7 minute read
ReadeRs Respond
Survey SayS:
Funding gap widenS aS bioteCh remainS negleCted in Canada
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With this, our fourth Hot Button Issue, Biotechnology Focus once again polled its readHOT BUTTON ers from both industry and academia to list their personal top three priorities they’d ISSUES like 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.”
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 find granting and financing opportunities? (Research Organization response)
91%
9%
Yes 9% No 91%
94%
5%
Easier to come by: 1% The same: 5% Harder to come by: 94%
1%
Do you feel the worst of the economic downturn is over? (C-Level Executives)
Do you feel that the Canadian Biotechnology and Life Science sector is doing an adequate job of recruiting and retaining talent? (C-Level executives)
95%
5%
Yes: 5% No: 95%
80%
20%
Yes: 20% No: 80%
80%
20%
Yes: 20% No: 80%
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 BUTTON ment where the opinions and input of scientists is generally overlooked and thus not 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.”
