,” says Dr. Dick, who also holds a Canada Research Chair in Stem Cell Biology. A pioneer in the 6 BIOTECHNOLOGY FOCUS February/March 2014
cancer stem cell field, Dr. Dick first identified leukemia stem cells (1994) and colon cancer stem cells (2007). “Now we have a potential tool for earlier diagnosis that may allow early intervention before the development of full AML. We can also monitor remission and initiate therapy to target the pre-leukemic stem cell to prevent relapse,” Dr. Dick adds. The findings show that in about 25 per cent of AML patients, a mutation in the gene DNMT3a causes pre-leukemic stem cells to develop that function like normal blood stem cells but grow abnormally. These cells survive chemotherapy and can be found in the bone marrow at remission, forming a reservoir of cells that may eventually acquire additional mutations, leading to relapse. The discovery of pre-leukemic stem cells came out of the work of a large leukemia disease team that Dr. Dick assembled and included oncologists who collected samples for the Princess Margaret Cancer Centre Biobank and genome scientists at the OICR who developed sophisticated targeted sequencing methodology. With this team, it was possible to carry out genomic analysis of more than 100 leukemia genes on many patient samples. The findings also capitalized on data from more than six years of experiments in Dr. Dick’s lab involving growing human AML in special mice that do not reject human cells. “By peering into the black box of how cancer develops during the months and years prior to when it is first diagnosed, we have demonstrated a unique finding. People tend to think relapse after remission means chemotherapy didn’t kill all the cancer cells. Our study suggests that in some cases the chemotherapy does, in fact, eradicate AML; what it does not touch are the pre-leukemic stem cells that can trigger another round of AML development and ultimately disease relapse,” says Dr. Dick, who anticipates the findings will spawn accelerated drug development to specifically target DNMT3a. These findings should also provide impetus for researchers to look for pre-cancerous cells in AML patients with other mutations and even in non-blood cancers. To see this story online visit http://biotechnologyfocus.ca/team-ledby-dr-john-dick-discover-pre-leukemicstem-cell-at-root-of-aml-and-relapse/
Clinical Trials & Patents n Biopharmaceutical company Qu Biologics Inc. (Vancouver, BC) says its Crohn’s disease clinical trial is now accepting participants from the U.S. Sixty adults with active moderate-to-severe Crohn’s disease are being recruited to evaluate Qu Biologics’ investigational new treatment, QBECO SSI, for Crohn’s disease. A maximum of 30 U.S. patients will be allowed to participate in this Phase 1/2 trial, located in Vancouver, BC. The main purpose of the study is to test whether the investigational treatment is safe and effective for the treatment of Crohn’s disease. The company also announced it has been granted its second broad Australian patent for the targeted treatment of various cancers, including all common cancers. Qu Biologics has been issued Australian Patent No.2007308721. The granted patent involves the tissue-targeted activation of the immune response to treat cancers. The patent encompasses formulations of killed viruses to stimulate this site specific anti-tumour immune response. n Quest PharmaTech Inc. (Edmonton, AB) has entered into a license agreement with U.S. based Oncovir, Inc. (Washington, DC) to evaluate the clinical utility of combining Quest’s antibody immunotherapy technology with Oncovir’s immune activator Hiltonol® in a twenty patient ovarian cancer Phase 2 clinical trial. The trial will be conducted in Rome, Italy under the direction of professor Roberto Angioli of University Bio Medico. Oncovir will provide the needed drug, appropriate technical expertise and relevant data to support the regulatory process necessary to conduct the clinical trial. Hiltonol® (Poly ICLC) is a TLR-3 agonist that has been shown to have specific anti-tumour and anti-viral actions. It has shown to enhance activity of multiple cancer and HIV vaccines. As a result, Oncovir currently has over two dozen recently completed or ongoing Phase 1 or 2 investigator initiated, collaborative clinical trials, using Hiltonol® alone or in combination with other agents. Several hundred patients have been safely treated to date and another dozen trials are in various stages of planning or submission. n Concordia Healthcare Corp. (Toronto, ON) subsidiary Pinnacle Biologics, Inc. has reached an agreement with the U.S. Food and Drug Administration under a special protocol assessment to enroll patients with an advanced form of bile duct cancer in a pivotal Phase 3 clinical trial. There is currently no approved therapy for this cancer type. The clinical trial will study the efficacy and safety of photodynamic therapy with PHOTOFRIN® (porfimer sodium) for injection as treatment for unresectable advanced perihilar cholangiocarcinoma (CCA) Bismuth type III/IV.
For more R&D news visit http://biotechnologyfocus.ca/ category/bio-pharma/
R & D NEWS Two UBC Faculty of Medicine diabetes researchers are helping to launch the western expansion of the JDRF Canadian Clinical Trial Network. Timothy Kieffer, a professor in the Department of Cellular and Physiological Sciences, and Rusung Tan, a professor in the Department of Pathology and Laboratory Medicine, are two of the three scientists to share in $3 million being provided by JDRF Canada to accelerate translational research into new treatments for diabetes. The Canadian Clinical Trial Network (CCTN) was launched in 2009 with $33.9 million from the federal government and the JDRF. The WB Family Foundation contributed an additional $3 million in 2012, enabling the expansion of the CCTN beyond Ontario, where it was originally based. Dr. Kieffer, a member of the Life Sciences Institute, will explore the potential of using human embryonic stem cells (hESCs) to develop into functional, insulin-producing beta cells in the pancreas. Dr. Kieffer has already demonstrated that hESC-derived islets can reverse diabetes in mice, and can even respond to fluctuating levels of insulin in the bloodstream, just as normal beta cells do. The CCTN funding will enable him to investigate the efficacy of an encapsula-
tion device – which he likens to a “teabag” – that would enable insulin to flow to and from the beta cells, allowing them to respond to the fluctuating insulin levels while preventing the intrusion of T-cells that would destroy the islets. If it works, it would eliminate the need for chronic immunosuppression. “We want to cure diabetes,” Dr. Kieffer said. “Not treat it – we want to cure the disease. The beauty of our approach is we can grow enough cells to treat everyone with diabetes.” Dr. Tan, the director of the Immunity in Health Disease research cluster at the Child and Family Research Institute, will use the funding to perform human clinical trials on ustekinumab, a humanized monoclonal antibody currently used for severe cases of psoriasis. Ustekinumab inhibits the immune cells that attack the skin in psoriasis, and Dr. Tan and his team are hoping it will do the same with the T-cells that attack beta cells in the pancreas, if it’s administered early enough. By doing so, Dr. Tan hopes to prolong the period that diabetes patients can avoid insulin treatment. The year-long pilot study will enroll young adults (18 years or older) starting this spring, and will last a year, examin-
Timothy Kieffer
UBC helps expand diabetes clinical trial network
ing the drug’s safety in diabetes patients and measuring its effect on immune and blood sugar levels. When that is complete, they plan to extend the trial to adolescents, 13 to 18 years old. To see this story online visit http://biotechnologyfocus.ca/ubchelps-expand-diabetes-clinical-trialnetwork/
Viteava Pharmaeuticals to back McGill University research
Viteava Pharmaceuticals Inc. has reached a sponsored research agreement with McGill University relating to novel analogs and derivatives of the green tea flavonoid, (-) epigallocatechin-3-gallate (EGCG). Matching funds have been received from the Canadian Institutes of Health Research Proof of Principle Phase 2 (CIHR POPII) program. Professor Tak-Hang Chan of McGill University will be the principal investigator in the collaboration along with professor Q. Ping Dou of Wayne State Uni-
versity and the Karmanos Cancer Institute. Professor Chan was the only successful recipient of funding under the Fall 2011 competition of the CIHR POPII program. “Competitive grants such as the CIHR POPII program provide important validation for the potential importance of this class of drug candidates, and represent a source of funding that is a life-line for start-up companies,” said Robert Foldes, Viteava’s founder and CEO. The research agreement will focus on the preclinical development of VPE001, a proprietary pro-drug of EGCG, as well as additional characterization in animal models of cancer. The funding will be used to optimize the synthesis and characterize two back-up drugcandidates. “We are grateful to CIHR for their support, as this funding is critical for helping us to advance VPE001 much closer to initiating human clinical studies,” said professor Chan. Viteava also announced funding support from VentureStart, a program that provides services and matching funds for qualified
entrepreneurs in southern Ontario. Coordinated by the RIC Centre, VentureStart received $7.5 million through the Federal Economic Development Agency for Southern Ontario program (FedDev Ontario). The program is delivered by the regional innovation centres in the Ontario Network of Entrepreneurs (ONE). Through this program, Viteava also receives business support and mentoring through an executivein-residence at MaRS. To see this story online visit http://biotechnologyfocus.ca/viteavapharmaeuticals-to-back-mcgill-universityresearch/
Correction notice: The cover photo in the December/January issue of Biotechnology Focus, as well as photos on page 10, 12,14,15 and 16 are courtesy of Catherine J Capek Photography.
February/March 2014 BIOTECHNOLOGY FOCUS 7
R & D NEWS
Amorfix Life Sciences’ chief scientific officer Dr. Neil Cashman is leading the charge against ALS, publishing the results of a ground-breaking study that shows how ALS spreads throughout the body in the journal the Proceedings of the National Academy of
Sciences. The findings have strong implications for developing new therapeutics for treating the disease. Dr. Cashman’s earlier studies have shown that misfolded superoxide dismutase 1 (mSOD1) is associated with and likely causal
to ALS. In addition, the misfolded molecule can cause native SOD1, normally protective to cells, to misfold and kill nerves instead of protecting them. This is the so-called Jekyll and Hyde phenomenon, where a molecule with beneficial properties misfolds and becomes a molecule that harms the body. The results of Dr. Cashman’s current study show that mSOD1 is not only able to induce misfolding of native SOD1, but can also spread throughout the nervous system. This leads to the progressive neurological damage seen in ALS. Amorfix has been able to produce therapeutic antibodies that bind and neutralize only the misfolded protein and not its native SOD1. The antibodies remove the harmful molecule and allow the SOD1 to continue to function normally. According to Amorfix, these results suggest that therapeutic antibodies have the potential to inhibit the spread of neurological damage in ALS and halt disease progression. To see this story online visit http://biotechnologyfocus.ca/amorfixcso-leads-the-way-for-als-research/
Scientific paper reports Theralase compounds destroy bacteria in low oxygen environments Theralase Technologies Inc. reports that a recently published scientific paper indicates that its new family of Photo Dynamic Compounds (PDCs) are able to destroy two types of bacteria (Staphylococcus aureus (s. aureus) and Methicillin Resistant Staphylococcus aureus (MRSA)) in low oxygen atmospheres. The results are considered pivotal because they validate Theralase PDCs efficacy in both normal and low oxygen environments and shows that they are able to be used in both bacteria and cancer destruction. According to Dr. Arkady Mandel, chief scientific officer of Theralase Inc., the technology could offer a new paradigm for destruction of low oxygenated cancerous tumours because of its ability to be effective in low oxygen environments, specifically against nonmuscle invasive bladder cancer. “This form of disease represents up to 75 per cent of newly diagnosed bladder cancer cases accounting for more than
8 BIOTECHNOLOGY FOCUS February/March 2014
386,000 cases and 150,000 deaths annually worldwide. The abnormal decrease or the lack of oxygen supply to cells and tissues is called hypoxia and commonly presents in solid cancers, such as brain, bladder, breast, lung and prostate. Hypoxic cancers are extremely aggressive, resistant to standard therapies (chemotherapy and radiotherapy), and thus very difficult to destroy. Tumour hypoxia is known to play a role in cancer metastasis (spread) and resistance to therapy, as well as the ability of cancer cells to escape destruction by the immune system.” Dr. Mandel adds that the evidence supporting the Theralase PDC technology represents a potential solution for such hypoxic cancers.
The Theralase team plan to initiate a Phase 1/2 clinical trial with these compounds in 2015. To see this story online visit http://biotechnologyfocus.ca/scientific-paper-reports-theralase-compoundsdestroy-bacteria-in-low-oxygenenvironments/
Methicillin Resistant Staphylococcus aureus (MRSA)
Dr. Neil Cashman
Amorfix CSO leads the way for ALS research
R & D NEWS Molecular aberration could signal cancer
SFU’s Steven Jones, the associate director and head of bioinformatics at the B.C. Cancer Agency’s Genome Sciences Centre, has co-discovered a breakthrough in cancer causes and survival rates. Photo credit: Simon Fraser University Several scientists, including one at Simon Fraser University, have made a discovery that strongly links a little understood molecule, which is similar to DNA, to cancer and cancer survival.
EMBO reports, a life sciences journal published by the European Molecular Biology Organization, has published online the scientists’ findings about small non-coding RNAs. While RNA is known to be key to our cells’ successful creation of proteins, the role of small non-coding RNAs, a newly discovered cousin of the former, has eluded scientific understanding for the most part. Until now, it was only surmised that most of these molecules had nothing to do with protein production. However, scientists at SFU, the University of British Columbia and the B.C. Cancer Agency have discovered that many non-coding RNAs are perturbed in cancerous human cells, including breast and lung, in a specific way. The disturbance, which manifests itself as shorter than normal molecular messaging, also occurs at a specific spot on genes. “These two identifiable characteristics give cancer-causing non-coding RNAs a chemical signature that makes it easy for scientists to identify them in the early stages of many different types of cancer,” says Dr. Steven Jones. The SFU molecular biology and biochemistry professor is the study’s senior author,
and the associate director and head of bioinformatics at the B.C. Cancer Agency’s Genome Sciences Centre. “These molecules’ existence can also be used to classify cancer patients into subgroups of individuals with different survival outcomes,” adds Jones. “While the precise reason why a tumour would change the behaviour of genes in this way is not known, it is likely that it represents a mechanism by which the cancer can subvert and takeover the normally well controlled activity of our genes.” This study uncovered non-coding RNAs’ cancerous role by using high-throughput sequencing techniques to analyse reams of genetic information on normal and diseased tissue as part of the Cancer Genome Atlas project. The Cancer Genome Atlas is an ambitious project to characterize the genetic material of more than 500 tumours from more than 20 different cancers. The project provides a goldmine of data for bioinformaticians such as Jones. To see this story online visit http://biotechnologyfocus.ca/molecularaberration-could-signal-cancer/
BUSINESS CORNER Feds announce $300 million venture catalyst fund of funds; Ontario a player in new fund Canada’s federal government along with the Ontario government have announced the launch of the Northleaf Venture Catalyst Fund, a new fund of funds with a target of $300 million that will invest in early and mid-stage technology companies. Ontario Premier Kathleen Wynne was at Communitech in Waterloo recently to discuss Ontario’s participation in the fund. In addition to federal and provincial involvement in the fund, partners include corporate and institutional investors. Premier Wynne believes the Northleaf Venture Catalyst Fund will reinforce Ontario’s position as a North American leader in venture capital and attract investment to the province. Attracting new investments to the province is part of Ontario’s economic plan to grow the economy and create jobs by investing in people, building modern infrastructure and supporting
a dynamic and innovative business climate. “We want to continue to attract investments to Ontario and support our most innovative companies. Funds like these are a great tool to help companies access the capital they need to grow, create more good jobs and expand into global markets,” she said. The fund will be managed by Torontobased Northleaf Capital Partners. Ontario and the federal government have each committed up to $50 million to the fund. It is modeled after the Ontario Venture Capital Fund, an innovative partnership Ontario pioneered. According to the Ontario government, since it first launched the Ontario Venture Capital Fund in 2008, it has attracted $872 million in private sector capital while creating and retaining 1,500 jobs in the province. The Northleaf Venture Catalyst Fund had
its first closing with a total value of over $217 million in commitments, which could rise to $300 million as additional private sector partners invest in the fund. To see this story online visit http://biotechnologyfocus.ca/ feds-announce-300-million-venturecatalyst-fund-of-funds-ontario-aplayer-in-new-fund/
February/March 2014 BIOTECHNOLOGY FOCUS 9
BUSINESS CORNER BDC teams up with CVCA to find Canada’s most innovative start-up
The Business Development Bank of Canada (BDC), in partnership with Canada’s Venture Capital & Private Equity Association (CVCA), have launched the BDC Innovation Award. The new award will recognize an earlystage Canadian company that has demonstrated the ability to bring innovation to market, reshaping a sector or industry in a new or unexpected way. Innovation may be a catch phrase these days, but the reality is, it can pay off big for a company. In fact, almost three out of four small and medium enterprises (SMEs) in Canada that invested in innovation realized both a rise in sales and market share, according to a recent report by Industry Canada. “Canada’s entrepreneurs are the driving forces behind new businesses that can bring new ideas to market in our country,”
said Canada Minister of State (Small Business and Tourism) (Agriculture) Maxime Bernier. “This award, created as a result of Economic Action Plan 2013, is one way we can recognize their efforts, while also encouraging the next generation of entrepreneurs to keep thinking outside the box.” Nominations for this inaugural edition of the award are open until April 4, 2014 and the winning start-up will be honoured at the 2014 CVCA Annual Conference in Ottawa from May 20 to 22, 2014, where they will have the opportunity to meet with some of Canada’s most successful investors, entrepreneurs and business leaders. “We are delighted to be partnering with BDC to present this award,” said Peter van der Velden, president of the CVCA and Man-
Vétoquinol to acquire Bioniche animal health business Bioniche Life Sciences Inc. has sold its animal health division to Vétoquinol, a French company for $61 million in a share purchase agreement. Vétoquinol is a global player in the animal health sector serving both the livestock (cattle and swine) and pet (dogs and cats) markets. Vétoquinol designs, develops and sells veterinary drugs and non-medicinal products in Europe, the Americas and the Asia Pacific region. The boards of directors of both companies have approved the agreement, with notice of a special Bioniche shareholder meeting forthcoming. The agreement remains subject to the approval by shareholders of Bioniche Life Sciences Inc., and the usual closing conditions for a transaction of this type. “In May, 2013, Bioniche Life Sciences Inc. began a formal process to divest our animal 10 BIOTECHNOLOGY FOCUS February/March 2014
health business,” said Dr. Michael Berendt, CEO of Bioniche Life Sciences Inc. “This divestment is the logical progression of our corporate strategy to create a well-capitalized company focused on human health. Our goal is the successful commercialization of our Phase 3 bladder cancer therapy, Urocidin™, and the addition of another oncology asset to our development pipeline,” he added. The Bioniche Animal Health divestment process was led by Evercore, a U.S.-based independent advisory firm that specializes in merger and acquisition transactions, divestitures and restructurings. To see this story online visit http://biotechnologyfocus.ca/ vetoquinol-to-acquire-bioniche-animalhealth-business/
aging General Partner of Lumira Capital. “In an increasingly competitive and challenging world, innovation is an essential ingredient to any entrepreneur’s success. Recognizing these individuals for their contributions along that journey is essential.” BDC and the CVCA are natural partners for this award with a complimentary set of offerings for start-ups – cash and knowledge. BDC is the only Canadian bank dedicated exclusively to entrepreneurs and CVCA represents the majority of private equity companies in Canada, with over 2,000 members representing more than $105 billion in capital under management. This new award also ties in logically with BDC’s role in supporting early-stage tech companies, especially with the work it has been undertaking with some of Canada’s leading accelerators and incubators, such as Growlab, Extreme Startups, HYPERDRIVE, FounderFuel, Propel ICT and Execution Labs. The BDC Innovation Award is one of four new entrepreneurship awards BDC is launching this year. Eligibility criteria can be found at www.bdc.ca/awards. Also, look for updates on Twitter (@BDC_News & @BDC_ VC) and BDC Entrepreneur on Facebook. To see this story online visit http://biotechnologyfocus.ca/bdcteams-up-with-cvca-to-find-canadas-mostinnovative-start-up/
BUSINESS CORNER Aurinia Pharmaceuticals completes $56 million private placement Victoria-based biotech company Aurinia Pharmaceuticals Inc. has completed a $56 million private placement. The company says it intends to use the net proceeds from the offering to advance clinical and nonclinical development of its lead drug candidate, voclosporin, a drug for treating lupus-related kidney infection. The offering represents the largest traditional PIPE (private investment in public equity) financing by a life sciences company in Canadian history. The financing was led by venBio, New Enterprise Associates (NEA), Redmile Group, RA Capital Management, Great Point Partners, and Apple Tree Partners, with participation from various other institutional investors, including existing shareholders Lumira Capital, ILJIN Life Science Co. Ltd. and Difference Capital. To see this story online visit http://biotechnologyfocus.ca/auriniapharmaceuticals-completes-56-millionprivate-placement/
Canadian biotech sees rare IPO Vancouver-based Aquinox Pharmaceuticals Inc., a clinical-stage pharmaceutical company, has filed an initial public offering on the Nasdaq. The company filed in late January with the United States Securities and Exchange Commission to raise $58 million through an initial public offering of common stock under the symbol AQXP. There have been a number of IPOs by biotechs in the U.S. recently, but these types of transactions have been non-existent in the Canadian biotechnology and life sciences market. Aquinox shareholders include Ventures West (25.8% pre-IPO stake), Johnson & Johnson Development Corp. (23.8%),
Baker Brothers (12.9%), Pfizer Inc. (16.5%), Augment Investments (8.1%) and BC Advantage Fund (7.3%). The company raised $25 million in series B financing in 2010 and another $18 million in April 2013. Aquinox’s lead drug candidate, AQX1125, has several potential applications. The drug is currently in Phase two clinical trials for treating chronic obstructive pulmonary disease and chronic bladder disease. The company was spun out of research at the University of British Columbia and BC Cancer Agency in 2003. To see this story online visit www.biotechnologyfocus.ca/canadianbiotech-sees-rare-ipo/
Dealmakers Revive Therapeutics Ltd. (Toronto, ON) has signed a material transfer agreement (MTA) with a global pharmaceutical company headquartered in Osaka, Japan. Pursuant to the MTA, Revive will obtain access to confidential information and clinical trial supply of the drug bucillamine for Revive’s human clinical trial of REV-002, a potential new treatment for gout. In return, the global pharmaceutical company will have exclusive commercialization rights in Japan, Korea and Taiwan, and Revive will have exclusive commercialization rights in the rest of the world.
n
Medical diagnostic company Miraculins Inc. (Winnipeg, MB) and Alere Inc. (Waltham, MA) say they are electing not to proceed further in the direct commercial development of a professional diagnostic product for the biomarker Endoglin, but instead Alere will support Miraculins in seeking commercialization opportunities for Endoglin by supplying key antibodies that were developed by Alere. As part of this decision, Alere has declined to proceed further with its Endoglin license from Miraculins and the parties have agreed to work to enhance Miraculins’ rights to receive a secure supply of proprietary Endoglin reagents manufactured by Alere. Throughout the collaborative development program, Miracu-
n
lins has maintained the right to pursue complimentary commercial strategies for the Endoglin biomarker, which have included the rights to supply reagents for a Lab Developed Test (LDT). n Persistence Capital Partners (PCP) (Montréal, QC) has sold its Lab-Biomedic (LBM) operations and all of its Québec radiology operations under its Medvue Medical Imaging banner in two separate deals. LBM was sold to Gamma-Dynacare (Brampton, ON), a Canadian subsidiary of LabCorp, while its Quebec MRI operations were sold to Envision Diagnostics Inc. (Los Angeles, CA), a privately held diagnostic imaging provider. Acquired by PCP in 2010, LBM provides clinical laboratory services to medical clinics, corporate clients, insurance companies and clinical research organizations. It serves a broad range of eastern Canadian clients through its laboratories in Montréal and Québec City. Initially acquired by PCP in 2009, Medvue’s Québec radiology services are principally in magnetic resonance imaging (MRI) and include three clinics that provide full-range of general and specialty MRI services in Montréal and Laval. Following the sale, Gamma-Dynacare says it will continue to operate the business under the name Medvue Medical Imaging.
n Innovative Targeting Solutions Inc. (ITS) (Burnaby, BC), the developer of the next generation protein engineering technology (HuTARG™), announces the extension of its research collaboration with Amgen Inc. (Thousand Oaks, CA) that allows Amgen to internalize ITS’ HuTARG™ technology. Under the terms of the agreement, ITS is entitled to specific license payments and development milestones. n Emergent BioSolutions Inc. (Rockville, MD) has completed its acquisition of Cangene Corporation (Winnipeg, MB). Under the terms of the court-approved Plan of Arrangement, originally announced on December 11, 2013, Cangene stockholders will receive US$3.24 per share (C$3.601 per share) in cash, for an aggregate purchase price of US$222 million (approximately C$246 million). As a result of the completion of the transaction, shares of Cangene common stock were delisted for trading on the Toronto Stock Exchange, effective as of the close of trading on February 24, 2014.
For more Business Corner news visit http://biotechnologyfocus.ca/category/ industryintel/
February/March 2014 BIOTECHNOLOGY FOCUS 11
by: Durhane Wong-rieger and christine beyaert
ORPhAN DRUGS
caring for canada’s most vulnerable citizens through a national plan for
rare disorders
Every year, hundreds of Canadians with severe or life-threatening disorders do not get access to the medicines they need. What do these patients have in common? They all have rare disorders. It’s almost unbelievable but true. With a public health system that is the envy of much of the world, Canada sadly lags behind almost all other developed nations, including the U.S., the EU, Japan and Australia, in our care and treatment for rare disorders. We’ve made progress over the past few years but it’s time for Canada to stop making excuses and bring in a comprehensive plan that will give Canadians with rare disorders the same treatment as those with common ones.
A rare disorder is defined as a disorder that affects less than one in 2,000 Canadians. Many are severe, progressive, and/or life threatening conditions, with high mortality rates and devastating impacts on patients, families and society. Although individually rare, collectively, they affect one in 12 persons or 2.8 million Canadians. There are no effective treatments for many of these disorders. However, for many others, if infants or children are diagnosed and treated early enough, they can avoid physical disability or cognitive delays and live nearly normal lives. Rare disorders present unique public health challenges. Few physicians are familiar with diagnosing and treating these conditions, which means most patients are undiagnosed, misdiagnosed, or delayed in diagnosis, so they do not get timely access to treatments even when therapies exist. There are relatively few therapeutic options - between 7,000 and 8,000 rare disorders have been identified, but there are only 400 ef12 BIOTECHNOLOGY FOCUS February/March 2014
fective drug treatments. This situation is expected to change dramatically with hundreds of new therapies in development and coming to market over the next decade. But without change in our rare disease environment, many of these therapies will not be accessible for Canadian patients. Currently, Canadians tend not to be included in clinical trials and companies are reluctant to bring their drugs to Canada. Approximately half of the rare disease drugs available to patients in the U.S. or Europe have been approved in Canada and only half of these are funded through public drug plans. Currently, Canada’s regulatory and reimbursement systems present significant challenges to researchers and developers of drugs for rare diseases, also known as orphan drugs. On the federal regulatory side, the review process is about to change. In October 2012, Health Canada announced their intention to implement an Orphan Drug Regulatory Framework, a review process for orphan drugs that is similar to those of the U.S. and the European Union. Health Canada has indicated that this framework will include tools to improve the quality of knowledge used by provincial and territorial decision-makers and healthcare professionals, provide the opportunity for patient input, encourage transparency and sharing information, and support international collaboration. By harmonizing Canada’s orphan drug regulatory process with those of the U.S. and the EU, companies will be able to set up clinical trials and to apply
ORPhAN DRUGS urgent, one-off situations, they are not viable mechanisms to ensure to Canada for market approval at about the same time as they do in Canadians with rare disorders have sustainable access to appropriate these other jurisdictions, ultimately reducing delays and increasing therapy in a monitored and timely fashion. the number of new drugs available to Canadians with rare diseases. Just as important, getting drug reimbursement and access right for Unfortunately, a federal regulatory framework will not assure rare diseases will have big payoffs as we move into the era of perequal access across all provinces. Under Canada’s federated model, sonalized medicine for more common conditions. Our knowledge screening, diagnosis, care and treatment are the responsibility of about genetic bases for individual differences in large population individual provinces. With an aging population, there is an inevidisorders such as breast or prostate cancer, diabetes, circulatory table increase in both incidence and prevalence of chronic disease, conditions, and psychiatric disorders such as schizophrenia will which translates into greater demand for healthcare and greater result in identification of subgroups defined by genotype. What we use of medications. Provinces challenged by healthcare costs that are learning and pioneering in drug development and access for rare are increasing, on average by seven per cent each year, and drug diseases will someday benefit all patients. costs that are proportionately rising even faster, have placed more Over the past few years, Canada has made remarkable progress controls on drug prices and restricted access to new drugs. in the care and treatment of patients with rare diseases but, frankly, To those ends, all provinces (except Québec) have agreed to colwe still lag far behind most developed countries. The implementalaborate on a Common Drug Review (CDR) to assess the comparation of the Orphan Drug Regulatory Framework will have significant tive effectiveness and cost-effectiveness of new drugs and the panimpact, but it still lacks some of the provisions that will ensure pharCanadian Oncology Drug Review (pCODR) for oncology drugs. Both maceutical and biotech companies bring research and clinical trials will soon be operated under one umbrella, the Canadian Agency for to Canada, including a period of market exclusivity for innovative Drugs and Technologies in Health (CADTH). Their mandate is to drugs and tax incentives. Moreover, in order to realize the benefits make recommendations to the public drug plans on which drugs to of a regulatory framework, we need to follow the lead of the 27 EU reimburse, under what conditions and, often, at what price. Intended countries in bringing in a national plan for rare diseases. to reduce duplication and improve consistency across formulary listThe Canadian Organization for Rare Disorders (CORD) in colings, the common evaluation methods used by the processes have laboration with the Canadian Institutes for Health Research, Genome disadvantaged certain types of drugs, resulting in more negative Canada, BIOTECanada, and Rx&D are developing the framework for recommendations. These include drugs for small patient populations, a Canadian Strategy for Rare Diseases that will address the definition first-in-class drugs without comparators, early-market entry drugs for of rare diseases, research, diagnosis, care and support, and access severe or life-threatening conditions, or drugs that primarily impact to treatment. This strategy allows us to consider rare disorders in quality of life, such as pain management or psychological condithe context of a broader public health approach and builds upon tions. What is needed is an orphan drug access framework designed existing infrastructure, expertise, and programmes. Although Canada specifically to provide access to drugs for unmet needs as soon as has come late to the game, there is an opportunity for us build on they are approved by Health Canada. Known as managed access existing international experience and knowledge. schemes, risk-sharing schemes, or evidence building schemes, they Canadians with rare diseases have a right to the same health care provide appropriate patients reimbursed access to drugs with a monias those with more common conditions. A Canadian strategy for rare toring plan that accumulates evidence of safety, effectiveness, and diseases will help ensure the most effective and cost-effective way cost-effectiveness over time. Such schemes are already being used in to providing that care. Canada and most other countries, and are much more appropriate to rare disease drugs than the CDR or pCODR. Durhane Wong-Rieger is President and CEO, Canadian Organization for A new step in the process is the pan-Canadian Pricing Alliance Rare Disorders. Christine Beyaert is Manager, Corporate (PCPA), which negotiates a single price and listing conditions for a Communications, Ontario Genomics Institute new drug, on behalf of all participating provinces. The final decision about reimbursement, however, is still made by each provincial or territorial government, ostensibly on the basis of budget impact and To see this story online visit other factors. Because the latter two steps are not transparent – the http://biotechnologyfocus.ca/caring-forbasis for the negotiated price and the reimbursement decision are not canadas-most-vulnerable-citizens-throughpublicly available – it is not clear how different jurisdictions arrive a-national-plan-for-rare-disorders at their respective decisions. It remains to be seen whether the PCPA will reduce delays and improve consistency of access to rare disease drugs. Finally, many drugs for rare diseases fall outside Our knowledge of the established regulatory and reimbursement about genetic bases for pathways, so patient access is evaluated on a individual differences in large case-by-case basis. These include drugs that are not approved in Canada, are used offpopulation disorders such as breast label for a rare condition, or are not listed on or prostate cancer, diabetes, the drug formulary. Access may be requestcirculatory conditions, and psychiatric ed through Health Canada’s Special Access disorders such as schizophrenia Programme only for the named patient and the patient may additionally need to apply to will result in identification the provincial compassionate or exceptional of subgroups defined by access programme. These processes are inefgenotype. ficient, costly and time-consuming, for both the patient and the health care system. Designed for February/March 2014 BIOTECHNOLOGY FOCUS 13
by Dr. Mona Sabharwal
DRUG REVIEw POLIcY
pcodr:
changing the conversation about access to cancer drugs
On any given week, media headlines extoll the benefits of a new “breakthrough” cancer drug. For governments, they face the difficult task of deciding how best to allocate limited public resources and at the same time, ensure the sustainability of the health care system.
14 BIOTECHNOLOGY FOCUS February/March 2014
Prior to 2011, each province had its own process for evaluating and funding cancer drugs. This “patchwork” and often unpredictable approach made it difficult for patients and oncologists to find out if a particular drug was currently under review in their province, or if it had been approved or turned down for coverage, and how the decision had been made. Two years ago, in an effort to make the process more open, efficient and consistent, the provinces and territories (except Québec which retains its own system) came together to create the pan-Canadian Oncology Drug Review, or pCODR. Based in Toronto, the pCODR’s mandate is to provide the provinces with the same set of evidence-based recommendations to guide their funding decisions. Many have been affected by cancer, whether directly or through a loved one, a friend or a colleague. pCODR recognies the importance of its work and the process’s value to patients, governments and clinicians in evaluating cancer drugs using an evidence-based, rigorous and non-emotional approach. The new process eliminates duplication by
individual provinces and introduces a transparent, rigorous, consistent and collaborative approach that involves the input of patient advocacy groups, pharmaceutical companies, economists, ethicists and clinicians, and the provincial advisory group. The establishment of a pan-Canadian process also provides a single entry point for pharmaceutical companies to have their oncology product evaluated for public funding. The process begins when a pharmaceutical manufacturer or a group of cancer experts in a particular area of cancer, called a tumour group, submits a new drug for review. The submitter provides required information about the drug including how well it works and its cost-effectiveness. Once a submission has been accepted, pCODR draws from leading experts from across Canada to conduct the clinical and economic evaluation of the drug. Individuals who serve on the clinical guidance panel bring expertise in the type of cancer targeted by the drug whereas individuals on the economic guidance panel have experience in applied health technology assessment. Drawing on reports from the two guidance panels, pCODR’s expert review commit-
DRUG REVIEw POLIcY tee (known as pERC) formulates an initial recommendation. In its deliberations before making a recommendation, the committee applies a deliberative framework that considers the clinical effectiveness of the drug, its costs, patient-based values and adoption feasibility. An essential part of the process is hearing from those cancer patients who may be directly affected by a pCODR recommendation. Two patient representatives sit on the expert review committee to ensure that the patient voice is heard during its deliberations. Registered patient advocacy groups may also make a submission on a drug undergoing review. As of December 2013, close to 97 per cent of reviews have had patient input. “By coming forward and stating that certain side effects are acceptable or that patients are willing to trade off uncertainty for a chance at prolonged survival, we have helped the review committee to understand what outcomes patients are looking for and this has influenced how they frame their analysis,” said Annette Cyr, chair of Canadian Cancer Action Network’s Drug Review Working Group. All stakeholders that contributed at the start of the process for a specific drug or indication are invited to provide feedback on the initial recommendation before the final recommendation is arrived at. Recommendations include a “green light” to fund the drug or consider to fund it only if certain conditions are met (e.g. dependent on better pricing of the drug) or not to fund it. In keeping with its commitment to transparency, pCODR posts the status of each review on its website and explains the rationale behind its recommendations. Changes to timelines for a specific review (a need to gather additional information, for example) are noted on the site, along with the reason for the change. “Based on my experiences with pCODR, it’s clear that there’s a real level of respect and a commitment to collaborate openly with pharmaceutical companies throughout the review process, particularly during the ‘check-point’ meetings,” said Farzad Ali, director of Health Economics Outcome Research, Pfizer Canada. “At the end of the process, we may not always agree with the final recommendation. But we agree with how the decision was reached so there’s strong buy-in on the process.” The whole process takes about five to eight months but in exceptional cases, it may take longer. To have more timely recommen-
FAST FACTS: as of decemBeR, 2013, PcodR has Accepted 35 submissions for review. Issued 29 final recommendations,which several provinces and territories have already made their funding decisions. Received patient input for 97% of reviews. Reviews are targeted for completion within 99-149 days; review timelines met the 150-day average objective. pCODR permits a drug manufacturer the option to submit a cancer drug to pCODR while Health Canada is determining whether or not the drug can be sold in Canada (i.e., pre-NOC submission). The option of this parallel process means that the provinces and territories will receive a pCODR recommendation more quickly than if they waited until Health Canada authorized sale of the drug; if Health Canada does not authorize the sale, pCODR will stop the review. As of December 2013, 54% of submissions were made pre-NOC versus 46% for post-market approval It is important to note that review timelines for pre-NOC submissions are much shorter than post-NOC submissions from the date of receiving the notice of compliance to the date of notification to implement. Submissions made pre-NOC ranged between 49-127 days and submissions made post-market ranged from 143-824 days.
dations, pCODR encourages manufacturers to submit a drug for review before Health Canada approves it for sale; about half of the submissions are made before such approval is granted. Once pCODR issues a final recommendation on a particular drug, it is up to each province to decide if they should fund it. This funding decision is not taken lightly and provinces must consider several factors aside from pCODR’s recommendations, including its budget, its political priorities and the patient population. Provincial funding decisions are reported monthly on the pCODR site so that patients, patient advocacy groups and others can keep track. pCODR has also produced How Cancer Drug Funding Decisions are Made, a tutorial available for download at www.pcodr.ca and www.cancerview.ca/cancerdrugfunding. A collaboration between pCODR and the Canadian Partnership Against Cancer, the tutorial explains how public funding decisions are made, which groups are involved
in the process, how new drugs are evaluated, how health benefits, costs and values play into the decision, and how individuals might participate in decision-making panels. Looking ahead, I hope that pCODR’s review process, which is centered on a commitment to transparency and bringing greater clarity on the cancer drug review process, will serve as a model for other countries. Patients deserve to know why a particular cancer drug was or was not recommended and the rationale behind a funding decision and I believe that pCODR is raising the bar for all agencies that are responsible for reviewing new drugs and technologies.
To see this story online visit http://biotechnologyfocus.ca/ pcodr-changing-the-conversationabout-access-to-cancer-drugs
and February/March 2014 BIOTECHNOLOGY FOCUS 15
by: Shawn Lawrence
INNOVATOR
scientific creationism: the birth of a systems biology powerhouse Photo: Left to right are Vladimir Baranov, Olga Ornatsky, Gajus Worthington, Dmitry Bandura and Scott Tanner.
On February 13, 2014, Fluidigm Corp. completed its acquisition of Canadian biotechnology company DVS Sciences, Inc. in a cash and stock deal worth approximately $207.5 million.
I
t was a deal that had the biology field buzzing, and for good reason. By acquiring DVS, a pioneering company in single-cell multi-dimensional proteomics, Fluidigm, the leading single-cell genomics company that created microfluidicbased chips and instrumentation for biological research, established itself as the premier source for single-cell biology tools. At the centre of this deal is DVS Science’s CyTOF™ Mass Cytometer, a technology that has been labeled a “game changer” within the industry. The CyTOF is unique in providing researchers with the ability to interrogate single cells for many surface and intracellular proteins at the same by combining the analytical capabilities of atomic mass spectrometry with the power of flow cytometry for cell analysis. “We’ve been looking for a company like DVS Sciences for a long time. It has a technology that we became enamoured with going back a number of years, and for me 16 BIOTECHNOLOGY FOCUS February/March 2014
personally, it had a breathtaking capability,” says Gajus Worthington, president, CEO and co-founder of Fluidigm Corp. Coupled with the products already in Fluidigm’s arsenal, Worthington expects big things to come for the company going forward. “What we’ve managed to do with this deal is create a real juggernaut in this new field of single-cell biology; specifically I think it’s safe to say we’re now the powerhouse in single-cell analysis. Combined with our existing technologies, we have for the first time the ability to offer a complete picture at the individual cell level. There’s no other combination of tools in the world like this, and I think we’re positioned well to drive another period of real revolution and growth within this market of single-cell analysis,” says Worthington. He explains this is crucial because more and more scientists see the understanding of individual cell behaviour as critical to their research. On the flip side of the deal, DVS Sciences has delivered a sound exit strategy for its investors while at the same time maintaining its presence in Canada but as a new entity; Fluidigm Canada. It’s everything that the founders -- Vladimir Baranov, Olga Ornatsky, Dmitry Bandura and Scott Tanner -- could hope for when they started the company almost a decade ago.
“This merger is really great for us. It’s good for our employees, good for the company and good for the investors who stuck by us. The normal exit for investors is three to five years, and so the timing for them was perfect. More importantly, it’s good for our technology and where we want to take it.” This last point is the most important to Tanner. “It was pretty clear we were doing well. We had a product on the market and a good reputation. We were cash flow positive and profitable. The next phase for us was obvious, to get even bigger and to work with someone who could help us expand our scope even further. This deal with Fluidigm does just that and put simply, we’re not giving anything up. We’re still engaged and we still have a dream and our dream happens to merge really well with the Fluidigm dream. Together, we will enable systems biology at the single-cell level: in terms of fulfillment from a scientist’s and a founder’s perspective, this is a great step. It gives us even more impetus, support and a wider market segment to address,” says Tanner. Both Worthington and Tanner agree that because they share many of the same customers and clientele, the deal was made all the more possible. In fact, this was a real critical point in Worthington reaching out to
INNOVATOR
“the next phase for us Was obvious, to get even bigger and to Work With someone Who could help us expand our scope even further. this deal With fluidigm does just that and put simply, We’re not giving anything up. We’re still engaged and We still have a dream and our dream happens to merge really Well With the fluidigm dream.” — scott tanner DVS, and Tanner accepting the offer. “Spending time to try and understand our customers -- not just what they’re doing with our equipment but more importantly where their science is headed – gives us visibility of where the field is going and what we need to do in order to be enabling and relevant. It was during these discussions going back almost four years ago that I first heard about the CyTOF technology. Some of our customers described its function to me and I realized right away that if it actually worked, it would be really important.” To explain how CyTOF™ is the perfect complement to Fluidigm’s existing portfolio, one must first understand the types of products Fluidigm offers. Before Fluidigm came along, it was almost impossible for systems biologists to study genomics at an individual cell level. Often they would have to combine many thousands of cells together into a “stew” to have enough genomic material to analyze and produce results. “What we were able to do was reduce the reaction volumes by 1000x, and increase the amount of throughput and integration of complex steps so that scientists could do genetics at an individual cell level,” explains Worthington. For Fluidigm it all began when co-founder Stephen Quake invented a microscopic valve while he was teaching at Caltech in 1998. Quake and Worthington, who had befriended each other in an undergraduate physics class at Stanford University years earlier, founded Fluidigm in 1999. As Worthington explains, Fluidigm was really the first company to get microfluidics right. In the late 1990s, most microfluidic experts came from the semiconductor industry and preferred substrates such as silicon, glass or plastic, but not Fluidigm. Quake’s invention created the chip out of fusing multiple layers of rubber. That substrate is unique within the bio-chip industry and is illustrative of how Fluidigm has pioneered its path to creating a variety of PCR-based solutions.
“There were other companies before us who did microfluidics, but frankly they lacked the technology and the conceptual orientation for it to really work. You really did have to think about it like a semiconductor, and think of it as an integrated circuit.” Much the way a transistor controls the flow of electrons in a computer chip, Fluidigm’s microfluidic valve performs the same function for the life sciences industry in a microfluidic chip made of rubber. “It started with the TOPAZ® System, a product for protein crystallization that served a relatively small application in the industry. While it was good way to get started, it certainly wasn’t the home run.” The home run came later when Fluidigm began to understand how they could apply its technology to genomics. “We did that when we developed the BioMark™ System for Genetic Analysis, a multiapplication hardware/software platform based on our Fluidigm Dynamic Array IFCs (integrated fluidic circuits). The introduction of the BioMark™ system heralded a practical solution for ultra-sensitive detection by PCR. And while we were developing the BioMark™ system we realized that it allowed genomic application all the way to the level of the individual cell. And that turned out to be fundamentally and scientifically important. It turned out that the kinds of experiments that we enabled with BioMark first and later with the C1TM Single-Cell Auto Prep System, a product we launched in the middle of 2012, were so important to fields like cancer, stem cell biology, immunology, infectious disease and neuroscience, that it created a brand new market and field which is now called single cell genomics or single cell biology.” Nature publishing group labeled Single Cell Sequencing as the technique of the year for 2013 and single-cell research is radically changing the views that biologists have about how disease, how our bodies, and of
course, how all kinds of biological functions work. But understanding single-cell genomics is only part of the equation. “It’s a basic thing in biology that DNA is the code of life and then what your cells do with the DNA is they make RNA, which in turn is a template that translates the genes into the proteins that are the machinery inside the cell. Proteins are actually what do everything, they’re what create all your metabolic functions, responses, cell signaling and they do the work. So, in order to really understand what’s going on you have to be able to measure both the messengers and you also need to be able to measure what the proteins are doing. Without the ability to measure what’s going on at the protein level, you only have half the picture. DNA analysis informs on the framework that enables the cell’s function, but does not evidence that the cell is actually performing that function. And that’s what ultimately led us to DVS. We had the tools for enabling genomics at an individual cell level but needed that big piece of enabling proteomics at the level of the individual cell. The CyTOF does that,” says Worthington. Tanner adds it would be the dream of systems biologists to combine both genomics and proteomics at the single cell level, so that one could look at the map right from the architecture of the DNA through the machinery of the RNA to the functional performance of the proteins at the same time. “That would give you the overall picture of each individual cell and the images of each of the plethora of all the cells in the body then tells you the entire structure, the overarching biology that is making that body work.”
Fluidgim’s next steps: technology integration Making this dream a reality and finding a way to integrate the CyTOF technology with its own technology thus is the next challenge going forward for Fluidigm. Specifically, the company hopes to answer the February/March 2014 BIOTECHNOLOGY FOCUS 17
INNOVATOR
“We share similar experiences and stories of how we came to be and I believe stories are the fabric that keeps the company real and makes it something that is approachable, human and organic as opposed to just a bland corporation. We have a lot of overlap there, for both organizations whose primary allegiance is to doing great science, to building a company with a culture that people want to be part of, and feel so good about that they are willing to dedicate years of their lives to making it great.” — Gajus Worthington question of how to blend a common workflow so that the scientists can gain all of this information, both genomic and proteomic from an individual cell, rather than getting genomic information from one set of cells and proteomic information for another. “That’s really the strength of this combined organization, not only can we provide solutions for both but we have visions for integrating those platforms. It’s not easy and straightforward to tell how that’s going to happen, but certainly we have people thinking hard about how we are going to integrate them. And therein lies the integration challenge, because both technologies ultimately destruct the cells under investigation. When one analyzes the metals in the cell using the CyTOF they vapourize the cell and look at the atomic ions. And when a researcher uses the BioMark to look at the DNA, it has to break open the cell. So that’s our task, finding a clever way to integrate both technologies so we can look at DNA, RNA and the proteins at the same time,” says Tanner. This will be the focus of Tanner’s new role with the company as chief technology officer for Fluidigm global. “I’m going to get to learn a whole bunch 18 BIOTECHNOLOGY FOCUS February/March 2014
of genomics now which is actually revitalizing for me. My task is to understand the technologies thoroughly, to find out where the overlaps and integration capabilities are, and then to work with the development team to build out a roadmap for the future of expanding this platform.”
Fluidigm Canada going forward The plans for Fluidigm Canada as whole will not deviate too much from the DVS Science’s model says Worthington. In fact, it is expected that the group at Fluidigm Canada (the Toronto branch) will continue the development and production of the proteomic platform,and continue on with its R&D and manufacturing activities, while the DVS California office will more than likely be integrated with the Fluidigm office there. The other DVS founders, Dmitry Bandura and Vladimir Baranov, and Olga Ornatsky will also continue their current roles in R&D. Essentially it will be business as usual. “This organization has done really well and so one of the things you don’t want to do is change what’s working, rather you want to understand the main reasons that it was suc-
cessful, protect and encourage it to continue being successful,” says Worthington. Making the transition easier has been the fact that the evolutionary stories of the two companies are so similar. In a manner of speaking they are cut from the same cloth. “We share similar experiences and stories of how we came to be and I believe stories are the fabric that keeps the company real and makes it something that is approachable, human and organic as opposed to just a bland corporation. We have a lot of overlap there, for both organizations whose primary allegiance is to doing great science, to building a company with a culture that people want to be part of, and feel so good about that they are willing to dedicate years of their lives to making it great,” comments Worthington. He adds there are many other benefits to the deal that go beyond technological advancement and the marrying of genomics and proteomics expertise. “There’s clearly a very highly developed skill set in the Toronto region around the technologies that are essential to our platforms. There aren’t that many places in the world where those types of skills exist in concentration like they do in Toronto. Being there gives us access to this highly developed talent pool as well. Having critical mass in an area where there are highly skilled people is a real asset. We’ve experienced that in San Francisco, Singapore, parts of Europe, so that in itself is great. The other thing of course is our business presence in Canada was fairly nascent, and this is a huge launching pad to dramatically expand our business in this locale.” For Tanner, being part of Fluidigm is equally rewarding. “We worked so hard to build this platform, that I think all of the founders are really happy with this next step. I don’t think any of us feel that we’re giving anything up. We always dreamed that we would be building a successful technology that was going to answer biological questions and make a difference in the world, and to do that you have to reach more people and expand your scope. I truly believe this is just one of those quantum steps that will take us to that objective.”
To see this story online visit http://biotechnologyfocus.ca/ scientific-creationism-the-birthof-a-systems-biology-powerhouse
Re
Ca so life
Don
ww
Follow
Read it here first. Canada’s foremost news source on the Canadian life science industry. Don’t get left behind.
www.biotechnologyfocus.ca
Follow us on
@BiotechFocus
Q&a
5
Compiled by Biotechnology Focus
KEY TIPS FOR DEVELOPING ORPHAN PRODUCTS
As more drug companies search for new approaches after massmarket drug revenues are lost to generic competition, orphan drug development is gaining momentum. David Shoemaker senior vice president of research and development of Rho, a CRO based in North Carolina, is sharing five tips to select the right development partner to accelerate approval for orphan drug products and get much needed medicine in the hands of patients quickly and efficiently.
1 Work with CROs that have strong scientific, regulatory, and statistical expertise
A strategic approach with a focus on key milestones is critical to gain approval as quickly as possible. Look for CROs whose strengths include the ability to conduct challenging clinical trials, knowledge of the regulatory process, and scientific and statistical expertise to develop a plan for success at the outset to reach approval in a expedited speedy manner. Your CRO should have successfully obtained marketing approval for other orphan products previously. Marketing applications for orphan products require creative regulatory and statistical strategies to leverage the data obtained on populations much smaller than typically seen by regulators.
2 Know the “ins and outs” of the U.S. Food and Drug Administration’s approval mechanisms to help speed orphan drug approval Many orphan diseases represent serious or life-threatening conditions. Consequently, working with a development partner that understands each of the accelerated development pathways (i.e., Accelerated Approval, Priority Review, Breakthrough Therapy, and Fast Track) and the potential benefits or lack thereof is critical. Making an informed decision on the best mechanism at the start of the orphan drug approval process is the fastest path to approval.
3 Apply for US and European Orphan Drug Designation simultaneously
20 BIOTECHNOLOGY FOCUS February/March 2014
There is a combined form that can be used to obtain orphan drug status simultaneously in the US and EU. It is an option that is not being used broadly, but can result in significant reduction of time and effort.
4 Look for a CRO partner with experience working in small
patient populations
Working with small patient populations requires building communities and developing close connections with research foundations, advocacy groups, patients and health care providers for a purposedriven approach to product development. It will also be important to gain buy-in from Key Opinion Leaders.
5 Validate your population
Wa ind Wh
The rea Ca
CU MO TH • • •
TH
In yo inf ma
Sc
Before investing time and energy in an orphan drug application, make sure you are eligible. Regulators are on the lookout for developers who try to “slice the salami” meaning that your orphan population is really just a subset of a larger population from which there is no substantive difference. Pharmaceutical and biotechnology companies can accelerate successful development of orphan products by partnering with product development services providers with a culture of solving challenges and the scientific and regulatory expertise to navigate complex trials and approval processes. To see this story online visit http://biotechnologyfocus.ca/five-key-tips-fordeveloping-orphan-products/
FO
l record CARON DANIELing the digita Archiv
PUBLIC
SNOOK l health p.12 nta ANDREW ing me Manag
S A THOMA SORCHg ideas and Sharin ces p.16 resour
MA KER
2
AZI NE
LIC FOR PUB
DEC ISIO
KER N MA
S
UE KED ISS C I W E H T 12 BIG
12 FOR 20 ENGES CHALL
VS
01
70471
ry 10 Februa
61399
until Display
9
06
1 9 7047
10
tion Mail Publica 37 411325
6139
until July
9
$5.00
r: ation Numbe Registr
7 : 4113253 tion Number Registra
0
Display
adia www.can
nment
Public
$5.00
0
Gover
ngovernm
entexecu
SEC TOR
N DEC ISIO
SEC TOR
S
NS WHO ONWMENT R E V GO MATION? INFOR
PUB LIC INE FOR
p.16
Y 201 JAN UAR 18 VOLU ME 1 NUM BER
2010 JUN E 16 VOLU ME 6 NUM BER ov.ca www.netg
THE MAG
GAZ THE MA
p.15
tive. ca
GOV
NT VS ERNME
UBLE Ygement JOHN KN mana Portfolio
ion Mail Publicat
Want to raise awareness of the Life Science industry with government? What about influencing policy? The senior government decision-makers that you want to reach are reading Biotechnology Focus’ sister publication Canadian Government Executive.
• high quality editorial • extensive networking opportunities • a large and enthusiastic readership that makes use of advertisers’ products and services
Why CGE?
CURRENTLY IN ITS 20TH YEAR OF PUBLISHING IT IS THE MOST WELL READ AND RESPECTED JOURNAL REACHING THIS MARKET. CGE PROVIDES:
We are the forum of choice for public sector decision-makers, reaching up to 60, 000 of your potential clients each month.
Our Readers
PUBLIC SECTOR EXECUTIVES:
Reader Action
Scan to visit CGE website
FOR FURTHER INFORMATION CONTACT sales@promotive.net
By combining our relationships and relevant editorial with your products and services, your brand will make an impact. CGE provides valuable tools for executives to work smarter and more effectively. Join us in getting in front of Government Executives with your message!
THINK OUTSIDE THE AD In addition to traditional print advertising, CGE can help you reach your clients through world class special events, informative webinars, thought leadership and content marketing, and social media.
Our publication has the largest and most enthusiastic readership of any public sector magazine in the country.
• Deputy Minister • Assistant Deputy Minister • Director General • Director
76%
Have purchase influence on one or more of the items advertised
50%
Take action in response to what they see in our advertisements and articles
23%
Have personal control or significant influence over budgets greater than $10 Million
By Tony Pullen
across canada
IS CANADIAN BIOTECH
COMING TO LIFE?
A
fter a long, lonely vigil beginning in mid-2007, not long after I joined Paradigm Capital to be its healthcare banker, I am finally seeing some stirrings in the Canadian “biotech” space. The Paradigm assignment provided me with a ringside seat as well over half of the roughly 150 public entities that populated the Canadian health care space in 2007 were either taken over, marginalized to the point of extinction by clinical failures, repurposed into mining companies, or just disappeared. Only 60 of those companies survived. Given that approximately one quarter of the 2007 population were already of marginal value (market capitalizations well below $10 million), my estimates of the damage are approximate but still revelatory. The number of public healthcare entities in Canada today is actually closer to half the original total, as roughly 20 new companies have emerged in spite of the blight. Nature abhors a vacuum. I don’t want to get too carried away by what I’ve detected in recent weeks, but there does seem to be a trend developing beyond just company or news specific reactions. Even Lorus Therapeutics, which for many years seemed to serve as a leading indicator for biotech cycles in Canada (back when we used to have them), caught fire in the past few weeks due to a long overdue change in management and direction. Street technicians have been pointing to the charts of many surviving Canadian health care companies as “starting to look interesting.” However, one has only to turn to their longer-term charts to see the extent of the aforementioned problem. So much wealth destruction! Again, using Lorus as an example, while it more than tripled to almost $1 in the two weeks after the management change, it is still down 98% from its 10 year high. I have been wondering for months and months if (and maybe even when) the strong advances that have occurred since last fall in the U.S. biotech market might trigger a rally in their Canadian brethren. I had pretty much abandoned hope—until 22 BIOTECHNOLOGY FOCUS February/March 2014
& s& bs ub e pu ve op tiiv to ut et cu se ec os xe lo e c ex cl
S RESTO
ES SUI T
e he th ot to st ns miin 2 2m
WAY ENS E U Q
ind beh ly ngs n o eeti m was left !
Howntowoncks away e
d l wb A fe
THE
SURPRISING DOWNTOWN OTTAWA HOTEL YOU MIGHT HAVE MISSED.
377 O'CONNOR STREET, OTTAWA, ONTARIO
1-800-465-7275 WWW.VICTORIAPARK.COM
Really,
ReallyBig Hotel Suites.
The moment.You know it. It happens any time you stay at a new hotel, right after you swipe your room key. The moment before you open the door. Will the room be big, or small? Light, or dark? Nice, or not?
and feature real bedrooms, real kitchens and real living rooms. And they don’t cost any more than those of our competitors. Really, why would you stay any place else?
Here’s what you’ll find the moment you open your door at Albert at Bay—space, and lots of it. Our suites are the biggest in Ottawa
DOWNTOWN OTTAWA
435 ALBERT STREET
613.238.8858
RESERVATIONS 800.267.6644 ALBERTATBAY.COM
S
across canada
these recent stirrings. The case for a Canadian bull market in the space is that valuations reappearing down south will make for heady comparisons to similar science north of the border. And yet, even if money does start pouring into the sector, there’s a danger that it may flow back indiscriminately. The few remaining Canadian analysts will be challenged to ensure that new money doesn’t get wasted on the wrong names. It may even be somewhat unnerving for them to find that investors want to speak to them again! For those interested in revisiting the sector, it’s important to know that a great deal has changed in the health care world in the past six years. First, as it always does, science has continued to leap forward dramatically. The entities that were financed in the last boom wouldn’t even be worthy of mention in the context of today’s knowledge. Sadly, most of the “class of 1995 to 2000” went on to fail anyway, while the survivors are, for the most part, still pushing failed agendas. The exciting progress in understanding the role of stem cells was barely a glimmer then. As for oncology, while it’s difficult to keep pace with an epidemic that has become a fact of everyday life, significant therapeutic advances have been made in many cancers. Cures for Alzheimer’s or Parkinson’s remain as elusive as ever, while treatments for the other emerging modern epidemic, diabetes (in all its forms), are advancing—but slowly. Our understanding of diseases and their causes—and sadly, their complexities—has improved while the Internet has created masses of well-organized and informed victims’ groups. Orphan drugs, once the poor cousins of the pharmaceutical industry, are now its fastest growing category, as searching for the “next big blockbuster” has given way to the realization that personalized medicine is now not only possible, but probably the only path to true efficacy. Theranostics, pharmacoeconomics and pharmacokinetics are rapidly gaining in importance as “Obamacare,” a.k.a. affordable healthcare, is sending the U.S. system to either health or bankruptcy depending on whom you listen to. Companion diagnostics are fast becoming a necessary component of any potential therapeutic agent. The irony here, for those old enough to remember the early days of the biotech space, is that the idea of developing a diagnostic as a precursor to a potential therapeutic was the standard way in which the early companies developed. From a capital market perspective, the 24 BIOTECHNOLOGY FOCUS February/March 2014
Name
Mkt Cap 2006
Biovail Corporation ....................................................... $ 2,970.9 MDS Inc. ........................................................................ $ 2,507.1 CML Healthcare Income Fund ................................... $ 1,333.8 Axcan Pharma Inc. ....................................................... $ 1,117.8 Aspreva Pharmaceuticals Corp. ................................. $ 703.9 Cardiome Pharma Corp. .............................................. $ 627.6 Cangene Corporation................................................... $ 524.6 Angiotech Pharmaceuticals, Inc. ............................... $ 518.6 QLT Inc. ......................................................................... $ 466.4 Theratechnologies Inc. ................................................ $ 466.7 SXC Health Solutions, Corp. ....................................... $ 384.4 Noveko International Inc. ............................................ $ 366.7 Patheon, Inc................................................................... $ 324.4 Transition Therapeutics Inc. ....................................... $ 316.6 Resverlogix Corp........................................................... $ 267.9 TS03 Inc. ........................................................................ $ 206.8 DRAXIS Health Inc. ...................................................... $ 206.1 Table 1................................................................... $ 13,310
main change that has occurred in the biotech sector is that the old ’90s model started to die, particularly in Canada, with the financial collapse that followed the “human genome” rush of 2000. This original model presumed that investors would have the patience to match money with milestones in a virtuous circle of value creation over timelines measured in years. In Canada, that model went out for good in the 2008-’09 financial meltdown, aided and abetted by way too many clinical failures. Meanwhile, in the intervening period, the theoretical estimates of the total cost of bringing a new drug to market has climbed from $300-$400 million to well over $1 billion. I say “theoretical” because the reality is all over the map. Today’s demands for driving value are “show me the money.” Reconciling this massive cost with the need for companies to still somehow succeed requires clear potential for financial milestones driven by third-party validation (from either partnering or outright acquisition). The milestones need to be just as clear, in fact, as potential revenue is for any operating business. Another significant change in the global biotech environment over the last five to ten years is the status and needs of “Big Pharma.” Rather than being the mother ships of health care delivery, these multinationals have been under enormous pressure to
reinvent themselves. The good news is that these pressures, particularly due to the “patent cliff,” have shifted the playing field such that any new and exciting compound with a well-validated pathway or receptor can be snapped up at a much earlier stage than previously possible. The recent scramble for position in the rapidly growing hepatitis market is a clear example of this. Not since the heady early days of biotech, when Amgen made it all look easy by discovering two game-changing biotech drugs in a row, has such fever existed. Now technology is allowing companies to revisit and repurpose previously failed compounds (or trials) to find new efficacies or sub-populations for them. With encouragement from the National Institute of Health, some big pharmas are opening up their libraries of compounds to academia in the hope that new methodologies will find mechanisms that couldn’t have been seen ten years ago. Additionally, new companies are being built around repurposed drugs first discovered in the ’90s and then abandoned in the race to find the next blockbuster. So, what really happened to health care stocks in Canada during this period? While the vast majority of biotech stocks were shedding their value, two homegrown companies went on to create enormous wealth for investors. The biggest success by far was
across canada A perfect storm of adverse events culminated in a long litigation with its former partner, the result of which was the share price being cut by 75%. However, the company still possesses its leading-edge technology in the RNA interference space, which is all but impossible to explain to Canadian investors. the conversion of the shell of Biovail, one of Canada’s earliest success stories, from a “dead in the water” yield dinosaur to the massive $35-billion consolidator of niche drugs now known as Valeant Pharmaceuticals. The other was the overnight success (years in the making) of Systems Xcellence/ SXC Health Solutions, which morphed from a $400 million market cap into a $10-billion behemoth now rebranded as Catamaran Corp. Meanwhile, at the other end of the spectrum, the erstwhile poster child for the Canadian health care sector, MDS Inc., was carved up for scrap by its militant hedge fund shareholders. (Ironically, SXC was helped to survive by the team at MDS Capital at a critical juncture.) Also, honourable mention to Novadaq Technologies for achieving a $1 billion market value, without much fanfare, thanks in large part to the support of the team at Fairfax Financial. Its recent U.S.-
Name
led $100 million financing is a significant milestone by any measure. In aggregate, seven years ago there were seventeen companies (Table 1) with market capitalizations over $200 million, for a total value of $13.3 billion. Today, there remain twelve companies over this threshold (Table 2), and thanks to the aforementioned success stories their combined market cap has reached over $50 billion. At face value, this is a spectacular success. If you had owned a basket of those seventeen names you would have been a very happy investor. However, remove Valeant and Catamaran from the picture and you lose $7 billion from the market value of the remaining fifteen companies to +/- $3 billion. In the next tier, companies valued between $50 and $200 million (where “institutional interest” in Canada really starts), it’s a very different story. Back in 2007, there were
Mkt Cap 2013
Valeant Pharmaceuticals Int........................................ $ 38,193 Catamaran Corp............................................................ $ 9,964 Paladin Labs Inc............................................................ $ 2,436 Patheon Inc..................................................................... $ 1,373 Novadaq Technologies Inc........................................... $ 999 Nordion Inc..................................................................... $ 540 Medical Facilities Corp................................................. $ 537 Prometic Life Sciences Inc........................................... $ 444 TearLab Corp.................................................................. $ 329 QLT Inc........................................................................... $ 294 Cipher Pharmaceuticals Inc........................................ $ 215 Neovasc Inc................................................................... $ 202 Table 2.................................................................... $ 55,527
forty companies in this bracket, while today there are only nineteen. Surprisingly, eight of these are new entities, so on an “apples to apples” basis there are only eleven “survivors.” Between $20 and $50 million, fourteen companies remain where there used to be forty back in 2007. The rest of the population, comprised of thirty-six wannabes ranging from $1 to $19 million in market cap (for a total of $333 million), sits well below most investor’s risk tolerance. Hopefully there will be some great surprises from this list. My purpose here is to provide some hard earned perspective on where I think opportunities lie in this vastly reduced landscape, having watched it evolve with some intimacy for twenty-five years (admittedly as an accidental tourist—by which I mean no background in science). In 1987-88, I led the financing effort to create MDS Health Ventures, the predecessor to MDS Capital Corp., now known as Lumira Capital. At that time the sector barely existed. I acknowledge that I don’t and can’t possibly know everything there is to know about all the companies comprising the Canadian biotech scene. What follows is an attempt to highlight the companies I do know well enough to say that the potentialities of their assets or operations are relevant to the health care environment of today. First, in the dwindled list of companies above the $200 threshold, I only have two favourites: Prometic Life Sciences and Oncolytics Biotech (at least the latter was at time of writing). Prometic because its massive platform of long awaited but transformative technologies is finally producing consistent revenues, and its therapeutic portfolio is gaining market recognition. It is now the most likely Canadian health science company to benefit from U.S. investor attention and valuation parameters. In the case of Oncolytics, evidence continues to grow that its lead compound, Reolysin, is on the verge February/March 2014 BIOTECHNOLOGY FOCUS 25
across canada of major validation as a leading therapeutic agent in oncology. Even though the company has persevered against all odds by virtue of the old model mentioned earlier, it has continued to successfully finance its clinical programs. I would have liked to have included both Medicago and Trimel in this list, but the former’s management sold the company to its long-standing Japanese partner, while Trimel has had to deal with the negative headwinds involving its founding investor Eugene Melnyk and his personal finance issues which came to light in February. This culminated in May in an unfortunate valuation implosion when it became more obvious to the market that both the company and Mr. Melnyk needed to sell shares at the same time as the company was attempting to raise the capital necessary to bring its innovative lead drug, Compleo TRT, to the goal line. Fortunately the combination of the publicity and the share price resulted in the first “over subscribed” issue the sector has seen in years. In the interest of full disclosure, I worked with the company without success on a more constructive solution to this dilemma for six months prior to the dilutive financing. After the dust settled, Melnyk remained the largest shareholder but with a vastly reduced percentage. In the next tier of companies above the $50 million cut-off, my picks, now including Trimel, would be Tekmira and Spectral Diagnostics. Tekmira suffered a severe devaluation in its stock price almost immediately after it successfully executed a share consolidation and NASDAQ listing in 2010. A perfect storm of adverse events culminated in a long litigation with its former partner, the result of which was the share price being cut by 75%. However, the
company still possesses its leading-edge technology in the RNA interference space, which is all but impossible to explain to Canadian investors. The hard-won cash it received from successfully defending its IP leaves its technology value at a ridiculously low level. As interest in RNA interference grows, Tekmira will be a direct beneficiary. For comparative purposes, the major players in this space sport valuations from the $100s of millions to the $4 billion now enjoyed by its former partner, Alnylam. October’s $35 million, entirely U.S.-led financing clearly underlines this fact. It is worth noting from an historical perspective that Tekmira is the successor company, by way of a few iterations, to Inex Pharmaceuticals, part of the original class of ’90s Canadian biotechs. Its original drug candidate, now branded as Marqibo, was finally approved in August 2012 for treatment of a subset of ALL (acute lymphoblastic leukemia). The drug passed through many hands of ownership over the years, too numerous to mention here, and appears to have $50 million in potential sales for its now owner, Spectrum Pharma, in this approved indication. As mentioned earlier, the old model did not serve investors well, but the drug may still finally reach Inex’s originally targeted market in non-Hodgkin’s lymphoma (NHL) back in the ’90s. As for Spectral, one of the early stock market successes in Canada, its potential stems as much from years of capital market neglect as from the promise of its technology. Its stock price rose spectacularly in the early 1980s, almost reaching $1 billion in market value, on the strength of early excitement about its “point of care” cardiac diagnostic panel invention. Nothing of much value resulted from this early technology. A man-
I am continuing the effort as the company fully meets my core criteria for any healthcare opportunity: it is addressing a huge unmet need in brain health by way of a high-margin product (in this case software) with almost zero regulatory risk; and it is conducting one of the largest trials in psychiatric history with the full cooperation of the U.S. military. 26 BIOTECHNOLOGY FOCUS February/March 2014
agement change over ten years ago set the company on a new long and painfully dilutive path (again, based on the old model) to what may finally become a huge win for its long suffering shareholders. Ironically, its current technology marries a well-established Japanese filtering device to—you guessed it—a point-of-care diagnostic, albeit in the vastly more challenging area of septic shock. Sepsis remains one of health care’s most profound problems. If its current phase 3 Euprates trial on which management has “bet the company” succeeds in 2014, the share price win will be in multiples. One other outlier company in this valuation range would be Titan Medical. Based on the work of one of Canada’s leadingedge experts in robotic surgery, Dr. Reiza Raymand, Titan is in a unique position, assuming it can continue to procure patient capital to achieve full value for developing the “next gen” solution for this growing field of surgery. It is beyond a “David and Goliath” story. With a market cap of only $75 million vis-à-vis its only real comparator/ competitor, Intuitive Surgical (valued at $15 billion), it is not for the faint of heart—but is world class in potential. As for where I think potential exists below these previous categories of value, I would highlight three long-term survivors: Cynapsus, Lorus and Microbix. While they’ve all had to endure enormous dilutions to stay alive, they’ve been able to maintain or develop new potentialities. Cynapsus has a high probability of improving the deliverability of a small existing Parkinson’s drug, creating the potential for a substantial win and take out. Lorus’s new American-based management team has already demonstrated its ability to add significant value to
across canada the small molecule portfolio that previous However, remember that Prometic was under health care companies is by removing today’s management struggled to sustain during this threshold eight short months ago and it 10 largest from the aggregate $58.8 billion the blight. Microbix has been searching for is now valued at $450 million. Cipher spent value of the 81 entities in Appendix A. I base market recognition for years on numerous years hovering around $1 and now trades at this on a presumption that these, at least, fronts and still remains a “dark horse,” but $9 while making steady progress developing may be efficiently valued. The resulting 71 it is finally becoming cash flow positive and “me too” niche therapeutics. TearLab, the old, are worth slightly more than $3 billion, or an still retains three assets that are each1potenOccuLogix, has marched from $2 average of $44 million each. There have to be new card:Layout 1/31/2013repurposed 9:09 AM Page 1 tially worth some multiples of its market cap. to $14—a plus $400-million valuation against more Prometics out there to be discovered. Not to say that it will be a six bagger, but it an apparent revenue run rate of $15 million is certainly worth a lot more than its current from its Osmolarity system. This occurred To see the full appendix of $10-million valuation. without much fanfare, at least from what I Canadian companies visit Among the newer crop of companies, have seen, save for a successful $40-million http://biotechnologyfocus.ca/ I would cite Medifocus, Delmar Pharma, financing this summer. is-canadian-biotech-comingSernova and VentriPoint as companies with Another way to summarize the magnitude to-life/ new strategies or technologies with game- of the opportunity represented by Canadian changing potential in their respective fields. Some or all of them will be certain to achieve a following if the renewed interest in the SRC101 space finds them. Medifocus has recently reacquired its management team’s original invention from Boston Scientific and is in the process of reestablishing that product’s $30-million revenue potential. This brings a I wish to receive/continue to receive a complimentary subscription to welcome revenue stream to its multi-faceted Yes No BIOTECHNOLOGY FOCUS oncology platform. Delmar is repurposing a Format Preference: print digital both therapeutic agent from the 1990s as a potential treatment for glioblastoma, one of canSignature:____________________________________Date: ___________________________ cer’s worst, most aggressive forms. Sernova Name:_________________________________Title: ____________________________________ is developing a new, cutting-edge approach Company: ______________________________Dept: ___________________________________ to diabetes management. VentriPoint has a major, cost effective, cloud-based software Business Address : _______________________________________________________________ solution for heart diagnosis that is currently City:_____________________________Prov: __________Postal Code: ____________________ in front of the FDA. Approval would bring Telephone: ___________________________Fax: ______________________________________ a major value inflection. Also, I would be E-mail: ________________________________________________________________________ remiss if I did not mention CNS Response. I was introduced to CNS by the TMX in On occasion, BIOTECHNOLOGY FOCUS will send third-party information on products & services related to the lab and life science industries. These may be cancelled at any time. Please check here if you do NOT wish to receive these. late 2010 and have been helping to finance it ever since. It came to Canada to try and JOB FUNCTION 55 Post Doc / PhD Student 50 C Level Management avail itself of our more “user friendly” small C87 Which products are used in your lab? 58 Professional Services / 50a Engineer cap market just as it was ceasing to be so. I Consulting 51b Principal Investigator / H Liquid Handling & Sample Prep A Analysis Instruments was immediately attracted to its mission of 59 Lab Technician / Research Scientist I Microscopes, Optics, Cameras B Basic Lab Equipment Research Assistant 51c Professor / Faculty providing a diagnostic solution (where none J Safety & Hygiene C Chemicals/Biochemicals 60 Sales / Marketing 53a Group / Project Leader K Spectroscopy D Chromatography – Gas exists today) to the increasingly tragic area 62 IT Management 53b Procurement / Supply Chain L Testing Systems/Equipment E Chromatography – Liquid of severe mental disorders and depression. I 63 Nurse / Practitioner 53c R&D Director / Manager M Vacuum Equipment F Filtration, Water Purification 64 Pharmacist 54 Legal / Financial / am continuing the effort as the company fully Y None of the Above G LIMS 65 Physician Administration / Regulatory / meets my core criteria for any healthcare 99 Other (Specify): Communications opportunity: it is addressing a huge unmet C88 Product Development Stage (check all that apply) need in brain health by way of a high-margin COMPANYs PRIMARY BUSINESS ACTIVITY A Research/Development C Production/Manufacturing product (in this case software) with almost 50 Academic 50h Packaging / Distribution B Pilot/Scaleup D Tech Transfer 50a Biotech Organization 50i Pharmaceutical Organization zero regulatory risk; and it is conducting one E Not applicable 50b Clean Tech organization 50j Professional Services of the largest trials in psychiatric history with 50c Contract Research / (legal, financial, consulting, the full cooperation of the U.S. military. Manufacturing recruiting, regulatory, C89 Are you building a new lab? Yes No Organization communications) Among the remaining health care entities 50d Diagnostics Organization 52 Clinical Research / in the Canadian market, I would cite Intel50f Food processing / Hospital liPharmaCeutics, Critical Outcome Technolomanufacturing 53 Research Institute 50g Instrument Manufacturer / 55 Government Agency gies, Immunovaccine and Nuvo Research as C90 We have the following enewsletters: Distributor 99 Other (specify): having enough merit relative to their current 1 Biotechnology Focus eBulletin 5 Health Care valuations to be worthy of investigation. 2 Laboratory focus eBulletin 6 Agri-Food C86 Buying Influence The problem for all the companies below 3 BioPharma 7 Clean Tech A Authorize B Recommend C Specify 4 BioMedical 8 Industry Inte the $50-million threshold will be finding adequate liquidity to sustain them until the For a quick response please fax: 905-727-4428 or e-mail: circulation@promotive.net market interest I am sensing really blossoms. February/March 2014 BIOTECHNOLOGY FOCUS 27
CALENDAR APRIL 2014
Tel: 203-702-7660 Fax: 203-775-5177 Email: jeffw@aiche.org Web: www.aiche.org
April 1-4 Analytica 2014 Venue: Munich, Germany Tel: 416-237-9939 Fax: 416-237-9920 Email: bmertens@canada-unlimited.com Web: www.analytica.de or www.canada-unlimited.com
April 26-30 Experimental Biology 2014 Venue: San Diego, CA Tel: 301-634-7075 Fax: 301-634-7008 Email: eb@faseb.org Web: www.experimentalbiology.org/2014/ Home.aspx
April 29-May 1
MAY 2014
Drug Discovery & Therapy World Congress 2014 Venue: Boston, MA Tel: 857-239-8855 Email: info@ddtwc.com Web: www.ddtwc.com
May 1-2
June 16-19
NTTP 2014 - International Conference on New Trends in Transport Phenomena Venue: Ottawa, ON Email: info@NTTPconference.com Web: www.NTTPconference.com
Global Biotechnology Congress 2014 Venue: Boston, MA Tel: 857-239-8855 Email: info@globalbiotechcongress.com Web: www.globalbiotechcongress.com
May 15-16
June 23-26
CDSR 2014 - International Conference of Control, Dynamic Systems and Robotics Venue: Ottawa, ON Email: info@cdsr.net Web: www.cdsr.net
Bio International Convention Venue: San Diego, CA Tel: 202-962-6655 Web: convention.bio.org
May 29-31
Bio-IT World Conference & Expo 2014 Venue: Boston, MA Tel: 781-972-5400 Fax: 781-972-5425 Email: chi@healthtech.com Web: www.bio-itworldexpo.com
Lab Medicine 2014 Venue: San Francisco, CA Phone: 801-583-2787, ext. 2506 Email: karolynn.braden@aruplab.com Web: www.aclps.org
April 29-May 1
JUNE 2014
Frontiers in Particle Science and Technology Venue: Oak Brook, IL
June 16-19
JULY 2014 July 13-15 Biotechnology & Human Health Symposium 2014 Venue: Charlottetown, PEI Tel: 902-367-4400 Email: jennifer@peibioalliance.com Web: www.biotechnologyandhumanhealth.com
Company & Advertiser Index COMPANY
Page Website
Air Science................................................................................................... 29....................................................................................www.airscience.com Albert at Bay.......................................................................................................23..................................................................................... www.albertatbay.com Amorfix Life Sciences.................................................................................... 8 ....................................................................................... www.amorfix.com Best Western Victoria Park Suites...................................................................23....................................................................................www.victoriapark.com Bioo Scientific ............................................................................................. 29 ............................................................................. www.biooscientific.com Children’s Miracle Network...............................................................................5 ................................................................www.childrensmiraclenetwork.ca Concordia Healthcare Corp........................................................................... 6 .................................................................................www.concordiarx.com Eppendorf...........................................................................................................32.......................................................................................... www.eppendorf.ca GE Healthcare.............................................................................................. 29............................................................................. www.gelifesciences.com L.J. Star Inc................................................................................................... 29............................................................................................ www.ljstar.com MedMira....................................................................................................... 29..................................................................................... www.medmira.com Miraculins.................................................................................................... 11................................................................................... www.miraculins.com Persistence Capital Partners........................................................................ 11.......................................................................www.persistencecapital.com POI Business Interiors.......................................................................................29........................................................................................................ www.poi.ca Qu Biologics.................................................................................................. 6.................................................................................. www.qubiologics.com Quest PharmaTech........................................................................................ 6 ....................................................................... www.questpharmatech.com Revive Therapeutics.................................................................................... 11..................................................................................www.revivethera.com Theralase Technologies................................................................................ 8...................................................................................... www.theralase.com Viteava Pharmaceuticals............................................................................... 7......................................................................................... www.viteava.com Thermo Fisher.....................................................................................................2.............................................................................www.thermoscientific.com VWR.......................................................................................................................2............................................................................................... www.ca.vwr.com 28 BIOTECHNOLOGY FOCUS February/March 2014
NEW PRODUCTS Barcodes Bioo Scientific introduces its new NEXTflex™ Dual-Indexed DNA Barcodes. The barcodes are designed for multiplexing of up to 192 samples for library preparation. These barcodes are compatible with high-throughput automation for increased scale and cost-efficiency. They can be used to multiplex genomic DNA, RNA and ChIP sequencing libraries. The NEXTflex Dual-Indexed DNA Barcodes allow pooling of multiple library preparations in a single flow cell lane. The indices
allows facility managers to choose from four modes of operation: flashlight mode, timed mode, continuous mode, and an optional dimmer mode.
Web: hwww2.ljstar.com Toolkit MedMira has released its Miriad RVF Toolkit, for the detection of antigens or antibodies. The toolkit is 10 times faster than other methods on the market. It brings instant point-of-use testing to laboratory and academic researchers, using MedMira’s Rapid Vertical Flow TechnologyTM. The components of the toolkit include: test cartridges with immunoreactive membranes; the MedMira Universal
are designed to be sequencing error resistant and allow for consistent and proper differentiation between samples. Each set of barcodes has been functionally validated with Illumina sequencing platforms.
Web: www.biooscientific.com Sight glass light L.J. Star Inc. has introduced the LumiStar3000™, a 60mm LED sight-glass light. The new luminaire is capable of outputting 2600 lumens at full brightness. It produces four times the light of a standard 100W halogen luminaire, with less energy and heat. It offers illumination of vessels used in pharmaceutical,
buffer; InstantGold caps that contain dried colorimetric detection reagent; and concentrated gold for researchers to make their own conjugate. All researchers will need are their biologics (antigen and antibody) to perform any immunoassay.
Web: www.medmira.com/products/ research-tools Filters Air Science has introduced its Purair SKY ceiling mounted filtration units. The units were designed to protect lab personnel and the environment in areas where hazardous substances are handled. The Purair SKY has a dynamic filtration chamber with a sliding filter clamp that allows for simple, quick filter changes. Units
chemical and food processing. The LumiStar 2600 luminaire consumes less than 40W of power at full brightness, one tenth the energy versus halogens. The light can be turned on and off with a capacitive touch switch, which can be operated while wearing gloves. The luminaire’s design
come with an epoxy coated steel support frame with LED lighting and wall mounted controls. Two models are available: the SKY-24 requires a rough opening of 22.75” by 22.75” while the SKY-48 requires 45.5” by 22.75”.
Web: www.airscience.com Cell culture medium GE Healthcare introduces its Xuri™ MSC Medium, a versatile cell culture product that enables the expansion of human mesenchymal stem cells (hMSC) without the use of animal de-
rived components or undefined serum. It can be used to culture hMSC from a range of sources, including bone marrow, umbilical cord, or adipose tissue. Xeno-Free Xuri MSC Attachment Solution is the recommended coating agent for the serum-free expansion of hMSC with Xuri MSC Medium and supports high reproducibility across batches.
Web: https://promo.gelifesciences.com Homogenizers Omega’s new HMG-10 Series of powerful laboratory homogenizers has a 144 watt, high-torque motor with a variable speed adjustment, separate on/ off switch and is manufactured from 316 stainless steel material. HMG-10 series generator probes can quickly lock into the special adaptor to provide hands-free ejection of the probe, minimizing the chance of accidental contamination. Ideal for lab, sample preparation for food, bio and pharma lab testing. Web: www.omega.ca/shop/pptsc. asp?ref=HMG-10&flag=1 February/March 2014 BIOTECHNOLOGY FOCUS 29
tHE Last Word
By Dr. Gilles Patry
BUSINESSES TAKE NOTE:
University labs are a storehouse of top-notch research capability
L dr. gilles Patry
is President and CEO of the Canada Foundation for Innovation. Visit the CFI Research Facilities Navigator at Innovation.ca/ navigator.
ast fall, Keith Warriner, a food scientist at the University of Guelph, was approached by a small tea brewing business with an age-old biotechnology problem: How can a fermentation process be scaled-up without throwing the balance of microbes out of whack and spoiling the product? The one-woman company had been brewing kombucha — a popular fermented tea purported to have a detoxifying and energizing effect — from her kitchen for years when a large grocery chain agreed to market her product. After chucking out several spoiled batches, she turned to Warriner’s lab, desperate to refine her new process to keep unwanted, potentially dangerous bacteria at bay, while maintaining the right balance of acetic acid bacteria and yeast to achieve the optimal flavour for her product. Using DNA-fingerprinting equipment funded by the Canada Foundation for Innovation (CFI), Warriner’s team identified precisely what bacteria are present in a good batch, and which bacteria were responsible for making the tea taste like nail polish remover. The businesswoman benefits from having a defined culture for her brewing process, and Warriner walks away with a real-life lesson about the complexities of fermentation to teach his students. This is an example of what can happen when business and research come together. And this is one form of innovation — when a company fosters creativity by engaging researchers and gains an edge in the marketplace by finding an inventive solution to a problem. Supporting innovation of all kinds is at the core of the CFI’s three-fold mandate. As the leading federal organization devoted to funding research infrastructure in universities, colleges and research hospitals, the CFI ensures that Canada’s best researchers have access to the advanced labs and equipment necessary to conduct world-class research across all disciplines, and from discovery to applied research. Having the most cutting-edge tools helps to attract and retain top talent from around the world and provides a vibrant environment in which to train the next generation of researchers and innovators. The third element of our mandate is to enhance the capacity of our funded
30 BIOTECHNOLOGY FOCUS February/March 2014
institutions to use their research infrastructure to support innovation and commercialization. The collaboration between the tea brewing company and Warriner’s lab is one example of the kind of mutually beneficial partnership that is happening across Canada: according to Statistics Canada, our universities conduct almost $1 billion worth of research in collaboration with the private sector annually, which provides “the intellectual raw material that drives innovation and builds prosperity.” But it can be challenging for companies to tap into research resources at post-secondary institutions — they are either not aware of what resources they can access or they don’t know what kind of labs or expertise are available. Clarifying this is the driver behind a new online tool the CFI launched last November, called the Research Facilities Navigator. This is a searchable directory of participating CFI-funded research labs and facilities in universities, colleges and research hospitals across Canada that are open to working with business. Almost 350 labs from virtually every discipline have submitted entries for the Navigator, and the number is growing. For research facilities, the Navigator is a way to promote their research capabilities to the private and public sectors; for companies, it is a venue to find the research facilities that can help their business grow, stay competitive, design new or better products or processes, and foster relationships with highly skilled people. Tapping into Canada’s incredible storehouse of research capability to open up a company’s potential is a notion that comes naturally to companies like the one Warriner helped and one that has repeatedly been proven in institutions across Canada. Making sure these connections continue and new connections are facilitated is what the Navigator is all about.
@
Got something to say? Please send your comments/letters to biotechnology_focus@promotive.net
media:scape™
furniture and technology merged to help teams access and share information www.steelcase.com/cometogether
expect more
Contact us to learn more
·media:scape™ creates a collaborative destination ·Everyone can share their digital information instantly ·Information is visible by all participants
POI Business Interiors has more than 50 years of experience in providing knowledge, products and services that help people work more effectively. We understand the issues facing organizations today. T 888 296 9967, F 905 479 6941 www.poi.ca info@poi.ca
Fast Forward The Eppendorf epMotion® Series: Enjoy easy-to-use and flexible automation > Available as ThermoMixer ®, The new Eppendorf epMotion liquid handling workstations are the right vacuum manifold or magnetic choice for your highly reproducible separation options and accurate pipetting results. > User guided, touchable software Discover new features, more speed assistants for easy application and worktable positions and the new programming intuitive software assistant concept. > UV light decontamination and HEPA air filter option
www.eppendorf.ca/automation • 800-263-8715 031.A1.0130.A © 2014 Eppendorf AG.
C031.A1.0130.A.CA-BFO.indd 1
Full page journal ad Biotechnology Focus - BFO
1/23/14 2:24 PM
