Biotechnology Focus March 2010

INSIGHTS FOR THE LIFE SCIENCE INDUSTRY

MARCH 2010 VOLUME 13, NUMBER 3

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Also:

BRIDGING THE SKILLS GAP Ensuring Canada has the talent it needs

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contents MARCH 2010 – VOLUME 13 – NUMBER 3

HOT BUTTON ISSUES

SPECIAL SECTIONs

10

Readers Respond Readers respond and share their views on the industry’s position (Compiled by Shawn Lawrence)

12 Access to Capital

The defining problem for Canadian biotech companies HOT in 2010 (By PeterBUTTON Van Der Valden)

ISSUES

16 Canadian Healthcare in 2009: Survival, Success, Surrender How will 2010 compare?

(By James Smith and Wayne Schnarr)

21

Major Scientific Facilities in Canada:

DEPARTMENTS 6

Research news

9

Business corner

27 product news 28 Calendar of events 30 THE LAST WORD R&D News

UHN Microarry Centre receives awardt

. www.bioscienceworld.ca

6

Challenges and Solutions (By Daniel Banks)

24 Ontario’s Bioscience Industry CEOs Speak out about issues affecting their ability to grow in 2010 and beyond (By Gail Garland)

30 The Last word

Bridging the Skills Gap: Ensuring Canada has the talent it needs (By Colette Rivet)

HOT BUTTON ISSUES

MARCH 2010 BIOTECHNOLOGY FOCUS 3

PUBLISHER’S NOTE PUBLISHER/ EDITOR-IN-CHIEF STAFF WRITER INTERN

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very industry ebbs and flows with the times, and lately most have been affected in one way or another by the harsh economy. Even with many expecting an economic turnaround this year, the Canadian biotechnology sector continues to be caught in the riptide of financial burden.

At this time last year, we asked you, the reader, what were your personal top three issues/priorities that you would like to get before government. The number one priority (garnering 30 per cent of your responses) was that funding was of the utmost importance. Readers responded with comments such as “Canada’s competitive edge is slipping away, while other regions are ramping up big time!” and “Canada needs to focus on turning our great research into commercially viable companies.” In fact, 67 per cent of respondents believed that the government is not listening to the life sciences field.

Today, little has changed. In our newest survey of C-level executives, funding and tax credits remain the industry’s top priority. Perhaps the most staggering revelation from our survey was the number of executives that felt government is simply not listening to what the life science industry is saying. These results become increasingly grim when bound to the immensely strong belief amongst respondents that the worst of the economic downturn is not over.

When scanning the headlines of the feature stories in this issue, gloomy keywords blanket the pages; problems, survival, surrender and challenges, just to name a few. Yet it is from these same headlines that we can discern an unmistakably clear desire from the industry - a desire for change. For each somber message that appears in this issue, an equally engaging glimmer of hope or call-to-action brightens these pages.

Last month, in this very space I recalled how there was a sense at the latest BioPartnering event that the worst was behind us. Positive news examining the financial situation for Canada’s biotech companies was also released during the event. As such, the results of our latest Hot Button Issues survey should not be taken as a step backwards but as an opportunity for the Canadian biotech industry to dig deeper into the real problems, challenges and hopefully, solutions.

Perhaps Peter van der Velden puts it most eloquently in his article on page 12, “Today, we are at a tipping point…”.

Canada has some of the best facilities and brightest minds in the world, and now the Canadian biotech industry needs the financial direction and commitment to fulfil its aspirations.

4 BIOTECHNOLOGY FOCUS MARCH 2010

Tim Bryant

CONTRIBUTING WRITERS

Colette Rivet Daniel Banks

Gail Garland

James Smith

Peter Van Der Velden

Wayne Schnarr

GRAPHIC DESIGNER CONTROLLER MARKETING MANAGER SUBSCRIPTION INQUIRIES

Patricia Bush Elena Pankova John R. Jones Mary Malofy circulation@promotive.net Fax 905-727-4428

EDITORIAL ADVISORY BOARD Najla Guthrie, KGK Synergize; Pierre Bourassa, IRAP, Montreal; Brad Guthrie, Alberta Advanced Education and Technology; Carol Reynolds, Genome Prairie; Ulli Krull, UTM; John Kelly, Erie Innovation and Commercialization; Peter Pekos, Dalton Pharma Services; Brad Thompson, Oncolytics; Darrell Ethell, CanReg; John Hylton, John H. Hylton & Associates; Robert Foldes, Mentis Partners; Colette Rivet, BioTalent; Grant Tipler, RBC; Randal R.Goodfellow, P.Ag., Senior Vice President, Corporate Relations, Ensyn; Bob H. Sotiriadis, LLB,a partner with Leger Robic Richard; Dale Patterson, The Bourton Group; Darcy Pawlik, Ag-West Bio Inc; Barry Gee, LifeSciences British Columbia Biotechnology Focus is published 12 times per year by Promotive Communications Inc. 24-4 Vata Court, Aurora, Ontario L4G 4B6 Phone 905-727-3875 Fax 905-727-4428 www.bioscienceworld.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 PAP Registration No. 10952 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 x228 reprints@promotive.net

CMYK

Biotech in Canada

Shawn Lawrence

National Account Manager

The State of

Terri Pavelic

CMYK

GlaxoSmithKline Canadian Vaccines Leader As a leading investor in Canadian Research and Development (R&D), GlaxoSmithKline is committed to fostering Canadian innovation in health care by: Building research partnerships from coast to coast GlaxoSmithKline invested more than $156 million in Canadian R&D in 2008.

Investing in Canada’s brightest minds Our $22 million Pathfinders Fund for Leaders in Canadian Health Science Research was established to help Canada become a world leader in R&D. Commercializing Canadian discoveries to create real health care solutions Every day, thousands of Canadian employees work to discover, develop, manufacture and market innovative medicines, vaccines and health care products for Canadians and people around the world.

We all know that innovation does not happen by accident. GSK will continue to work with all levels of government to make health care innovation a priority so that together we can continue to foster Canadian R&D, manufacturing, and job creation. The ultimate result of that commitment is new vaccines, medicines and better lives for Canadians. www.gsk.ca

Do more, feel better, live longer

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R & D NEWS UHN Microarray Centre recieves OGI Genomics Technology Seeding Award

Clinical Trials & Patents Stem Cell Therapeutics Corp. (Calgary, AB) has received a No Objection Letter from Health Canada for their supported, investigator-led Phase 2a, single centre, open label study to characterize the safety of human Chorionic Gonadotropin (hCG) and Erythropoietin (EPO) in severe traumatic brain injury (TBI) patients.

The principal investigator for the trial is Dr. David Zygun, assistant professor in the departments of Critical Care Medicine, Clinical Neurosciences and Community Health Sciences at the University of Calgary. The protocol of the Phase 2a TBI study has been reviewed by Health Canada. Approval by the University of Calgary’s Office of Medical Bioethics is pending and once received will permit TBI patient enrolment in the Phase 2a TBI study at the Calgary Foothills Medical Centre.

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Inside view of the deck of the nCounter Prep Station The Univeristy Health Network (UHN) Microarray Centre is the latest program to benefit from the Ontario Genomics Institute’s (OGI) Genomics Technology Seeding (GTS) program. The Microarray Centre, a member of OGI’s Platform Affiliates Program, will recieve $10,000 to evaluate several RNA amplification methods that could potentially extend the applicability of the NanoString Technologies (Seattle) proprietary technology, the nCounter™ system, to single cell or other applications constrained by small sample size.

The nCounter™ system, which allows multiplexed gene expression profiling of up to 550 genes in a single reaction, is currently used as a downstream validation tool for microarray analysis, next-generation sequencing data and/ or biomarker studies. It can also be used for splice variation analysis, pathway analysis, fusion transcript expression and pathogen detection. Very little data currently exists indicating which amplification technology is best used in conjunction with the nCounter™ system.

The UHN Microarray Centre will use their new investment from OGI to examine what RNA amplification method works best in combination with the nCounter™ technology, allowing for decreased sample requirements, potentially down to a single cell – in-

6 BIOTECHNOLOGY FOCUS MARCH 2010

creasingly desirable, for example, in the context of analyzing disease tissue – and thus enabling new and valuable research constrained by limited sample amounts.

“Access to cutting-edge technology is key to taking on large-scale projects that will lead to the next generation of genomics resources,” commented Dr. Christian Burks, president and CEO of OGI. “The GTS program is meant to give genomics technology service platforms in Ontario, and scientists collaborating with them, an opportunity to explore and evaluate new technologies that might be used by or provided through the service platforms. We are particularly pleased to be partnering with the UHN Microarray Centre, which has a long track record at the leading edge of microarray applications.”

“This GTS investment will enable us to further evaluate and exploit the full potential of the nCounter™ technology, both as a next-generation gene expression platform, and potentially for a host of broader applications down the road,” said Neil Winegarden, head of operations at UHN Microarray Centre. “We plan to explore the type and degree of bias introduced by various amplification strategies, allowing us to improve or discontinue strategies with poor fidelity or reproducibility.”

The U.S. FDA has advised YM BioSciences Inc. (Mississauga, ON) that it may begin enrolling patients at U.S. Clinical sites into two ongoing randomized double-blind Phase 2 trials of its lead product, nimotuzumab. One of the two trials is in non-small-cell lung cancer (NSCLC) patients who are ineligible for curative treatment and being treated palliatively and the other in patients with brain metastases from NSCLC. Current NSCLC palliative treatment and treatment for brain metastases is radiation alone. YM BioSciences announced on August 10, 2009 that its wholly-owned subsidiary, YM BioSciences USA Inc. received a license from the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) that lifted the limitation on the development of nimotuzumab in the USA for patients with solid tumour cancers. The Phase 2 study that is examining the effect of nimotuzumab when added to palliative radiotherapy to treat intrathoracic disease from NSCLC, has a target enrollment of 128 patients and is being conducted internationally. Patients diagnosed with Stage 2b or 3 NSCLC ineligible for curative treatment, or Stage 4 NSCLC patients with progressive disease within the chest, are eligible to enroll in this study. Palliative radiotherapy is effective for improvement of symptoms resulting from lung disease, improvement in quality of life in one third of the patients and improvement of survival. Completed Phase 1 studies executed in Canada and Korea have demonstrated that nimotuzumab has the prospect of optimizing palliative care in this indication with initial stimulating results in this population. The primary objective of the trial is to evaluate the difference in overall survival between the arms with secondary endpoints being the differences in time to progression, response rate, quality of life and progression-free survival.

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R & D NEWS Oilseed project could be profitable for biofuels and aquaculture industries Research into camelina (False Flax), a plant many consider a weed because of its hardy growing nature, is now the subject of a research project which links researchers across Canada with others as far away as Germany. The project recently received $2.8 million from the Atlantic Canada Opportunities Agency’s Atlantic Innovation Fund. The money makes up a significant part of the project’s $6.1 million budget.

“It’s a project with enormous potential,” said Steve Armstrong, president and CEO of Genome Atlantic. “If we unlock the genetic clues to this plant, the benefits to Canada could be astronomical.”

Camelina is coveted because of its high oil content and therefore has many commercial possibilities. For example, in Atlantic Canada, the aquaculture industry is particularly interested in its potential as a replacement for fish meal and oils, which have cost and sustainability concerns.

Another area where Camelina could be profitable is the biofuels industry, where the

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plant’s oil could be used as a green source of fuel, especially for jets – one of the biggest carbon producers. Testing in the last 18 months has shown camelina to be an outstanding jet fuel replacement, with above average reductions in carbon emissions in production and processing.

Since the plant is known for its hardy growing nature, from an agricultural perspective, camelina can grow in harsher conditions than many other plants, meaning it can be grown on lands not reserved for food crops and could provide a rotational cash crop.

“The foundation of the genetic information, coupled with the immense expertise of the Canadian agriculture and aquaculture research community, could make this the next ‘made in Canada’ oilseed,” said Armstrong.

Among the Canadian institutions involved in the project are: the Nova Scotia Agricultural College, Memorial University of Newfoundland, Agriculture and Agri-Food Canada, the University of Saskatchewan and Genome Prairie.

MARCH 2010 BIOTECHNOLOGY FOCUS 7

R & D NEWS New NSERC funding for biopharmaceutical network

Neurons stained with antibody to microtubule-associated protein 2 (MAP2) (red) and monoclonal antibody (green).

The Natural Sciences and Engineering Research Council of Canada (NSERC) is granting $5 million over five years to create a strategic alliance known as MabNet. The research network, being launched by University of Manitoba microbiologist Michael Butler, is tasked with establishing the technology for the large-scale manufacture of Mabs (Monoclonal antibodies).

Led by Butler, the network will initially involve 20 professors based in nine Canadian

universities in collaboration with 12 Canadian biotechnology/pharmaceutical companies and three government institutions.

The MabNet plan is to integrate efforts from key players in Canadian biotechnology from industry, government and academia.

A growing area of treatment for cancer and other potentially deadly disorders is biopharmaceuticals, which provide patients with the disease-killing antibodies they aren’t producing but require to fight back.

These drugs, made of therapeutic human antibodies (known as Mabs), are so in demand that their global sales jumped from $300 million in 1997 to $25 billion in 2007.

“They are a new generation of drugs,” said Butler. “Given the global importance of Mabs for both economic impact and future health care, it is vital that Canada maintains a stake in this industry.”

Biopharmaceuticals are more difficult to manufacture than conventional drugs because they involve growing cells in cultures, a process that makes it more challenging to maintain consistency.

“This network will contribute to future developments in this important global market and, in the process, help those suffering from diseases like cancer, rheumatoid arthritis and coronary disease,” said Roy Roshko, acting dean of science at the University of Manitoba. “Butler is a pioneer in the research and development of mammalian cell technology and is the ideal candidate to lead such a network.”

“This substantial funding from NSERC is testament to the strength of Butler’s expertise in this growing field of scientific study,” said Digvir Jayas, vice-president, research, at the University of Manitoba. “We will lead the way in developing this network that allows for the sharing of knowledge and exciting new collaborations.”

Dealmakers n Novozymes (Saskatoon, SK) and ProMetic Life Sciences Inc. (Mount-Royal, QC) have entered into an alliance regarding proprietary albumin purification technology based on a synthetic-ligand affinity adsorbent developed by ProMetic’s UK subsidary, ProMetic Biosciences Ltd. The purification technology has been designed for the rapid and cost-effective development of Novozymes’ albufuse® albumin-fusion molecules. Under the terms of the co-marketing alliance the companies will jointly promote the use of a new synthetic-ligand affinity adsorbent, marketed under the trade-name AlbuPure® , as a platform approach for the purification of albumin and albumin-fusion proteins. ProMetic will be the exclusive manufacturer and supplier of AlbuPure®, however both parties will retain ownership of their respective technologies and both Novozymes and ProMetic will have the right to market AlbuPure®.

Therapure Biopharma Inc. (Mississauga, ON) and LFB Biomedicaments, a wholly n

8 BIOTECHNOLOGY FOCUS MARCH 2010

owned subsidary of LFB S.A, a French biopharmaceutical company, have signed a toll manufacturing agreement under which Therapure will manufacture key plasma proteins to support an expansion by LFB into global plasma derived medicinal markets. Therapure will be responsible for the manufacture of two major plasma proteins and LFB will remain responsible for global regulatory approvals and marketing of these products. Therapure will retrofit its Health Canada licensed manufacturing facility to accommodate the installation of LFB proprietary technology and processes necessary to meet its manufacturing obligations. The companies expect the facility to be completed in 2011. Qualification and validation process, including regulatory batches, will be performed in 2012 in order to complete the regulatory approval process in the course of 2013. n YM BioSciences Inc. (Mississauga, ON) has concluded a merger of Cytopia Limited, the Australian biopharmaceutical company, into

YM under a Scheme of Arrangement. “With the completion of this transaction, our pipeline has been expanded to incorporate Cytopia’s two lead clinical candidates, CYT387 and CYT997 and its impressive pre-clinical library,” said David Allan, chairman & CEO of YM BioSciences Inc. “Both these clinical molecules, as nimotuzumab, are compounds in families of demonstrable interest to the global pharmaceutical industry for which benchmarks of value have been clearly established. CYT387’s initial indication, for example, is myelofibrosis, a disease that affects approximately 20,000 patients in North America. Market estimates for this indication alone exceed $750 million.” Under the terms of the merger transaction, YM has issued 7,276,688 YM shares to former Cytopia shareholders as consideration for all the issued and outstanding Cytopia shares. YM is also pleased to announce that Mr. Robert G.C. Watson, former chairman of Cytopia, has been appointed to YM’s Board of Directors.

BUSINESS CORNER Chemaphor project will receive share of new federal investment to continue its development of products that are slated for commercialization in companion animal and food production animal markets.”

The Chemaphor Inc. Project in Charlottetown is a “Natural, Non-Antibiotic Products Enhancing Food-Animal Products,” and is based on the development of OxBC, a natural carotenoid oxidation product with the demonstrated ability to enhance animal immune systems. In this project, Chemaphor will evaluate OxBC as a natural means of improving livestock immune systems, in turn reducing the need for antibiotics, a major concern within the global agricultural industry.

Based on today’s announcement, this project, with total estimated costs of $3.8 million, is anticipated to receive approximately $2 million from the Atlantic Innovation Fund over a three-year period. The timing of such advance of funds and the terms of such advance remain subject to negotiation and the execution of definitive agreements.

ACOA’s Atlantic Innovation Fund encourages the commercialization of research in Atlantic Canada and has been a key driver

Chemaphor Inc. will receive a share of federal investment in R&D growth in Atlantic Canada. Announced by the Honourable Keith Ashfield, Minsiter of National Revenue, Minister of the Atlantic Canada Opportunities Agency and Minister for the Atlantic Gateway, the new federal investment of $62.4 million under round 7 of the Atlantic Innovation Fund (AIF) will aid R&D around Atlantic Canada.

“We are investing in realistic and achievable projects,” said Minister Ashfield.

“Projects that will advance our innovation and knowledge capacity, generate a range of alternative technologies, and develop leading-edge products and processes.”

“We are delighted and gratified that our project has been selected for continued support from the AIF” said Dr. Paul Dick, CEO of Chemaphor. “The existing support from AIF has been critical to the set-up and development of our biological R&D operation in Charlottetown, which in turn has provided the company with an important innovative edge in the development of novel wellness products for animal health. The new support from the AIF will be of major help in allowing Chemaphor

for many Atlantic Canadian businesses, universities and research institutions. It has enhanced Atlantic Canada’s reputation for innovation and, through the success of the projects it has funded, the AIF contributes significantly to the region’s research and development capacity and its economic performance.

Health Canada approves Afinitor

Novartis Pharmaceuticals Canada Inc. announced that Afinitor® (everolimus), a once-daily oral cancer treatment, has been approved by Health Canada for patients with metastatic renal cell carcinoma (mRCC), also known as advanced kidney cancer, after failure of initial treatment with VEGF-receptor targeted therapies Sutent® (sunitinib) or Nexavar® (sorafenib). Afinitor® represents the first proven treatment option for patients whose cancer progressed despite prior targeted therapy with Sutent® or Nexavar®.

“We have seen tremendous developments in the treatment of kidney cancer, as new targeted therapies are helping pa-

tients manage a difficult-to-treat disease that is often diagnosed at advanced stages.

But for patients with advanced disease who have failed on initial therapies, access to new treatment options is urgently needed,” said Deborah Maskens, Vice-Chair, Kidney Cancer Canada. “Afinitor is an important new option for sequential treatment, and brings new hope to Canadians living with kidney cancer.”

Renal cell carcinoma (RCC) is often referred to as kidney cancer. It is estimated that 4,600 new cases of kidney cancer developed in Canada in 2009 and 1,600 people died from the disease “With nearly 40 per cent of renal cell carcinoma patients diagnosed at an advanced stage, new treatment options like Afinitor are essential to help these patients battle their disease,” said Dr. Sebastien Hotte, Medical Oncologist, Juravinski Cancer Centre, and contributing investigator of the RECORD-1 trial, the basis for Health Canada’s approval of Afinitor. “Prior to this approval, patients with metastatic renal cell

carcinoma had limited options once they experienced tumour progression after VEGF-receptor targeted therapy. Based on clinical trial data, Afinitor should be considered standard therapy when VEGF-receptor targeted therapy fails.”

Prior to Afinitor, no other therapy has been studied in a Phase III trial in this patient population where there is an important unmet medical need. Sutent and Nexavar are commonly used as initial treatments for metastatic RCC. The approval is based on data that showed Afinitor, when compared with placebo, more than doubled the time without tumour growth or death in patients with metastatic renal cell carcinoma (4.9 vs. 1.9 months) and reduced the risk of disease progression or death by 67 per cent (hazard ratio=0.33 with 95 per cent confidence interval 0.25 to 0.43; P less than 0.0001).

Furthermore, additional data show that after ten months of treatment with Afinitor, approximately 25 per cent of patients still had no tumour growth.

MARCH 2010 BIOTECHNOLOGY FOCUS 9

HOT BUTTON ISSUES

Canadian Life Science //Compiled by Shawn Lawrence

Survey says:

Funding gap widens as biotech remains neglected in Canada With this, our fourth Hot Button Issue, Biotechnology Focus once again polled its readHOT ersBUTTON from both industry and academia to list their personal top three priorities they’d likeISSUES to get before government. What comes from their answers is a powerful tool highlighting the issues the sector faces going forward and what government needs to do to help the industry compete at the highest possible level.

From our reader’s responses, it’s abundantly clear that the business of biotech in Canada is faring poorly, while research in general is suffering from a funding shortage.

Many respondents expressed concern with how under funded the industry is at the commercialization stages, a situation that has been worsened by a general capital shortage.

“Sluggish and sputtering,” is how one reader described the situation while adding that biotech companies that had finances in place prior to the downturn are barely surviving.

Worse still, almost 80 per cent of respondents that took our surveys felt the worst of the economic downturn isn’t over. Further complicating matters, the venture capital sector has altogether stopped investing in Canadian companies simply because investors find them too risky due to their characteristically small size and pipelines.

Derrick Rancourt, associate professor, University of Calgary comments, “Although Canada has the most number of biotech companies in the world on a per capita basis, they are all one hit wonders that are likely to fail. Research innovators such as my self are getting burned by the lack of VC. What’s the point of patenting our inventions if we cannot move them through the product development stage?”

Many of our readers were equally frustrated, expressing that they felt that their calls for help to government have fallen on deaf ears. In fact, approximately 91 per cent of respondents from our research survey and 95 per cent from the C-level executive survey stated they believe government isn’t listening to what the industry and sector is trying to tell it.

So what’s behind this lack of confidence? For starters, while much of the poor performance of the industry can be attributed to the chaotic market place, there is also a general feeling that government isn’t doing enough to improve the situation. Current investment trends in Canada both in public and private sectors have affected business.

In particular, the shortage of Canadian investors has had a negative impact on the availability of capital. Likewise, the few investments that are being made are coming from foreign interests, which further down the road could lead to Canadian companies packing-up shop and moving elsewhere. Giving financial support to struggling companies, offering corporate tax incentives to potential domestic and foreign venture capital investors who invest in Canadian companies, providing government grants to both companies and research institutes that desperately need them, and offering low interest loans to Canadian companies are just some of things that government could be doing to ease the burden. The shortage of available capital has also forced companies to reduce staff causing paralysis of operational activities. On the research side, there are similar rumblings of unrest with lack of operational funding a chief concern. In fact, almost 94 per cent of respondents that took our research survey said that they found granting and financing opportunities harder to come by in 2009 then in past years.

Offering a solution to the problems industry faces, Ann Hanham, managing director and general partner of Burrill & Company states, “Government needs to provide stimulus funding (not just in research but in commercialization) to venture capital and experienced entrepreneurs. Tax incentives would also be extremely helpful to defray staffing and research & development costs.”

Moe S. Aziz, president and CEO, Sino Pharmaceuticals Corporation adds, “Government needs to prioritize the life sciences industry as a key, strategic industry in Canada that is vital to Canada’s economic interests and has the potential to generate significant employment and economic GFP growth. Then it needs to develop a clear, coherent, long term development plan for the life sciences industry.”

10 BIOTECHNOLOGY FOCUS MARCH 2010

In addressing the concerns on the research side respondents said they’d like to see government come up with a structured strategic plan balancing investment into new equipment and infrastructure, as well as the creation of career positions for scientists. Essentially they’d like to see a substantial ramp up of direct and indirect operating funds.

“There has been excellent support for infrastructure through the CFI program. As well, highly qualified re-

?

Do you feel that government is listening to what the life science field is telling it?

(Research Organization response)

91%

9%

Yes 9% No 91%

?

Do you find granting and financing opportunities? (Research Organization response)

94%

5% 1% Easier to come by: 1% The same: 5% Harder to come by: 94%

Canadian Life Science

?

Do you feel that government is listening to what the life science field is telling it?

(C-Level Executives)

95% 5%

Yes: 5%

?

No: 95%

Do you feel the worst of the economic downturn is over? (C-Level Executives)

80%

20%

Yes: 20%

?

No: 80%

Do you feel that the Canadian Biotechnology and Life Science sector is doing an adequate job of recruiting and retaining talent? (C-Level executives)

80%

20%

Yes: 20%

No: 80%

HOT BUTTON ISSUES

searchers have been recruited through the CRC program. Unfortunately, infrastructure and researchers sit idle because growth in operating funds have not kept pace,” stated Dr. Jeffrey Dixon, University of Western Ontario.

At the heart of the matter is the fact that Canadian scientists and companies feel neglected, that government doesn’t understand their issues, and that more leaders who understand the value of science are needed in government positions. The Canadian government’s choice of a chiropractor as a science and technology minister also hit a major sore spot based on the responses.

“The choice of leadership sends the message that science is not a serious or worthwhile endeavor here in Canada and is consistent with the operations of a governHOT ment where the opinions and input of scientists is generally overlooked and thus not BUTTON valued,” stated Earl Brown, University of Ottawa.

ISSUES Moreover, respondents felt that Canada should follow the lead of the U.S., where U.S. President Barack Obama appointed Steven Chu, the Nobel laureate to lead the U.S. Department of Energy.

Likewise, there were many negative comments as to how Canada’s science policy stacks up against countries like the U.K., the U.S. and the European Union.

“There is no coherent, articulated, long term Canadian science policy. Whatever exists is myopic, reactionary and ill-conceived unlike most other countries. The Government should take a look at Taiwan’s life sciences policy and Tianjin’s (TEDA’s) if they lack the knowledge and foresight…Their government’s have invested heavily in public life sciences infrastructure (life science parks, R&D facilities, pharma facilities, clean rooms, etc.), which private companies can use as a springboard because this is the major capital outlay that life sciences companies face,” stated Aziz.

Our readers also had strong opinions about which stakeholders deserve priority in steering science policy and creating a sustainable biotechnology/life science cluster here in Canada, stressing the importance of participation by non-government organizations, scientists in industry, institutes and academia, as well as entrepreneurs active involvement in this pursuit.

“There has to be a shared responsibility between the public, private and academic sectors. We must overcome this us-versus-them situation which is confounded by the politicians who use this divide and rule by their funding decisions,” stated one Canadian biotech CEO. One only needs to look at the Hot Button issues of 2009 to understand that funding is not the only issue that has grown even more desperate in 2010. Many still find the Canadian Biotechnology and Life Science sector is doing a less than adequate job of recruiting and retaining talent.

“At the grassroots level, giving our young people a real incentive to choose science as a career should be a priority. This is hard to do when many really young bright people realize that after a long haul (at least eight years of University to get a PhD) there is no job security and salaries are lousy in spite of the long hours of work,” stated one respondent who wished to remain anonymous because of affiliations.

“The problem is providing the resources to enable the talented player to reach full potential – Canada risks a second brain drain,” states Alison Buchan, executive associate dean of research at UBC. “There has been some semblance of a renewed focus of funding on infrastructure, but to ensure future excellence we require increased funding of operating costs, in particular salaries to retain highly trained personnel,” explains Dr. Robert Nabi, a professor at UBC. Others such as Earl Brown add, “Canada has a high standard of education but the greatest brain-drain is our failure to support our own scientists. The government needs to become conversant with the process of science that requires a continuous effort that cannot be turned off or on.”

Many respondents offered advice such as: allowing young scientists to explore their ideas through targeted innovation, offering high risk funds, and fostering an environment which supports risk. Also teaching MSc and PhD students how to commercialize their research would go a long way. And of course, encouraging commercialization of ideas was high on most lists.

“We cannot just focus on universities because much of the fruit of their research is lost or stays at the university level in the current system,” states Yves Rosconi, CEO Theratechnologies. “We need to have a well thought out plan to move innovation as far along the value chain as possible.”

MARCH 2010 BIOTECHNOLOGY FOCUS 11

HOT BUTTON ISSUES

Canadian Life Science // by peter van der Velden

W

HOT BUTTON ISSUES

Access to capital will be defining for many Canadian biotech companies in 2010

hen I was asked to write about a venture capitalists’ view on “hot button” issues facing the Canadian biotech industry, I initially considered many of the topics that typically drive the conversations amongst our partners, peers, and the CEOs in whom we invest: What will be the next big trend?; What will be the impact of healthcare reform in the US, particularly for new and emerging technologies?; Will big pharma continue to consolidate and/or broaden its scope beyond its traditional business model to cope with the challenges of the “patent cliff’ and lack of internal productivity?; How can we help our medtech companies more successfully cross the chasm from development to commercialization?; Is the current momentum in biotech M&A sustainable?; Are there better business models we need to consider in the financing of emerging companies?; Will there be a meaningful IPO window in 2010?; Will the pace of new biologic approvals at the FDA continue to grow and will biologics continue to emerge as an ever bigger proportion of those approvals?

Unfortunately, it didn’t take much evaluation to come to the realization that all of those issues are currently taking a very big back seat to one critical issue in this country. For emerging private health and life sciences companies in Canada the defining issue in 2009 was access to capital and this will continue in 2010. This issue is so prevalent that while speaking at a luncheon address to the New England-Canada Business Council in January 2010, Industry Minister Tony Clement, in following up on a discussion about a funding gap for U.S. biotech companies, stated “We don’t have a funding gap in Canada, we have a funding chasm.”

Having stated that access to capital is the hot button issue for 2010, I guess I should probably support that statement with some data. Let’s first take a look at where institutional money has historically been invested in Canada. From 2004 to 2008, private Canadian life science companies attracted close to $2 billion in new capital, with the vast majority of this capital flowing to early stage companies. In fact, during this period, funding levels for early stage companies pretty much followed the 10 per cent rule relative to levels in the U.S., with the real differential coming in terms of the

Funding Gap in Canadian VC ­– Health and Life Sciences 2004-2008 USA(M)*

Canada(M)*

% of USA

Shortfall

Total Invested

$38,708

$1,870

4.83%

$(2,001)

Early Stage

$9,463

$1,025

10.83%

78

Late Stage

$28,958

$846

2.92%

(2,050)

Rat of Late to Early Stage

3.06

0.83

Predicted Late Stage Funding ***

$28,958

$3,135

Short fall in Late Stage Funding

12 BIOTECHNOLOGY FOCUS MARCH 2010

$2,289

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Reply Card #4688

HOT HOT BUTTON BUTTON ISSUES

ISSUES

Canadian Life Science

Institutional Disbursements to Canadian Private Health and Life Sciences Companies Early HOT BUTTON vs. Late Stage ISSUES Deals HOT BUTTON ISSUES

Angel Financings in Canadian Private Life Sciences Companies

Financings in Canadian Public Life Science Companies

0.25 Cost of fiscal incentives (typically R&D tax creadits)

0.20

% of GDF

Government Funding of Business R&D*

Direct government funding of Business R&D

0.15 0.10 0.05 0.00

U.S.

Canada

U.K.

Netherlands

Australia

Japan

*2005 date or last year available

Government funding of business R&D, whether through direct grants or tax credits, is a relatively small proportion of BERD in most DECD countries (e.g., about 20% in Canada). The use of tax-based incentives has been increasing in the OECD group, but Canada is unusual in its almost exclusive reliance on the SR&ED incentives.

14 BIOTECHNOLOGY FOCUS MARCH 2010

funding for later stage companies. We estimate that during this period, an approximately $2 billion deficit accumulated in terms of the amount of capital required to transition companies from the research and pre-clinical phase of development through to the clinical phase of development, where the average biotech will consume approximately 80 per cent of the total capital required to build and define the value of its products.

The accumulation of this financing deficit accelerated markedly through 2008 and 2009 as all forms of financing plummeted and investors began to focus their limited resources on maintaining and supporting their existing portfolio companies. The approximately $100 million invested in later-stage opportunities in 2009 addressed only a trivial proportion of the accumulated capital deficit. Still worse, the majority of these financings represented “survival capital,” in that while it allowed these companies to exist, it did not allow them to prosper and actually build value by advancing their development programs. The problem in Canada has been further exacerbated by the fact that during this same period, U.S.-based VC funds, one component of the funding ecosystem in Canada, fled the Canadian market, focusing instead on existing portfolios and new opportunities that were closer to home (it appears that 2009 was the first year since 2000 that no private Canadian life science company received a material first-time investment from a U.S.-based VC). Unfortunately we see little reason to believe that this will change in the near term. While U.S.-based life science and medtech focused VCs closed 46 new funds in 2008 and 2009 combined, in Canada for the comparable period the number is zero.

Funding issues for Canadian life science and medtech companies have not been confined to just the private companies or institutional sources of capital. While angel investors fought the brave fight and increased their commitments to the sector through 2007, the past two years broke that trend and today we are seeing angel funding levels back to those at the beginning of the decade. At the same time, the angel deals that were done in 2009 were very concentrated with only a few companies garnering the bulk of the angel capital; a trend we expect to see continue in 2010. On the public side of the equation the story has been more or less the same.

While biotech and medtech companies enjoyed steady, albeit not spectacular levels of funding prior to 2007, in 2008 public market financings plummeted to the lowest levels in a decade. The latter half of 2009 showed signs of life, but even so funding activity was still at less than 50 per cent of the levels seen in prior years.

One would of course be remiss in discussing the access to capital issue if one did not look at other “non-dilutive” sources of capital. While the recession in 2009 prompted the Obama administration to announce $5 billion in new research grants for the U.S. National Institutes of Health (which already spends more than $30 billion a year on medical research) a similar response has not been forthcoming in Canada. In fact, in Canada the problem was even more insidious, as amongst OECD countries Canada is the highest in terms

Canadian Life Science

of providing financial support for R&D in emerging companies via tax credits as opposed to direct cash contributions. The problem is that this results in a negative double whammy in times when investment capital is tight. In 2009, the recession, coupled with the lack of fresh capital, caused virtually all emerging companies to markedly reduce business expenditures in general and discretionary R&D spending in particular. So just when active engagement and participation by the federal government was needed the most the response, albeit a passive one, was to reduce its financial support for the sector, thereby further compounding the problem.

In fairness, while the lack of additional direct R&D support remains outstanding, virtually all the provinces and to some degree the federal government (via new initiatives at EDC and BDC) have acknowledged the dearth of domestic venture capital and responded by launching a variety of new programs and initiatives (Teralys Capital in Quebec, the Ontario Venture Capital Fund, the Alberta Enterprise Corp. and the Renaissance Capital Fund in BC to name a few). Unfortunately, what is preventing these initiatives from quickly providing capital relief is to some degree the lack of engagement and participation of co-investors such as Canadian banks, pension funds and endowments who were historically the key sources of institutional capital in Canada for the venture sector and whose U.S. peers remain the backbone of the U.S. venture ecosystem. During the past four years dozens of these players in Canada have dropped venture as a supported alternative asset class.

This, despite the many positive changes the Canadian VC industry has gone through, and despite the growing success stories of new managers and managers like ourselves who have made a substantial commitment to change and are delivering substantial value to our limited partner investors (to learn more I invite you to attend the CVCAs annual conference in May 2010 which this year is focused on “Driving Innovation”).

Hopefully the recent $400 million venture fund of funds commitment by CPPIB to Northleaf Capital is a sign of better things to come.

Finally the lack of capital also appears to reflect a growing lack of engagement from some (though admittedly not all) of the established biotech and pharma players in the Canadian market who collectively generated $16 billion in Canadian-based revenues in 2008 (a 52 per cent growth since 2001). During the past seven years this group has steadily reduced its R&D commitment in Canada below the 10 per cent threshold level that was the basis of the “hand shake” agreement that accompanied the passage of bill C-22 in 1988. In fact at eight per cent, the reported level R&D spending in 2008, the “deficit” was $364 million, or more than twice the amount of VC capital deployed in 2009. Interestingly we are now seeing some of these same players committing substantial resources to the venture ecosystem in other countries such as France, where nine big pharma players (only two of whom are headquartered in France) have committed 63 per cent of the capital for a new fund to be managed by CDC Entreprises and focused on later-stage biotech and life

HOT BUTTON ISSUES

science opportunities in that country.

So that’s the “hot botton issue.” Where will emerging Canadian biotech companies find the capital to continue to successfully build their businesses? The key thing to consider is not just the issue per se, but rather the opportunity that this issue underpins. During the past decade Canada has poured billions of dollars into building a viable biotech industry, and as a result today the Quebec/Ontario corridor is defined as the 3rd or 4th largest biotech cluster in North America, BC has produced handfuls of world class companies, and provinces like Alberta, Manitoba, PEI and Nova Scotia, not generally considered biotech hubs, have produced their share of significant success stories. Today, we are at a tipping point and it has come time for governments, HOT established and emerging pharma and biotech companies alike, pension BUTTONfunds, academics, investment bankers, venture capitalists, and all others in the life sciences ISSUES ecosystem to make a choice: engage and work to implement solutions that benefit all these stakeholders (and in doing so grow the pie for everyone) or squander it all and watch Canada lose its foothold in a key knowledge-based industry that accounts for $45 billion of annual spending and that constitutes the backbone of many of the academic institutions across this country.

Peter van der Velden is the President and CEO of Lumira Capital, a leading North American life sciences venture capital firm with its head office in Toronto, and offices in Montreal, Boston , MA and Mountain View, CA

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MARCH 2010 BIOTECHNOLOGY FOCUS 15

HOT BUTTON ISSUES

Canadian Life Science // By James Smith and Wayne Schnarr

Canadian Healthcare

in 2009: HOT BUTTON ISSUES

Survival, Success, Surrender

Public Canadian healthcare companies operate in a complex, challenging and constantly changing global environment. In 2009, some companies celebrated success, while most focused on survival; unfortunately, a few of them did not make it. Considering the combination of increased financing, partnerships, share price increases and several positive clinical and regulatory events, 2009 was a good year for the sector. However, this positive performance was overshadowed by a few clinical failures that landed in the headlines, coupled with the lack of a defining positive event in the sector. There are a number of clinical and regulatory events expected in 2010 and a series of positive results could provide some upward momentum and renew investor interest in this sector.

Sector Performance in 2009 Money is the asset in greatest demand and shortest supply in the healthcare sector.

The demand has consistently grown as new companies were formed and existing companies moved on to more expensive later-stage clinical trials. Supply constraints were worsened even more by the 2008/2009 financial crisis.

In 2009, the sector raised a total of about $1.28 billion from equity and convertible debt financings (see Figure 1). Excluding large financings by Biovail and SXC Health Solutions, the rest of the sector raised $654 million, which is substantially better than the 2008 total but is still far below the annual average of almost $1.05 billion for 2005 through 2007. Excluding Biovail and SXC, 18 companies each raised more than $10 million dollars, which would be sufficient to fund small clinical programs. However, many of the 2009 financings were only large enough to allow companies to survive, which means additional funding will be required soon.

Partnerships are the second major source of financing for smaller healthcare companies. A series of material licensing agreements were announced in 2009 (see Figure 2) that totaled U.S.$212 million in up front payments and U.S.$1,868 million in other potential milestones.

Partnerships are essentially exclusive option agreements. When clinical or market data do not support continued product development, the partners typically terminate the agreement. As an example, the cetrorelix partnership between Aeterna Zentaris and Sanofi-Aventis was signed in 2009 but, after two failed Phase 3 clinical trials, it was terminated.

The average share price return in 2009 for a group of 32 larger Canadian healthcare companies was +100 per cent (see Figure 3), compared to +31 per cent for the TSX Composite Index. Advancers outnumbered decliners by 26 to six, with five of the six decliners in the Therapeutics group. Nine companies had share price returns of 200 per cent or higher.

Specific events are often critical to the investment strategies of many investors in the healthcare sector. For profitable healthcare companies, the critical events are no different than those found in other sectors: the release of quarterly results; acquisitions of new products and revenue-generating assets; or new service contracts. But for companies still developing products, share price movement is triggered most often by three other types of events: clinical data, regulatory decisions and partnerships.

There were a significant number of positive events of these types in 2009 (see Figure 4) for Canadian healthcare companies.

16 BIOTECHNOLOGY FOCUS MARCH 2010

Investors’ Perception of the Sector While the average share price return for the sector in 2009 was certainly positive for investors, their overall perception of the sector can be swayed by negative events. For example, when a Phase 3 clinical trial fails, the market cap of the company can drop below its cash value. BioMS certainly experienced that in 2009.

The impact of other negative clinical results is also dramatic, such as the 55 per cent drop in Transition Therapeutics’ share price when it had to modify a Phase 2 trial of ELND005 due to safety concerns. These negative events and resulting large share price declines can become headlines that paint the sector in a negative light, whereas positive clinical results, regulatory approvals and solid quarterly results sometimes get little attention.

Most Canadian healthcare companies must have institutional investors in order to raise sufficient capital to develop their products. However, Canadian institutional investors in healthcare are generally small-cap funds that typically do not allocate a specific portion of their portfolio to healthcare stocks and often prefer to look at natural resource companies. Therefore, Canadian companies must look to the U.S., Europe and Asia for additional funding. But attracting the attention of these investors is challenging. When a small-cap Canadian healthcare company goes to New York, it is competing with not only its Canadian peers but with more than 1,000 other public and private healthcare companies.

Retail investors are equally challenging and important to small-cap Canadian healthcare companies.

Many retail investors have less investment experience and access to less sector information than their institutional counterparts. Their response to both bad and good news can lead to increased share price volatility.

However, they are the only source of liquidity for some stocks where institutional and venture capital ownership is too high. They are also the shareholders who stepped up and provided survival funding to some of the smaller companies during 2009.

Investment strategies in the sector can vary widely.

Value investors focus on dividends, distributions and business fundamentals, and are more likely to be ‘buy and hold’ investors. Another group of investors has a substantially higher risk tolerance and is focused on extraordinary capital gains. Like many investors in junior natural resource companies, they focus on data, be it clinical or drilling results, which can dramatically impact share prices. Many of these investors will have shorter investment horizons and may actually own a stock several times during the longer product development cycles in this sector.

Canadian Life Science

WHat can inFluence an investor to consider buying a HealtHcare stocK?

HOT BUTTON ISSUES

WHat are some oF tHe reasons For an investor to consider selling a HealtHcare investment?

acquisitions: Companies can acquire products, new service contracts and revenue-generating assets in order to grow revenue and earnings.

milestone events: Investors can take several different approaches to selling around events. Some investors do not want to own shares through an event and will sell prior to the event. Other investors make the decision to sell after the event, regardless of the outcome.

Financings: For many Canadian companies, institutional funds only buy when there is a financing because there is insufficient liquidity to accumulate a position in the market.

HOT

low valuations: Many Canadian healthcare companies were trading at historic low share prices between October 2008 and March 2009, creating an opportunity for ‘bottomfishing’. There were a number of companies whose share prices doubled or more from these lows, such as Angiotech rising from below $0.20 in December 2008 to a 2009 high of $3.10.

lack of events: Investors may sell if there are no preBUTTON dictable events in a given time period which are likely to ISSUES significantly impact the share price. low cash levels: If a company does not have enough cash to reach its next important milestone, investors may prefer to wait until a financing is completed which would allow them to reach that milestone.

impending clinical and regulatory events: Companies inform the market about the approximate timing of data releases, giving investors an opportunity to invest prior to the events. positive events: Some investors are unwilling to risk investing prior to an event but are willing to accept the reduced risk after a positive event.

Hot technology or target: Biological products are hot, partially because generic competition will likely be more difficult. The hottest type of biologic is still monoclonal antibodies, which has led to the acquisition of many companies, including Arius Research by Roche in 2008. Vaccines were hot in 2009 as a result of the H1N1 flu pandemic but the interest has diminished since the pandemic severity was much lower than expected.

Two important types of events are missing from the 2009 list which might have changed the perception of the Canadian sector: positive Phase 3 clinical data or regulatory approval of a blockbuster drug, and a major acquisition, such as the 2008 acquisitions of Arius Research by Roche and CryoCath by Medtronic.

Events like these are not on the Canadian list every year. In fact, Canadian healthcare companies have only produced one drug for which sales exceeded U.S.$1 billion annually – BioChem Pharma’s 3TC. Previous high profile acquisitions of Canadian healthcare companies involved BioChem Pharma (2001), ALI Technologies (2002), ID Biomedical (2005) and AnorMED (2006). The only major acquisition in Canada in 2009 was the private company ViroChem Pharma

by Vertex Pharmaceuticals for U.S.$100 million cash and about 10.7 million Vertex common shares (U.S.$42.85 closing share price on December 31). The absence of these ‘home runs’ from the Canadian list is exacerbated by the seemingly continuous flow of these major events from U.S. companies.

Outlook for 2010 Although public Canadian healthcare companies have no control over many factors in the broader financial and healthcare environments, they do have control over their technology and product development strategies. Each clinical program should be planned and executed to

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Reply Card #4690 MARCH 2010 BIOTECHNOLOGY FOCUS 17

Focus

HOT BUTTON ISSUES

Canadian Life Science

Figure 1. Financing by Canadian Healthcare Companies in 2009 Amount ($ million) Industry group Equity Convertible Debt Total Therapeutics

251.2

6.3

257.5

Services

180.9

22.0

202.9

Devices & Diagnostics

80.4

10.4

90.8

Others HOT Total BUTTON ISSUES *Excludes Biovail and SXC Health Solutions

77.7

25.1

102.8

590.2

63.8

654.0

Source: Company releases, compiled by Equicom

Figure 2. Licensing Deals by Canadian Healthcare Companies in 2009 Licensor/Licensee Product Upfront / Other Market Milestones (U.S.$ M) OncoGenex g Teva

OGX-011

$60 / $370

Global

Cardiome g Merck

Vernakalant

$60 / $640

Oral (global) and iv

(oral and iv)

(ex-North America)

Acadia g Biovail

Pimavanserin

U.S., Canada

$30 / $365

Aeterna Zentaris gsanofi-aventis

Cetrorelix

$30 / $135

U.S.

Bioniche g Endo

Urocidin

$20 / $110

U.S., option on global

Nuvo Research g Covidien

Pennsaid

$10 / $115

U.S.

Thallion g LFB

Shigamabs

C$2 / C$148

EU, S. America

SNALP

-- / $40

Two products, global

Tekmira g Roche

Technology TSO3 g 3M

STERIZONE

No disclosure of financial terms

Toray g Spectral

Toraymyxin

No disclosure of financial terms

Source: Company releases

Figure 3. Share Price Performance in 2009 Therapeutics (15 companies)

53%

Nuvo Research

220%

YM Biosciences

215%

Devices & Diagnostics (5 companies)

149%

Angiotech

264%

IMRIS

253%

Services (7 companies)

140%

SXC Health Solutions

481%

Centric Health

236%

Others (5 companies)

139%

Neptune

248%

Afexa

208%

Sector (32 companies)

100%

TSX Composite Index

31%

TSX Venture Composite Index

93%

NASDAQ Biotech Index

12%

Source: TSXconnect 18 BIOTECHNOLOGY FOCUS MARCH 2010

deliver data that, if positive, will allow companies to do several things. First, the clinical information will allow the company to properly plan the next stage of clinical development. Second, the positive information may allow the company to obtain additional funding. Third, positive information will allow the company to start or progress discussions with potential partners.

A number of companies have indicated that they are in partnering discussions but it is impossible to predict when, or even if, partnerships will be signed. A couple partnerships with major pharmaceutical companies, including large upfront payments, might help change perceptions. Partnering discussions that turned into acquisitions would also be viewed positively by the financial markets.

While the sector could certainly use a little luck to catch the attention of potential investors, there are a number of clinical and regulatory events in 2010 that could also provide some positive momentum.

There are three PDUFA dates in the first quarter: February 6 for IntelGenx’ CPI-300, February 11 for Labopharm’s trazodone and March 29 for Theratechnologies’ tesamorelin. Other companies expecting regulatory decisions on their products in 2010 include Cangene,

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HOT HOT BUTTON BUTTON ISSUES

ISSUES

Canadian Life Science

Figure 4. Selected Positive Clinical, Regulatory and Partnering Events in 2009 Therapeutics Allon: positive data from Phase 2 trial in schizophrenia-related cognitive impairment BioMS & Spectral: partner for development of Toraymyxin (Spectral licensed US rights from Toray) HOT BUTTON Bioniche: partnership with Endo for Urocidin; enrolment complete in first Phase 3 trial ISSUES Biovail: licensed pimavanserin and acquired worldwide rights to tetrabenazine HOT BUTTON Cangene: acquires commercialization rights to certain biotech drugs from Apotex and positive EMA opinion on HepaGam B ISSUES Cardiome Pharma: more positive Phase 3 data on vernakalant (iv) and partnership with Merck Labopharm: FDA approval of RYZOLT (actually 31/12/2008) Nuvo Research: U.S. partnership with Covidien and FDA approval for Pennsaid Oncolytics Biotech: reaches SPA with FDA for Phase 3 trial of REOLYSIN Paladin Labs & Isotechnika: partnership for voclosporin Tekmira: agreement with Roche to advance two RNAi products to the clinic Thallion: partners Shigamabs with LFB Theratechnologies: NDA for tesamorelin filed and accepted for review by FDA YM BioSciences: U.S. Treasury clearance to conduct nimotuzumab trials; proposal to acquire Cytopia (now completed) Devices & Diagnostics Novadaq: FDA clearance of SPY endoscopic imaging system SQI Diagnostics: FDA cleared their SQiDworks™ Diagnostics Platform and its IgXPLEX RA assay TSO3: STERIZONE supply and distribution agreement with 3M Services Centric Health: acquisition of Active Health and alliance with INTERxVENT Canada Chartwell: acquisition of additional retirement home interests CML Healthcare: acquisition of U.S. medical imaging centers Extendicare: 3 U.S. class action lawsuits thrown out by courts SXC: several significant new U.S. PBM contracts Others Afexa: new product launches to complement ColdFX franchise Atrium: acquires additional U.S. nutritional brand products GLG Life Tech: expands stevia leaf harvest and manufacturing capacity Noveko: signs new distribution and marketing agreements, including Microban Source: Company releases

Cardiome Pharma, Isotechnika (for Lux Biosciences’ LUVENIQ) and SQI Diagnostics.

Phase 3 clinical data can also prove to be a catalyst to attract investor attention. Pivotal data is expected from Aeterna Zentaris, Bioniche, Cardiome Pharma, Wex Pharmaceuticals and YM Biosciences and new Phase 3 clinical trials are expected to be started by Bioniche, Biovail, Cardiome Pharma, Oncolytics Biotech and Spectral Diagnostics.

Two companies have already reported statistically significant results in 2010 from controlled Phase 2 clinical trials. Primary clinical endpoints were achieved by Protox Therapeutics’ PRX302 as a treatment for benign prostatic hyperplasia and Transition Therapeutics’ TT-223 in type 2 diabetes. Further positive results from the series of clinical and regulatory events expected in 2010 could build on this solid base to create some upward momentum and renew investor interest in this sector.

20 BIOTECHNOLOGY FOCUS MARCH 2010

This article is based on the Equicom report “Survival, Success, Surrender: Review of the Canadian Healthcare Sector in 2009” (see Legal Notes, Disclosures and Disclaimers in this report). A copy of the report can be obtained by contacting the authors or at http://www.equicomgroup.com.

James Smith, M.Sc. (Eng.), is a Vice President and co-manages the Healthcare team at Equicom, providing strategic insight to biotechnology, healthcare services and pharmaceutical companies. He can be reached at 416.815-0700 ext 229 or jsmith@equicomgroup.com. Wayne Schnarr, Ph.D, MBA, is a Healthcare Consultant with more than thirty years of experience in the pharmaceutical and financial industries. He can be reached at 416.815.0700 ext 249 or wschnarr@equicomgroup.com. Equicom, a TMX Group company, is Canada’s leading provider of investor relations and strategic corporate communications services.

HOT BUTTON ISSUES

Canadian Life Science // By daniel Banks

MaJOr sCientiFiC HOT BUTTON ISSUES

FaCilities in Canada:

challenges and solutions

C

anada’s portfolio of large-scale facilities for science and technology (S&T) plays a central role in advancing the country’s ability to participate and compete in the international league in critical S&T areas spanning the natural, life and health sciences. These major scientific facilities are research infrastructure platforms for both ‘big science’ and ‘small science’: They are the base for long-term research programs in ‘big science’ areas, including high energy and particle physics (e.g. TRIUMF, Sudbury Neutrino Observatory), astronomy (e.g. Canada-France-Hawaii Telescope), environmental sciences (e.g. NEPTUNE Canada, CCGS Amundsen), and genomics and proteomics (e.g. Structural Genomics Consortium). They are also resources for individual researchers across Canada and the globe, enabling thousands of ‘small science’ experiments in many areas. For example, researchers use the Canadian Light Source and the Canadian Neutron Beam Centre to probe materials of all kinds, including biomaterials for improved pharmaceuticals and medical diagnostics.

Major scientific facilities support Canada’s innovation system, including biotech companies through research collaborations and other 21 BIOTECHNOLOGY FOCUS MARCH 2010

partnerships. A major example is MDS Nordion, a global leader in radiopharmaceuticals, which has had long-standing relationships with TRIUMF and Chalk River Laboratories in order to develop and market products which affect about 20 million medical procedures per year.

In this article, we explore challenges to Canada’s major scientific facilities and propose approaches based on global best-practices.

Canada has about $2.5 billion in capital investments in a portfolio of major scientific facilities, and that amount is growing. In the last 15 years, capital investments in major scientific facilities accelerated through the creation of the Canada Foundation for Innovation (CFI) and Genome Canada as funding agencies through which university and hospital-based research teams can compete to secure the substantial capital dollars required to build large-scale facilities.

A recent Nature editorial describes Canada’s policies for major scientific facilities as ad hoc and fragmented. Today, there is no single federal agency charged with an orderly management of this portfolio.

Nor is there a comprehensive plan within which the stakeholders can operate, although recent developments such as the 2007 federal S&T

HOT BUTTON ISSUES

Canadian Life Science

HOT BUTTON ISSUES

Interior of the world’s largest cyclotron, a particle accelerator facility located at TRIUMF that provides intense beams of protons for research in particle and nuclear physics, materials science, and nuclear medicine. In this photograph, one of the dozens of highly trained personnel that maintain and operate the facility kneels to make a measurement during maintenance. strategy, and the subsequent creation of the Science and Technology Innovation Council, may provide a context within which to implement a national plan to support the operation of major scientific facilities and to optimize their productivity for the advancement of science and the realization of the associated socio-economic, environmental and health benefits for Canada.

The funds for major scientific facilities flow through a wide range of organizations. To build a new facility or perform major upgrades to existing facilities, capital funds often have to be patched together from multiple additional sources including the CFI, National Research Council (NRC), international partners, provincial governments, the private sector, and even not-for-profit foundations. For example, proponents of the Canadian Light Source (CLS) obtained contributions from 18 different sources to build it.

However, decisions to allocate capital funds are often disconnected from commitments for the necessary operating funds. Thus, the funds for operating and maintaining them must be found separately. For example, the Tri-Council federal funding agencies (NSERC, CIHR, SSHRC) generally do not fund major capital costs, but do provide operational funds in some cases for small to medium-size centres. For example, the CLS has six funding sources for its operations and yet does not have sufficient funds to maximize the use of its infrastructure. A significant exception to this practice is TRIUMF, which operates under a Contribution Agreement with the Government of Canada through NRC Funding for operating and minor capital expenses are awarded on a five year cycle based on a mid-term international peer review of performance and the strength of the subsequent five year plan. This model has been advocated as a preferred approach by other major facility operators.

A predictable result of new facilities being built without commitments to operate them is a chronic lack of stable operating funds, which is manifested in various ways, such as short-term government grants to meet emergencies. For example, CFI recently granted the NEPTUNE Canada and VENUS ocean observatories a lifeline, an award of $24 million to operate for the next two years, during which significant effort will be expended to secure renewed funding. Such short-term funding commitments create financial instability that hinders proper planning, thereby compromising the pursuit of knowledge and technologies and reducing the return on Canada’s investment in these facilities.

22 BIOTECHNOLOGY FOCUS MARCH 2010

NEPTUNE Canada – the world’s first regional cabled ocean observatory.

Without clear rules and mechanisms to apply and compete for funds that can be renewed based on performance at reasonable intervals, scientists must lobby politicians directly for support. For example, in 2009, the federal government earmarked funding of $44 million over four years for the CLS to flow through NSERC, outside NSERC’s normal competitive processes that award funds based on scientific merit and societal impact.

Another symptom of the absence of central planning for Canada’s scientific facilities is evident in today’s medical isotope shortage. The global shortage has resulted from a maintenance shutdown of the 52year old National Research Universal (NRU) reactor in Chalk River. The need to replace this aging facility has been known for many years, and yet no decision has been made, partly because its missions in science and technology overlap with multiple agencies and no one agency can absorb the billion dollar investment required for a new facility within its normal mandate.

Canada is not alone in dealing with these issues. Every industrialized country has developed so-called “megascience” facilities, scientific platforms, or large-facility research projects ranging from telescopes to massive parallel-processing molecular biology laboratories to supercomputers and beam facilities. Several nations however, notably the U.K., Australia, Germany, and several U.S. programs, have broken new ground in the public-policy environment to develop procedures for dealing with major science initiatives. What distinguishes these programs is their holistic view of these facilities, recognizing the entire life cycle as well as the distinct stages (e.g., conceptualization, development, initiation, operations, and eventually termination and decommissioning). In fact, the most successful programs even develop road-mapping frameworks that compare, develop, compete, and set priorities for investments using carefully formulated and publicly available criteria.

For instance, in the United Kingdom, the Parliamentary Office of Science and Technology maintains a Large Facilities Strategic Roadmap in cooperation with all seven of its scientific research councils. As the science progresses, technologies evolve, mission needs are fulfilled, national priorities move, and the Large Facilities Roadmap is updated roughly every two years. This list then forms the basis of the shortlist of projects that become eligible for what is called Large Facility Capital Funding. Operations and management oversight of projects is provided by the Science and Technology Facilities Council (SFTC). Similarly in the U.S., the Department of Energy now prepares a Twenty-Year Facilities Outlook that examines potential new facilities for develop-

Canadian Life Science

Aerial view Chalk River Laboratories – Canada’s largest nuclear laboratory and home to the NRU reactor, the world’s largest producer of medical isotopes. The NRU reactor also supports nuclear R&D and provides neutron beams for advanced materials research at the NRC Canadian Neutron Beam Centre. ing, construction, and operation. The National Science Foundation has an explicit budgetary account called Major Research Equipment and Facilities Construction inside of which all major projects over a certain capital threshold are managed. Again, the key to these programs is their ability to formulate a national plan, which engages the scientific community, for selecting which facilities to move forward and a robust mechanism for budgeting and overseeing their operations. Treatment within a common portfolio grants decision-makers the levers necessary to encourage accountability and competitiveness among projects while maintaining predictability for future budgeting.

These approaches could be used to solve many of the problems facing Canada’s portfolio of major scientific facilities. For example,

HOT BUTTON ISSUES

priority-setting in Canada is often determined as scientific communities of interest gather around specific projects and lobby politicians directly for funding, rather than going through an orderly competitive process that is open and transparent. Thus, to propose a new facility, scientists have a “chicken and egg” problem. Politicians need to know exactly how much the facility is going to cost and what the approximate return on investment is going to be. One can do ballpark estimates easily, but obtaining accurate figures will require a rigorous engineering design and cost analysis, which may require a major investment to perform.

HOT A national road-mapping process can provide a mechanism to evaluBUTTON ate potential new facilities in the context of a national ISSUES framework to determine whether the proposed facility is feasible and whether it is the best use of funds against other possible facilities.

Furthermore, central funds for capital and operating costs of facilities guided by the planning process would allow Canada to properly support the entire lifecycle of a facility. Thus, before building any new facilities, Canada can ensure that these facilities will be able to compete for sufficient operational funds.

Canada can learn from these practices to increase the effectiveness of its major scientific facilities to mobilize S&T to Canada’s advantage: implementing a transparent scientific road-mapping process through consultation with all stakeholders and creating an orderly competitive process for obtaining capital and operating funds in the context of national planning for the entire lifecycle of Canada’s portfolio of major scientific facilities. These are not new issues and in fact have been the focus of attention of past reports and recommendations on the management of major science in Canada. Most recently, a committee of the Science, Technology and Innovation Council completed a review of the issues and has submitted a report to the Industry Minister. It is to be hoped that this will quickly lead to the creation of a coherent policy and program to ensure that existing facilities can compete for the operating funding required to achieve their full potential for Canada, and that proposals for new facilities can be considered within the framework of a national plan.

T U R N I N G I N N O V AT I O N I N T O E C O N O M I C G R O W T H Business, education and government in the Hamilton, Halton and Niagara regions combined forces to energize our existing biosciences strengths and help turn breakthroughs into business success.

Join us as we grow this regional initiative! Help transform the Golden Horseshoe into a knowledge-based, economic powerhouse of research, growth and investment.

Visit our web site at www.ghbn.org to find out more!

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w w w. g h b n . o r g MARCH 2010 BIOTECHNOLOGY FOCUS 23

HOT BUTTON ISSUES

Canadian Life Science // by Gail Garland President and CEO Ontario Bioscience Industry Organization (OBIO)

Ontario’s Bioscience Industry CEOs

HOT BUTTON ISSUES

speak out about issues affecting their ability to grow in 2010 and beyond In the summer of 2009, the CEOs of Ontario’s SME bioscience companies came together at the open invitation of Ontario Bioscience Industry Organization (OBIO) for a meeting hosted in Gowlings Toronto boardroom. On the agenda was a discussion of the future of Ontario’s bioscience industry and its unprecedented lack of access to capital, a worsening situation threatening the sustainability of the industry.

OBIO’s objective for the meeting was to facilitate the start of a dialogue with industry CEOs which would be ongoing, inclusive, transparent and democratic. The assembled CEOs responded to the need to develop a robust industry dialogue and an industry action plan. Out of this call to action, six dedicated CEOs (Table 1) volunteered to organize their regional colleagues into working groups for the purpose of developing ideas to stabilize and grow the bioscience industry in Ontario and identifying important government programs, which could be modified to enhance the sustainability of Ontario based biotech companies. Each group was responsible for producing a set of draft recommendations which would be presented by Working Group Leaders to OBIO.

Table 1:

Bioscience CEO Working Group Leaders

Michael Cloutier CEO, Critical Outcome Technologies Simon Goulet COO, PharmaGap and Stephen Fanjoy, President Therapeutic Monitoring Systems Dr. Paul Dick CEO, Chemaphor Inc. Dr. Joe Elliot CEO, Receptor Therapeutics Dr. Brent Norton CEO, PreMD Peter Pekos CEO, Dalton Pharma Services 24 BIOTECHNOLOGY FOCUS MARCH 2010

Equicom Inc., a Toronto based investor relations firm, worked with OBIO to summarize input from the working groups: to identify the priority programs, specific recommendations for improvement and possible future areas to review. Findings were then prioritized and voted on by CEOs across the province as part of an online consultation and vote held in October 2009.

Working within extremely tight timelines in order to present recommendations to the Government of Ontario by early November 2009, a team of volunteers and industry experts worked 24/7 to analyze the data and produce a report detailing: • key fiscal challenges faced by companies; • industry recommendations for changes to existing government programs, and • anticipated impact of increased eligibility on the ability of bioscience enterprises to operate.

The top seven fiscal issues facing Ontario’s bioscience companies, as identified by industry CEOs, are shown in Table 2. Not surprisingly, the two top issues facing Ontario bioscience companies are: raising external finance and maintaining working capital. Also not surprising, given the top two issues, is that ‘survival’ made it into the top seven.

Canadian Life Science

HOT BUTTON ISSUES

TABLE 3: SPECIFIC INDUSTRY GENERATED RECOMMENDATIONS

TABLE 2: TOP FISCAL ISSUES FACING BIOSCIENCE COMPANIES

1

1. raising external finance

51%

2. maintaining working capital

15%

3. Funding clinical trials

13%

4. survival

13%

5. maintaining workforce

3%

6. Funding patent development

3%

7. Funding research

3%

increase the 10 per cent refundable Ontario innovation tax credit (Oitc) to be more in line with Québec.

2 HOT establish a mechanism to monetize tax credits quickly, providing BUTTON short-term cash flow.

ISSUES

3 modify the eligibility requirements of the OetF to allow for smaller funding rounds.

4 Based on their Working Group dialogues and further development with OBIO online consultation, CEOs identified five specific recommendations which focus on changes to three existing government programs (Table 3), all of which target short-term relief for the Ontario bioscience industry and may, if necessary, be modified within the next fiscal year.

establish a fund similar to OetF for small public companies unable to raise capital.

5 change the eligibility requirements for BiP to: a. remove needs for current market activity b. expand the types of companies that may apply c. reduce the level of expenditure required

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HOT BUTTON ISSUES

Canadian Life Science

These five recommendations are largely cost neutral and apply to the following three existing provincial programs:

1

The Ontario Innovation Tax Credit (OITC): A 10 per cent

2

The Ontario Emerging Technology Fund (OETF): OETF is a direct investment fund managed by the Ontario Capital Growth Corporation (OCGC), an agency of the Ministry of Research and Innovation.

The $250 million fund, established in 2009 for a five-year term, grants a maximum of $50 million per year for co-investment alongside qualified investors into innovative, private Ontario companies. OCGC’s initial investment in an eligible company may not exceed $5 million and, over the life of the fund, the maximum allowable investment in the company is $25 million. Eligible companies must be actively operating in one of three sectors: • clean technology; • advanced health technologies, and • digital media, information and communication technology.

3

Biopharmaceutical Investment Program (BIP): BIP is a

refundable tax credit available to all public and private corporations for expenditures on scientific research and experimental development (SR&ED) carried out in Ontario. As of 2009, tax credits are administered

by Canada Revenue Agency. Eligible corporations must have a permanent establishment in Ontario and must qualify for the federal investHOT ment tax credit under section 127 of the Income Tax Act (Canada). OITC BUTTON offers a maximum claim of $300,000 per taxation year.

ISSUES

$150 million five-year discretionary, non-entitlement program run by the Ministry of Research and Innovation. The program funds up to 20 per cent of the eligible costs of projects worth $5 million or more. Qualified companies must be located in Ontario and have a primary source of business coming from patented products with marketing approval in Canada, U.S., U.K. or Japan. At least one patent must be for a human health drug product and must be approved for sale. Eligible projects must be related to incremental increase in the company’s R&D and/or advanced manufacturing of innovative drugs. Eligibility excludes projects for R&D and/or manufacturing related to medical devices, for human non-medical products, for business restructuring or for regular capital reinvestment.

Benefits of Recommended Changes:

Recommended Program Changes:

Table 4:

For each of the above-mentioned government programs, CEOs identified changes to existing eligibility criteria which, if made, would benefit their companies and have a direct economic benefit for Ontario.

They quantified and ranked the impact of program changes on their business using seven criteria: Gain Eligibility (qualify for the program); Extend Runway (ability to continue core operations); Add Jobs (create additional positions); Increase Investment (ability to attract capital investments); Increase Sales (increase in top line sales); Ontario Base (continue operations in Ontario), and R&D Spend (increase R&D expenditure). A summary of recommended program changes and their impact on bioscience companies is summarized in Table 4.

More than $120 million in the BIP program remained uncommitted at the end of 2009. Owing to lack of performance, the BIP program as currently structured will probably be closed. In that event, a window of opportunity would open for unspent monies remaining in the BIP program to be rapidly deployed in order to assist Ontario’s cash-starved SME bioscience companies.

While the money would come from the BIP program, deployment might logically be done using a framework already in place for existing programs. Such a framework might be, for example, a modified OETF or Investment Accelerator Fund (administered via Ontario Center of Excellence) for structuring and due diligence, but with eligibility criteria tailored to meet the needs of the bioscience industry.

Since publication of OBIO’s report in early November 2009 (available at: www.obio.ca), numerous discussions have taken place with senior government officials, elected representatives and stakeholders who understand and value the contribution a strong bioscience industry can make to Ontario’s economy.

Ontario CEOs have begun meeting with their MPPs, engaging them in discussion about the role of the bioscience industry as a vital engine of Ontario’s future knowledge economy. It is a good story. Let’s hope Ontario’s bioscience industry survives to tell it.

Recommended Program Changes:

1. OITC:

2. OETF:

3. BIP:

a. Increase OITC from 10 per cent to 37.5 per cent

a. Lower the $1 million minimum investment threshold

a. Eliminate marketed human therapeutic requirement

b. Increase frequency of OITC payment to quarterly

b. Create OETF fund for public companies

b. Lower the $5 million minimum contribution

c. Expand eligible expenditure criteria

c. Make small public companies eligible

c. Expand eligibility to include medical devices and diagnostics.

• Increase the number of companies eligible for OETF investment

• Provide access to many bioscience companies currently not eligible

• Provide Ontario companies with the same advantages as Québec companies • Improve company cash flow

26 BIOTECHNOLOGY FOCUS MARCH 2010

• Increase company’s ability to attract capital investments • Cash would be used to advance R&D to get closer to commercialization

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The MB3600-PH is a benchtop analyzer that can be fitted with a variety of accessories for accurate measurements on a broad range of applications, such as: laboratory QA/QC analysis, raw material identification and qualification, research and development, NIR method development, and at-line Process Analytical Technologies measurements.

The MB3600-PH’s universal sampling compartment adds to the machine’s versatility. It can also accommodates a wide range of accessories to address any additional needs.

“We have always provided our customers with FT-IR instruments that are robust and exceptionally accurate,” said Frédéric Despagne, Life Science Industry Manager at ABB. “The MB3600-PH continues this heritage, offering ease of use, precision, in a package that requires minimal maintenance that will withstand the demands of harsh industrial environment. While the exceptional stability of the wishbone principle with corner cube mirrors ensures reproducible data, the interferometer design has been further refined with the introduction of an innovative doublepivot concept derived from our aerospace technology, offering outstanding robustness. As a result, the permanently aligned optics does not require alignment and the interferometer has a lifetime warranty.”

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CALENDAR March 2010 February 28-March 5 Pittcon 2010- Pittsburgh Conference on Analytical Chemistry and Applied Spectroscopy Venue: Orlando, FL Tel: (412) 825-3220 Email: info@pittcon.org Web: www.pittcon.org

March 8-10 Bio-Europe Spring 2010 Venue: Barcelona, Spain Email: tvoigt@ebdgroup.com Web: http://www.ebdgroup.com/bes/

March 8-12 4th Annual Growing the Margins: Green Energy and Economy for the Farm and Food Sectors Venue: London, ON Tel: (416) 426-7029 Fax: (416) 426-7280 Email: info@gtmconference.ca Web: http://www.gtmconference.ca/

March 9-12 14th International Congress on Infectious Diseases Venue: Brookline, MA Tel: (617) 277-0551 Fax: (617) 278-9113 Email: info@isid.org Web: http://www.isid.org

March 16-17 6th Annual Pharma/Biotech Accounting and Reporting Congress Venue: Philadelphia, PA Email: tekoch@deloitte.com Web: www.nxtbook.com/ nxtbooks/advanstar/cbi_ accountingreporting2010/#/0

March 22-23 The Burrill Consumer Digital Health Meeting Venue: San Francisco, CA Phone: (415) 591-5400 Web: http://www.burrillandco.com/ digital_health/index.html

March 22-24 NZBIO 2010 Conference: Advancing a Bio-Based Economy Venue: Auckland, New Zealand Contact: Kirsty Jehle / Conference

28 BIOTECHNOLOGY FOCUS MARCH 2010

Project Coordinator Tel: +64 4 916 1247 Email: kirsty.jehle@nzbio.org.nz Web: http://www.nzbio2010.co.nz/home

Company & Advertiser Index COMPANY

Page

RC

March 23-26

ABB......................................................... 27........................ 4694

Analytica 2010 Venue: Munich, Germany Tel: (416) 237-9939 Email: bmertens@ canada-unlimited.com Web: http://www.analytica.de/ en/Home

AEterna Zentaris..................................... 16.................................

March 23-26 Late Phase Drug Development World Americas 2010 Venue: Princeton, NJ Tel: 212-379-6322 Email: enquiry.us@terrapinn.com Web: http://www. healthnetworkcommunications. com/2010/lpddusa/index.stm

BioFinance................................................... 25............................4693 BioTalent Canada......................................19,30.......................... 4691 Brady..............................................................17............................4690 BTXpress................................................. 27........................ 4696 Canadawide Scientific............................. 27........................ 4695 Chemaphor Inc........................................ 9..................................

Children’t Miracle Network...................... 7......................... 4700 Cytopia Limited....................................... 8..................................

Dalton Pharma Services.......................... 24.................................

Eppendorf.................................................... 32............................4699 Equicom................................................. 20.................................

Fisher Scientific............................................ 2.............................4686

March 24

GSK................................................................. 5.............................4687

National Pharmaceutical Congress Venue: Toronto, ON Tel: (416) 916-2476 Email: info@pharmacongress.info Web: http://www.pharmacongress. info/1.html

Genome Atlantic...................................... 7..................................

March 22-25

Network........................................................ 23............................4692

American Filtration and Separations Society 23rd Annual Technical Conference & Exhibition Venue: San Antonio, TX Phone: (612) 861-1277 Web: http://www.afssociety.org/ spring2010/

Genome B.C............................................. 7..................................

Genome Canada...................................... 7..................................

Genome Prairie........................................ 7..................................

Golden Horseshoe Biosciences..........................................................

Lawson Health Research Institute...........15............................4689 LFB Biomedicaments............................... 8..................................

Lumira Capital......................................... 15.................................

NanoString Technologies......................... 6..................................

Natural Sciences and Engineering................................................

Research Council of Canada.................... 8..................................

March 31

Novartis Pharmaceuticals Canada Inc...... 9..................................

North Ontario BioEnergy Trade Show Venue: Thunder Bay, ON Phone: (705) 472-2280 E-mail: info@canbio.ca Web: www.canbio.ca

Novozymes.............................................. 8..................................

April 2010

OBIO........................................................ 24.................................

Ontario Genomics Institute...................... 6..................................

Ontario Institute for Cancer Research....13............................4688 POI..................................................................31............................4698 ProMetic Life Sciences Inc........................ 8..................................

April 5-9

Roche...................................................... 17.................................

2010 Materials Research Society Spring Meeting Venue: San Francisco, CA Tel: 724-779-3003 Fax: 724-779-8313 Email: info@mrs.org Web: http://www.mrs.org/s_mrs/ index.asp

Sanofi-Aventis......................................... 16.................................

StemCell Therapeutics Corp.................... 6..................................

Therapure Biopharma Inc........................ 8..................................

Univeristy Health Network....................... 6..................................

University of Calgary................................ 6..................................

YM BioSciences Inc................................. 6, 8................................

THE LAST WORD

Bridging the skills gap Ensuring Canada has the talent it needs for a thriving bio-economy

B

Colette Rivet, Executive Director, BioTalent Canada

iotechnology has a potential role to play in addressing many of the challenges and opportunities that lie ahead for Canada this century— including the fight against infectious diseases and the enhancement of manufacturing processes described elsewhere in this issue of Biotechnology Focus.

To contribute to these and other areas, biotechnology companies are going to need access to an abundant pool of skilled professionals. Yet today the bio-economy is facing a skills shortage. By improving the country’s capacity to integrate internationally educated professionals (IEPs) into the bio-workforce and facilitating skills transfers from other sectors of the economy, this shortage can be overcome and the full potential of biotechnology realized.

Meeting Canada’s innovation needs Biotechnology’s applications extend throughout the economy. Eco-efficient bio-processes stand to improve the sustainability of Canadian industries, reducing operating costs and improving environmental performance. Renewable bio-feedstocks offer long-term alternatives to today’s energy sources. Biotechnology can help diagnose and treat infectious diseases accurately and effectively. Using robotics and other advanced technologies and processes, scientists can conduct millions of biochemical, genetic and pharmacological tests more quickly and accurately than ever before, yielding data for bioinformaticians to translate into meaningful, actionable insights.

With its history of research excellence and abundance of natural resources, Canada is well-equipped for leadership in the global bio-economy. But it can only lead if it has the people in place to fuel growth in the sector.

Are you working in the bio-economy?

If you are interested in participating in BioTalent Canada’s Skills Profile focus groups or in being a member of the BioSkills Recognition Program Competency Committee, let us know: profiles@ biotalent.ca.

A multi-pronged solution to the skills shortage According to BioTalent Canada’s labour market study, Splicing the Data: The Critical Role of Human Resources in Canada’s Bio-Economy, more than 35 per cent of biotechnology employers face recruitment and retention challenges and 34 per cent are dealing with skills shortages today. More than half of all biotechnology companies surveyed said the greatest recruitment challenge they face is a lack of candidates with the right experience or skills.

To maintain its position of strength in the global bioeconomy, Canada must address the issue of skills shortages on multiple fronts. In addition to nurturing domestic

30 BIOTECHNOLOGY FOCUS MARCH 2010

By Colette Rivet talent and ensuring that academic institutions produce job-ready biotechnology professionals, Canada has to facilitate the entry of IEPs into the country’s biotechnology workforce and encourage the transfer of skilled workers from other sectors into the bio-economy.

Integrating IEPs, transferring skills The Government of Canada has acknowledged the need for international talent to support the growth of many sectors of Canada’s economy. Through the Pan-Canadian Framework for the Assessment and Recognition of Foreign Qualifications and other measures, the federal government is seeking to accelerate the process of recognizing the credentials of internationally educated workers.

IEPs have opportunities to enter the bio-economy workforce and start on new career paths, or they can work in the biotechnology sector while they are waiting to have their credentials recognized—perhaps not exactly in the roles they’ve held previously but in positions that utilize their established skills. BioTalent Canada’s BioSkills Recognition Program is an industry-led initiative that identifies IEPs and other job seekers as BioReadyTM and connects them with potential employers.

The BioReady status applies not only to IEPs but also to Canadian workers in traditional industries. For individuals in manufacturing, agriculture, forestry, the automotive and other evolving sectors from which legacy jobs are disappearing, the bio-economy offers brandnew, longer-term career prospects.

Committed to facilitating these skills transfers, BioTalent Canada—in partnership with industry—plans to develop a model for transitioning displaced workers from traditional manufacturing sectors into biomanufacturing career areas such as bioenergy and pharmaceuticals.

BioTalent Canada will identify transferable skills and create skills development resources.

Profiling the needs of Canada’s bio-economy To help employers, job seekers and educators understand the kinds of skills and experience needed for particular occupations, BioTalent Canada continues to build its set of biotechnology skills profiles. Six new profiles are under development—Animal Care Manager, Contract Manufacturing Project Manager, Quality Assurance Manager, Biofuels Plant Manager, Bioinformatician and Clinical Research Data Manager. The next focus will be identifying transferable skills for medical specialists, which will lead to the creation of future bio-economy skills profiles.

BioTalent Canada works with industry partners to validate its skills-related resources, ensuring that they accurately reflect industry requirements and serve as valuable tools for the expansion of Canada’s bio-economy.

This spring, BioTalent Canada is holding industry focus groups to validate its latest set of skills profiles.

@

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Whether your applications require spinning many tubes at a time or centrifugation of larger volumes at high-speed, these multipurpose centrifuges with their variety of rotors and adapters cover virtually any application in tubes, flasks and microplates.

Choose the right model for your application: � Compact multipurpose models 5804/5804 R— ideal for applications in deepwell plates or for high-speed centrifugation of volumes up to 100 ml. � Versatile models 5810/5810 R—in addition to high-speed centrifugation of larger volumes these workhorses also accommodate large swing-bucket rotors to fulfill all high-capacity needs in tubes and plates.

Product Features and Benefits ��Large rotor selection and speed up to 20,800 x g (14,000 rpm) for a wide range of applications � Quiet operation to benefit your work environment � Low profile for ergonomic loading and unloading of rotors � Soft-touch lid closure for ergonomic lid locking � Maximum placement flexibility due to 120 V power supply � Saves up to 35 user-defined programs Refrigerated versions 5804 R and 5810 R also feature: � Environmentally friendly CFC-free refrigerant � FastTemp function for fast and accurate pre-cooling � Standby cooling keeps set temperature when lid is closed � ECO shut-off engages after 8 hours of nonuse to reduce energy consumption and extend compressor life � Built-in condensation drain to eliminate water accumulation � Patented, dynamic compressor control (DCC) for extended compressor life and energy savings

www.eppendorf.com Þ Email: info@eppendorf.com Þ Application hotline: 516-515-2258 In the U.S.: Eppendorf North America, Inc. 800-645-3050 Þ In Canada: Eppendorf Canada Ltd. 800-263-8715

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