Biotechnology Focus October 2012

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Québec:

OCTOBER2005 2012 NOVEMBER

VOLUME 15, NUMBER 9 VOLUME 8, NUMBER 11

A common vision and plan of action to make itself a world leader in the life sciences.

Québec edition

INSIDE:

Publication Publication Mail Mail Registration Registration Number: Number: 40052410 40052410

LIFE SCIENCES AND HEALTHCARE VENTURE CAPITAL: RECENT DEVELOPMENTS IN QUÉBEC

At Merck, we work hard to keep the world well. How? By providing people all around the globe with innovative prescription medicines, vaccines, and consumer care and animal health products. We also provide leading healthcare solutions that make a difference. And we do it by listening to patients, physicians and our other partners — and anticipating their needs.

Not just healthcare.

We believe our responsibility includes making sure that our products reach people who need them, regardless of where they live or their ability to pay. So we’ve created many far-reaching programs and partnerships to accomplish this.

You can learn more about them at merck.ca.

We continue on our journey to redefine ourselves to bring more hope to more people around the world. Our goals are clear and commitment is fierce. We are dedicated to solving problems and pursuing new answers.

www.merck.ca Copyright ©2012 Merck Sharp & Dohme Corp., a wholly owned subsidiary of Merck & Co., Inc., Whitehouse Station, NJ, USA. All rights reserved.

contents

October 2012 – VOLUME 15 – NUMBER 9

FEATURES 10

ife Sciences and Healthcare L Venture Capital

23

A look at recent developments in Québec and

been able to extract the best from Quebec’s R&D ecosystem blazing new trails towards innovation, enhancing research and creating value

what they mean for the industry going forward

By Cédric Bisson

12

The Changing Face of R&D in Québec Dealing with market challenges and the rising

16

Compiled By Daniela Fisher

25

Biomarker Patents: Where do we stand now?

cost for drug discovery, big pharma is changing the way they do business

The scope of biomarker patents continues to be a

By Daniela Fisher

By Carmela DeLuca

Innovation Incubator

troubling question for the diagnostics industry

27

Alberta prepares to host CSPC 2012

The Québec Biotechnology Innovation Centre

The fourth Canadian Science Policy Conference

(CQIB), growing strong businesses and helping start-ups for 17 years

is coming soon to Western Canada and will shine the spotlight on its influences on driving economic growth and innovation in Canada

By Daniela Fisher

20

The CQDM: A homegrown success story During its four years of activity, the CQDM has

Diagnostic Advantage ith three successful diagnostic tests already W thriving in the market, Québec City’s DiagnoCure has become a driving force in diagnostics

By Janet Damianopoulos

www.bioscienceworld.ca

By Mehrdad Hariri and Anton Neschadim

30

The Last Word BioTalent Canada Executive Director Rob Henderson discusses the value of building partnerships to fulfill bio-economic needs

By Rob Henderson

October 2012 BIOTECHNOLOGY FOCUS 3

PUBLISHER’S NOTE PUBLISHER/ EDITOR-IN-CHIEF

Terri Pavelic Shawn Lawrence Daniela Fisher CONTRIBUTING WRITERS Anton Neschadim Carmela DeLuca Cédric Bisson Janet Damianopoulos Mehrdad Hariri Rob Henderson National Account Marcello Sukhdeo STAFF WRITERS

A new chapter

in Québec’s biotech sector Welcome to our fourth annual Québec edition of Biotechnology Focus. As is our custom, this October we’re taking a look at the financing, research, innovation and collaborations being carried out in Québec’s biotech industry.

One such collaborative venture we’ll soon be seeing in Québec is the opening of a chapter of Women in Bio (WIB) in the Montréal region.

Women in Bio is a U.S.-based organization, with international chapters, that was established in 2002 to help women entrepreneurs and executives in the BaltimoreWashington-Northern Virginia to build bioscience-related businesses. WIB has chapters across the U.S., as well as in India, and is now extending its network into Canada.

The organization’s mission is to support leadership development and entrepreneurship of women in the life sciences, through networking events, workshops and seminars. The WIB-Greater Montréal Chapter will aim to bring together professionals from across Québec, with biotech-related interests in diverse sectors. Business professionals, entrepreneurs and scientists from the private sector, government institutions, and academia, as well as students, are invited to join and can benefit from WIB’s resources which include networking, sharing insights and innovations, mentorship, and learning about the latest developments and opportunities within the pharma, biotech, and medical devices industries.

“The organization is focused on the development of women entrepreneurs in the life sciences,” says Carmela DeLuca, co-chair of the WIB-Greater Montréal Region Chapter. “On their professional development, providing leadership opportunities, and promoting careers of women in the life sciences.”

DeLuca, along with co-chair Marilyn Krelenbaum and a group of women from diverse life science industries and academia, are organizing the Montreal chapter’s kick-off event, to be held November 14, featuring a speech from serial entrepreneur Clarissa DesJardins.

Their chapter will offer a variety of local events, webinars, and workshops for networking and mentoring opportunities, as well as helping members develop the skills needed to advance to positions of leadership.

Montréal was chosen for a chapter location as it is recognized as a biotech hub, with a strong life sciences cluster. The Greater Montréal Region offers government support programmes as well as other support organizations for the life sciences industry, and an established business and research infrastructure which provides access to capital, contract research and contract manufacturing organizations.

For more information, go to: http://womeninbio.org/chapter-montreal.shtml

Manager

Elena Pankova John R. Jones MARKETING MANAGER Mary Malofy CIRCULATION DIRECTOR James Watson

circulation@promotive.net Tel: 705-812-0611 GRAPHIC DESIGNER CONTROLLER

EDITORIAL ADVISORY BOARD Celine Bak, Analytica Advisors; Rob Henderson, BioTalent Canada; Najla Guthrie, KGK Synergize; Pierre Bourassa, IRAP, Montréal; Brad Guthrie, Alberta Advanced Education and Technology; Carol Reynolds, Wordmark Consulting Group Inc.; 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, Cognovie Inc.; Randal R.Goodfellow, P.Ag., Senior Vice President, Corporate Relations, Ensyn; Bob H. Sotiriadis, LLB, a partner with Leger Robic Richard; Dale Patterson, Genome Canada; Darcy Pawlik, Syngenta Seeds Canada Inc; Gail Garland, OBIO; Barry Gee, CDRD; Bonnie Kuehl, Scientific Insights Consulting Group Inc. Biotechnology Focus is published 10 times per year by Promotive Communications Inc. 24-4 Vata Court, Aurora, Ontario L4G 4B6 Phone 905-727-3875 Fax 905-727-4428 www.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 National Library of Canada ISSN 1486-3138 \ All opinions expressed herein are those of the contributors and do not necessarily reflect the views of the publisher or any person or organization associated with the magazine.

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

4 BIOTECHNOLOGY FOCUS October 2012

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R & D NEWS Heart and Stroke Foundation & Desjardins Financial Security launch free mobile app The Heart and Stroke Foundation, in partnership with Desjardins Financial Security, have launched a free mobile app, designed to help Canadians make important lifestyle changes that could add healthy years to their lives.

The Foundation’s <30 Days Mobile App gives users a customized risk profile showing the long-term impact of their daily health choices, then guides them to break bad habits and adopt a healthier lifestyle in 30 days or less.

“We want to help Canadians take their heart health seriously,” says David Sculthorpe, CEO of the Heart and Stroke Foundation. “Heart disease and stroke are a leading cause of death. We know that nine out of 10 adults have at least one risk factor for heart disease and stroke. Our new app gives Canadians the power to take control of their health and lower their risks.”

Forty per cent of Canadians have three or more risk factors for heart disease and stroke. But there is good news - 80 per cent of premature heart disease and stroke is preventable. The <30 Days app was designed and developed by leading Canadian experts to empower Canadians with the information and support they need to reduce

their risk of heart disease and stroke.

Key features, such as tracking of progress, reminders, positive reinforcement and social support are included to ensure that the user is able to sustain the recommended healthy behaviours. Overcoming unhealthy habits and reducing risk factors can be overwhelming; the Foundation’s <30 Days app helps users achieve a healthy heart by suggesting simple and practical daily challenges. After only 30 days, individuals will be more aware of how their actions impact their heart’s wellbeing.

“Diet, physical activity, maintaining a healthy weight, being smoke-free and reducing stress are just a few of the keys in taking control,” says Dr. Beth Abramson, cardiologist and spokesperson for the Foundation. “This app is a virtual trainer, nutritionist and cheerleader wrapped up together. It gives you one healthy action a day. This quickly adds up to 30 healthy actions - putting you on the path to a lifetime of healthy choices.”

Every day the app delivers a focused, easy-to-do challenge that channels the user’s motivators. Users are rewarded with electronic “badges” when they reach new milestones. Digital badges can be used for

Health Canada approves new tablets for schizophrenia Sunovion Pharmaceuticals Canada Inc. announces the launch of its LATUDA™ (lurasidone HCl) tablets, for treating patients with schizophrenia.

To be taken once daily, the tablets are atypical antipsychotic agents for acute treatment of adult patients with schizophrenia. LATUDA is available for prescription in pharmacies throughout Canada, and was approved by Health Canada June 13, 2012. Tablets are available in 40 mg, 80 mg and 120 mg tablets. LATUDA has been evaluated in 48 clinical studies involving over 2,900 lurasidone-treated subjects.

“Schizophrenia is a devastating disease for those who suffer from it, and deeply affects their families as well,” said Dr. Ruth Baruch, medical director of community programs, department of psychiatry, Toronto East General Hospital. “The availability of LATUDA will

6 BIOTECHNOLOGY FOCUS October 2012

provide physicians with an important new treatment option to help manage the illness and assist in improving the quality of life for individuals with schizophrenia.”

The efficacy of LATUDA was established in five, six-week placebo-controlled studies of adult patients with schizophrenia. In these studies, LATUDA demonstrated significantly greater improvement versus placebo on primary efficacy measures [change from baseline in Positive and Negative Syndrome Scale (PANSS) total score and Brief Psychiatric Scale-derived from PANNS (BPRSd)] at study endpoint. The most common adverse events in patients treated with LATUDA were nausea, somnolence, akathisia and parkinsonism.

“LATUDA is an important product for our company and we are excited to offer this new treatment option to physicians caring for adult patients with schizophrenia,” said Douglas Reynolds, president, Sunovion Pharmaceuticals Canada Inc.

online bragging rights on social networking sites like Facebook and Twitter.

“We’re proud to support a tool that has the potential to have a huge impact on the health and lives of Canadians,” says Denis Berthiaume, president and COO of Desjardins Financial Security.

The app helps users keep inventory of their health and risk factors by completing a mini-assessment. They then prioritize the risk factors that are most important to them and highlight what motivates them most.

The free app is currently available in English or French for iOS devices only (iPhone, iPad and iTouch) and can be downloaded at Apple App Stores or heartandstroke.ca/ YourRisk.

New Melanoma treatment approved in Ontario and Saskatchewan The Melanoma Network of Canada is encouraged by the announcement that Ontario and Saskatchewan have agreed to provide access to Yervoy, a new treatment for metastatic melanoma, the most deadly form of skin cancer and is hopeful that other provinces will also make this new treatment available to patients as soon as possible.

“This is an excellent first step forward in ensuring that Canadians diagnosed with metastatic melanoma have access to the new therapies that could extend their lives,” said Annette Cyr, chair of the Melanoma Network of Canada. “We thank and congratulate the governments of Ontario and Saskatchewan and hope the other provinces will follow without delay. All patients in Canada deserve the same access to this critical treatment.”

R & D NEWS Transplant Québec supports launch of Facebook® Organ Donation/Don d’organes initiative Transplant Québec supports the launch of the Facebook® Organ Donation/ Don d’organes in Québec and Canada. The initiative was first put forth earlier this year in the U.S., Europe and Asia.

The social network will help mobilize citizens, to raise public awareness of the fact that many patients are waiting on the list for a transplant.

“Facebook is about connecting and sharing. We believe that by simply telling people that you’re an organ donor, the power of sharing and connection can play an im-

portant role in solving the organ crisis in Canada,” says Jordan Banks, managing director of Facebook Canada.

In Québec, the number of patients waiting for a transplant stands at 1,200. This tool will highlight the community’s ability to make a difference by enabling people to show their intent to become an organ donor on their Facebook timeline.

According to Louis Beaulieu, director general of Transplant Québec, “Transplant Québec is convinced that the availability of this Facebook tool will be a major boost to

promotional and educational activities, all with the goal of helping people to become posthumous donors. The Facebook tool will make it easier for people to make known their decision concerning organ donation by posting their consent or intention to consent to donate on their Facebook timelines. By enabling people to do so, we believe people will gain the true satisfaction that comes from making a gesture of human solidarity with people waiting for a transplant, while at the same time ensuring that families and friends are more aware of this option.”

Indel Therapeutics to partner with Genome BC on genomics research project Indel Therapeutics Inc., and Genome BC are partnering on a new genomics-based research project entitled, “Combating drug-resistant pathogens.” The project is focused on identifying new inhibitors for drug targets that will lead to the creation of novel classes of antimicrobials against Gram negative bacteria and biodefense agents.

As part of the project, Genome BC awarded funding to Dr. Neil Reiner of the University of British Columbia, the company’s scientific founder and chief scientific officer, and Fiona Brinkman of Simon Fraser University, through its peer-reviewed proof-of-concept program. Drs. Reiner and Brinkman, along with industry partner Indel Therapeutics, will work to identify novel drug targets and therapeutics for antibiotic-resistant nosocomial pathogens (hospital-acquired infections) that address the ongoing issue of multidrug-resistant (MDR) bacterial pathogens.

The Proof-of-Concept program provides funding to help researchers move their work forward from the lab to the market.

It fosters the development of novel products and services to the point that they are ready for industry partners like Indel Therapeutics.

“The Proof-of-Concept program provides a valuable opportunity for receptor engagement, in particular industry. This program compels the research community to work hand in hand with end users,” says Dr. Alan Winter, president and CEO of Genome BC. “Genome BC is committed to fulfilling our mandate of facilitating the advancement of genomics based discoveries from innovation through to practical applications.”

At Pfizer, we believe to be truly healthy, it takes more than medication.

Visit morethanmedication.ca – a website devoted to the everyday pursuit of health and wellness.

morethanmedication.ca

October 2012 BIOTECHNOLOGY FOCUS 7

R & D NEWS Health Canada approves Eli Lilly Canada’s BYETTA® Eli Lilly Canada announces Health Canada has approved BYETTA®, an injection added on to insulin glargine, with or without metformin for improving glycemic control in adult patients with type 2 diabetes mellitus, when insulin glargine (with or without metformin) along with diet and exercise doesn’t provide enough glycemic control. Insulin glargine is a type of long-acting insulin analogue used to produce a steady level of insulin between meals and overnight.

“Type 2 diabetes is a complicated condition that requires regular monitoring and individualized treatment,” said Dr. Bernard Zinman, director of the Leadership Sinai Centre for Diabetes, professor of medicine, University of

Toronto and Mount Sinai Hospital. “In addition to a healthy lifestyle which includes a balanced diet and exercise, recent studies have shown that GLP-1 receptor agonists when used with insulin appears to be a particularly effective treatment combination and Canadians with type 2 diabetes can use this strategy to better manage their condition.”

Adding BYETTA in a fixed dose, twice daily before meals, can help improve control of patients’ blood sugars overall as well as after meals. In a clinical study, patients on BYETTA with insulin glargine (alone or in combination with metformin), achieved better glycemic control, without increased hypoglycemia or weight gain.

Valeant Pharmaceuticals appoints new board member Valeant Pharmaceutical International Inc. has appointed Howard Schiller, Valeant’s chief financial officer, to its Board of Directors.

Schiller joined Valeant in December 2011 as executive vice president and chief financial officer after retiring from Goldman Sachs after a 24year career. Schiller was the chief operating officer for the Investment Banking Division responsible for the management and strategy of the business.

BELLUS Health Announces Partnership for the Development of BLU8499 BELLUS Health Inc. announces a partnership with Asclepios Bioresearch Limited for the clinical development of BLU8499, BELLUS Health’s drug candidate for the treatment of Alzheimer’s disease.

Under the terms of the agreement, Asclepios will fund all Phase 2a enabling activities immediately and has committed to a second tranche of additional capital for the conduct of a Phase 2a clinical trial in mild Alzheimer’s disease patients. The total investment and commitment by Asclepios towards the development of BLU8499 is at least US $4 million.

“We are very happy to be working with Asclepios Bioresearch to pursue the development of BLU8499 into a proof of concept

study,” said Roberto Bellini, president and CEO of BELLUS Health. “This collaboration allows us to use non-dilutive capital while retaining significant upside for our shareholders.”

“Alzheimer’s is a devastating disease that affects both patients and their families,” said Simon Conder, director of Asclepios. “We are excited to partner with the team at BELLUS Health to advance BLU8499 into a Phase IIa study and hope that this compound will make a difference in the lives of those affected by this condition.”

The Phase 2a study is expected to be initiated in the second half of 2013. The trial will focus exclusively on Alzheimer’s dis-

ease patients with an apoE4 positive genotype, which is the subgroup where the greatest level of treatment effect was seen in a previous Phase 3 study conducted with tramiprosate, the parent compound of BLU8499.

BELLUS Health will form a joint steering committee with Asclepios to oversee the program’s development efforts. Under the terms of the agreement, BELLUS Health will earn study management fees equal to 15 per cent of the capital invested by Asclepios over the life of the partnership.

According to the agreement, it is expected that the two parties will share the overall proceeds from the future monetization of BLU8499 approximately equally.

Laval hospital installs first bioresorbable vascular scaffold on a special-access basis The hemodynamics team at the Hôpital de la Cité-de-la-Santé of the Centre de santé et de services sociaux de Laval (CSSS Laval), has carried out a Canadian first in cardiac surgery.

The team has implanted the first bioresorbable coronary drug-eluting vascular scaffold in Canada, on a special-access basis that was authorized by Health Canada. According to Dr. Samer Mansour, the hemodynamics cardiologist from the CSSS Laval who performed the procedure, this device is a revolutionary tool that will meet a number of expectations in the treatment of coronary artery disease, which is known to cause infarctions.

The Absorb™ bioresorbable vascular scaffold (BVS), manufactured by the multinational healthcare company Abbott, is an implantable device that opens up a blocked vessel and restores blood flow to the heart in the same way that conventional metallic stents do. But unlike metallic stents, Absorb dissolves over time. This new device is made of polylactide,

8 BIOTECHNOLOGY FOCUS OCTOBER 2012

a material commonly used in medical implants, and naturally breaks down in the body into carbon dioxide and water. This scaffold is designed to support the vessel until the device dissolves, leaving the patient with a treated vessel free of a permanent implant.

“Unlike with metal stents, there will be better healing of the artery without leaving behind any material for the rest of the patient’s life,” says Dr. Mansour, professor from Université de Montréal’s Faculty of Medicine. The patient, Maurice Adourmad, was discharged the day following his surgery and then had a brief, 48-hour convalescence. For the team, this first was met with great pride and much enthusiasm.

Through the Special Access Program, Health Canada recently approved the use of the Absorb bioresorbable vascular scaffold for Dr. Mansour to treat a patient for the first time in Canada outside of the clinical trials. Absorb™ received approval from the European Community - CE Mark - in January 2011.

Québec A Spotlight on Québec’s Bioscience Sector 10 Life Sciences and Healthcare Venture Capital: Recent developments in Québec 12 The changing face of R&D in Québec: The Biopharma perspective 16 The CQIB and its role in incubating innovation in Québec 20 Company Spotlight: DiagnoCure 23 The Québec Consortium for Drug Discovery: A national success story

OCTOBER 2012 BIOTECHNOLOGY FOCUS 9

Spotlight on Québec

québec

By Cédric Bisson, venture partner,Teralys Capital

Life sciences and healthcare venture capital: recent developments in Québec venture capital, it is critical to identify the root causes of lower historical returns and to modulate new funds so that these causes are not repeated with future funds.

In the life sciences and healthcare sector, Teralys Capital has identified three key characteristics for successful fund performance: 1. Experienced management team with international mindset and reach. Fund managers should have a mix of operational, business development, scientific and financial expertise in order to better select, help and grow their portfolio companies. Since buyers and partners are global, they should possess international networks and be able to benchmark what happens locally to best-in-class assets worldwide; 2. Relationships with big pharmaceutical / big medical device companies. The vast majority of life sciences opportunities cannot be developed or be exited without these strategic partners. In order to increase the probability of financial returns, fund managers could potentially convince such strategic partners to invest in their fund or co-invest in their portfolio companies;

R

ecent announcements this spring: “Teralys Capital and Eli Lilly and Company invest in a new $150 million fund dedicated to the life sciences sector with TVM Capital”, “Two new Lumira Capital life sciences funds: $150 Million to support Québec’s biotechs throughout their stages of development”, highlighted renewed momentum for life sciences in Québec. Coupled with the latest Canadian statistics on financings by sector and by province, this news definitely illustrates a vibrant life sciences sector in Québec.

It is however opportune to remind oneself that these achievements occurred against a global backdrop of cash constraints on venture financing across all sectors, due to global macroeconomic factors (e.g., flight for liquid assets, lower tolerance for risk and volatility) and venture capital’s own weaker performance compared with other alternative assets (e.g., mezzanine debt, some infrastructure and resource investments).

Needless to say, venture capital remains critical in terms of economic diversification, creation and growth of new SMEs (which then create new jobs) and fostering entrepreneurship, as recently outlined in the Jenkins report (http://rd-review.ca/eic/site/033.nsf/eng/00288.html).

Therefore, as an industry, while it is important to reaffirm support for

10 BIOTECHNOLOGY FOCUS OCTOBER 2012

3. Right-sized fund. Even the most capital-efficient life sciences companies typically require multi-million financing rounds, which means that any fund manager should have the financial means to maintain its position over time, and the capacity to have a diversified portfolio. For most funds, this translates into a minimum fund size of approximately $150 Million.

Teralys Capital has recently closed life sciences funds that meet these criteria. Some of these funds are also experimenting new business models to further increase the likelihood of financial return to investors: • TVM Life Science VII (see Box 1) is a $150 Million fund that focuses primarily on capital-efficient single asset companies. In order to do so successfully, the fund has a unique partnership with Eli Lilly and Company, which has not only invested a significant amount in the fund, but also created a unit of Chorus in Montréal, its internal CRO that advances biopharmaceutical compounds until the completion of the first proof of concept in humans; • Lumira Capital (see Box 2) has segmented its new investment vehicles into two new funds, one for earlier stage opportunities and the other one for later stage opportunities. Global pharmaceutical company Merck & Co has invested in both funds, and provides Lumira Capital with additional insights on opportunities before and during the investment.

Spotlight on Québec

TVM Life Science focuses primarily on “project-focused companies”, which are companies designed around a single therapeutic asset, financed to achieve a proof of concept in humans, which is typically the end of the first phase 2 clinical trial. These companies will have the opportunity to work with Chorus, which draws on internal Lilly skills, contract research organizations, and external consultants with very specific areas of expertise. Chorus works with development service providers across Québec and elsewhere to offer development services to project-focused companies based primarily in Québec.

With over $1.3 Billion under management, Teralys Capital (see Box 3) is Canada’s largest technology fund of funds. While Teralys has been instrumental in closing these life sciences funds, it could not have closed them alone and needs to have other co-investors for any fund to close. Teralys thus wishes to thank Eli Lilly and Company, Merck & Co, the Business Development Bank of Canada, Fondaction, Northleaf Capital Partners, and Solidarity Fund QFL, in addition to all other strategic and financial co-investors in these funds.

There remains a need for new life sciences investment funds in Québec and across Canada, especially funds that have certain unique

Lumira Capital has recently closed two funds. The Merck Lumira Biosiences Fund (target closing $50 Million) invests in Québec biotechnology companies before their products have reached proofof-concept in humans. Lumira Capital II (initial closing of $101 Million) focuses on biotherapeutic and medical device companies at a later stage of development, typically investing in the last round of financing before the forecasted exit.

capabilities (e.g., company creation) or that can invest in some less well served subsectors (such as medical devices or less-regulated healthcare verticals). In order to close, these new funds will require a concerted effort from investors in funds (LPs). The ongoing capitalization of existing LPs, at the provincial and federal level, and the participation of the private sector, remains critical. In this context, Teralys Capital salutes the commitment from the federal government to invest $400 Million in venture capital, and reaffirms the importance of its timely availability, coupled with an improved, value-added fund manager selection process as recently implemented in simi-

Teralys Capital is a fund of funds created to finance private venture capital funds focused on investing in life sciences, information technology and cleantech companies. The fund has over $700 million in capital commitments from Caisse de dépôt et placement du Québec, the Solidarity Fund QFL and Investissement Québec.

Teralys Capital is also managing two existing portfolios of venture capital funds with additional assets under management of over $600 million. It is currently the largest fund of funds in Canada.

lar programs. Teralys also strongly supports efforts to create greater links across Canada among fund managers and investors, especially along the Québec-Ontario corridor. The notion of marrying investments from Québec with significant investments from Ontario and ideally the Western Canada provinces, in a number of new fund managers will ensure critical mass, allow for stage / sector diversification, and break insularity across Canada, while leveraging the unique strengths of each province. It will also lead to the creation or growth of talented VC fund managers which can compete on an international basis.

For entrepreneurs in the life sciences and healthcare sector, the future looks promising, especially in Québec. Teralys is proud to work very hard to better the environment for life sciences entrepreneurs. Today’s environment is obviously different than yesterday’s paradigm: new financings are thought end-to-end to attain a value inflection point, an exit, or even revenue generation; only clinically meaningful unmet medical needs are financed; strategic players are ever increasingly involved early on in the life of portfolio companies; and, VC fund managers connect more into global business. As a result, the subset of opportunities which will qualify for venture capital – funded by funds whose business model fits the opportunity – should have a greater probability of success. The future holds great promise for entrepreneurs. As an industry, it is our duty to make it a success.

OCTOBER 2012 BIOTECHNOLOGY FOCUS 11

Spotlight on Québec

The changing face of R&D in Québec québec

Over the past few years, the pharmaceutical landscape has been changing. Consequently, the ways in which pharma companies conduct research are also changing, as they deal with economic and market challenges and a rising cost for drug discovery.

Québec’s life sciences industry is facing a number of challenges, including the trend of companies outsourcing more R&D, and a lack of resources for carrying out research.

To better adapt, the industry is seeking new approaches to R&D, including a focus on partnerships. There is emphasis on collaboration and building strategic relationships with government, academia and industry to better stimulate R&D and to advance drug discovery.

Biotechnology Focus takes a look at what pharma titans Pfizer Canada and Merck Canada are doing to adapt with the times, and how they are helping Québec stay in the lead in the constantly evolving world of pharmaceuticals.

Pfizer Canada: putting Québec in the driver’s seat Along with tackling industry-wide challenges concerning R&D, Pfizer is dedicated to helping Québec remain a strong leader in the pharmaceutical industry.

By far Canada’s largest pharma company in terms of employees and sales, Pfizer has 2,700 employees at eight sites across Canada, with 1,800 alone in Québec.

While over the past 10 years the company has merged at the global level, each time Pfizer Canada has kept its head office in the Montréal area. Over this time period there have been several expansion projects, including a recent major investment to renovate and update the Pfizer Canada head office.

“We went from a traditional organization where they had a Country

manager to one of business units,” says Ghislain Boudreau, vice president of Public Affairs at Pfizer Canada. “We took this as an opportunity to really shape our business around our customers, be more entrepreneurial and collaborative..”

In addition to revamping the work premises, the renovations have facilitated collaboration and provide the flexibility needed to react to internal changes, which will be needed as Pfizer Canada adopts the new R&D business model.

“There is a paradigm shift happening within the industry, where more and more we are externalizing our R&D,” says Boudreau.

“While we continue to do some R&D at Pfizer global research sites around the world, more and more we are partnering with Centres of Excellence, academia and biotechs. We’re entering into risk sharing agreements to do R&D and new product development. Pfizer is one of the pioneers in this area, and many companies are following this model.”

On June 28, 2012, Pfizer Canada and the Fonds de recherche du Québec – Santé (FRQS) announced the creation of the Pfizer-FRQS Innovation Fund for Alzheimer’s Disease and Related Disorders, thanks to $4.5 million in funding from Pfizer Canada.

This FRQS-managed research grant program will be available to Québec’s research community. There are two parts to the Innovation Fund: one involves the creation of a consortium of Québec researchers, the other is devoted to funding high-risk, high-spinoff-potential projects to enable researchers to explore new research avenues.

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Continued on page 14 12 BIOTECHNOLOGY FOCUS OCTOBER 2012

CQIB

The Life Sciences and Medical Technology Incubator

Where success is brillantly planned and organized ] [ CQIB gave us direct access to seasoned biotechnology professionals, and opened the doors to a variety of local investors.

Jo Van Betsbrugge President BioQuadrant inc.

[

CQIB positions us closer to the biotechnology and biomedical community in the greater Montreal area, as well as providing the world class equipment and technical staff essential for our research and product development.

Alain Villeneuve Chief technology officer and co-founder Genia Photonics Inc.

]

Contact information

Named Top Business Incubator (2002) by:

With the support of: Dupuis Angers, B. Pharm., M.B.A. Executive Director – CQIB Tel.: 450-688-8377 ext. 2202 dupuis.angers@cqib.org

www.cqib.org

CQIB_Biotechnology Focus Ad

Size : 8.125 x 10.875 bleed

Proof: final-2

Date: 10-09-2012

Spotlight on Québec

Continued from page 12

“As a corporate citizen we strongly believe that the industry plays a vital role in the ecosystem of the life science sector, as do academia, the federal and provincial governments, and organizations and agencies such as Montreal InVivo, Life Sciences Ontario, Rx&D and BIOTECanada,” — Boudreau.

“The purpose of creating this fund is to mobilize Québec researchers, to provide them with an infrastructure that will enable them, among other things, to set up an Alzheimer’s patient data registry. It will also make it possible to conduct innovative research for better understanding the mechanisms underlying this disease by exploring research hypotheses that have so far never been investigated. Pfizer Canada’s financial support is extremely valuable because it provides a unique opportunity to further our knowledge of this disease, which is having a considerable impact on Québec society,” says Claude Lazure, the FRQS’s acting scientific director.

The authority for this project is with the FRQS, Boudreau notes. He says Pfizer Canada will provide the funding and input on what areas to invest in, but when it comes to selecting the individual researchers, the decision lies solely with the Québec organization.

Putting Québec in the driver’s seat is important for Pfizer Canada, as the company sees itself as only one part of a larger ecosystem. As such, Pfizer Canada is involved with numerous organizations in Québec, including as a founding partner of the Québec Consortium for Drug Discovery and participating in the June 1st Québec Life Sciences Forum.

“As a corporate citizen we strongly believe that the industry plays a vital role in the ecosystem of the life science sector, as do academia, the federal and provincial governments, and organizations and agencies such as Montreal InVivo, Life Sciences Ontario, Rx&D and BIOTECanada,” says Boudreau. “And we believe that it’s through this ecosystem that we can ensure that Canada remains competitive, and let’s not kid ourselves, the emerging markets are catching up. They are not standing still while we’re trying to figure out what to do here in Canada.”

That is not to say that Québec is not putting up a fight.

“Québec policy makers, stakeholders and the life science community are engaged and understand that if you’re bringing your economic development minister and your health minister to the same table to discuss and develop a sectoral strategy, it sends a very strong signal to the industry that the province understands that the life science sector is a solution for healthcare stability and not just a cost driver,” says Boudreau. “It also sends a very strong message to the rest of the world.

This is why I believe that Québec will continue to be able to attract R&D investments, which fuel what exists already.”

Merck: committing to innovation in Québec Pharma giant Merck is revisiting the way it conducts its R&D activi-

14 BIOTECHNOLOGY FOCUS OCTOBER 2012

Ghislain Boudreau, Vice President Public Affairs at Pfizer Canada ties, by focusing on creating partnerships and collaborative research opportunities.

“As part of revisiting the way we do research, and moving from a stronger internal focus where companies like Merck used to do most of its research activity on its own, we moved into a new paradigm, where we look at more collaborative ways of doing research with partnerships, in particular in the earlier phases of research,” says Cyril Schiever, president and general manager for Merck Canada.

By focusing more on partnerships, Merck aims to provide more flexibility for scientists, and to create an ideal environment for innovation to grow. Pioneering this new research model in Québec, Merck has made numerous investments to promote R&D, namely through funds.

In 2010, the company committed to investing $100 million in research and innovation in Québec over a five‐year period. While 2010 also saw the closing of the Merck Frosst Centre for Therapeutic Research, Merck Canada continues to have a large presence in Québec, which remains the company’s headquarters for its commercial operations for human health, animal health and consumer care, as well as for its manufacturing facility. The company’s Québec presence is in part felt through strategic partnerships.

Spotlight on Québec

“It’s really about driving innovation, contributing to strengthening the life science cluster in Québec and working closely within that cluster through different mechanisms, whether its venture funds, investments in consortiums, or partnerships with hospitals and universities,” — Schiever.

• AmorChem Venture Fund Merck invested $6.8 million in AmorChem, a fund launched in 2011 to increase the commercial potential of quality academic research carried out in Québec. With committed capital of $41.25 million, AmorChem focuses on investing in promising life science projects from Québec based universities and research centres. The fund finances research‐stage projects, enabling them to reach pre clinical proof of concept in a semi virtual mode. It sells projects that have reached early proof of concept to large biotechnology or pharmaceutical companies, or bundles similar projects into new spin out companies.

Cyril Schiever VP & Managing Director at Merck Canada “When it comes to Québec, the province has a very strong research foundation and network, and we found that it’s the right place also to continue investing,” says Schiever. “It’s not by coincidence or the fact we closed our research centre here, it’s really because there’s good science in Québec and good investments follow good science. Therefore, we decided to go into a number of initiatives and partnerships in Québec ranging from investments that we’ve done with AmorChem, and more broadly the CQDM.” To date, the company has mainly focused on supporting early stage biopharma research, through venture funds and a consortium mechanism. Merck’s next phase of investment will target medically relevant academic research across the province. Its recent initiatives include: Merck Lumira Biosciences Fund: • Launched in 2012, Merck has invested $35 million in the Merck Lumira Biosciences Fund, as its primary investor and only pharmaceutical industry partner. Currently at $43 million, this fund is expected to reach $50 million and will invest exclusively in early stage biotech companies with operations in Québec. The fund will be managed by Lumira Capital. Other limited partners include, among others, Teralys Capital.

• Consortium québécois sur la découverte du medicament In the Consortium québécois sur la découverte du medicament (CQDM). As a founding member, Merck had also granted $1 million to the first year of operations of the consortium in 2009. Projects funded by CQDM target the development of innovative tools and technologies that accelerate the drug discovery process.

“It’s really about driving innovation, contributing to strengthening the life science cluster in Québec and working closely within that cluster through different mechanisms, whether its venture funds, investments in consortiums, or partnerships with hospitals and universities.”

Along with being a founding member of the CQDM, and participating in the recent Québec Life Sciences Forum, Merck Canada is continuing to invest in the life sciences. Its investments are focused on driving innovation, strengthening the life sciences industry and keeping skilled scientists in Québec. After less than two years, Merck’s fulfillment of its investment promise stands at over $47 million.

“I believe that there is a strong future for life science in Québec because there is a strong and diverse life science cluster already in place with a large number of very active players and very good science,” says Schiever. “As a result, Merck will continue investing in Québec, because Merck will invest where there’s good science.

We’ve committed to invest $100 million over a number of years, and of that approximately $50 million still needs to be invested. Merck is committed to innovation and investing in research.”

OCTOBER 2012 BIOTECHNOLOGY FOCUS 15

By Daniela Fisher

Spotlight on Québec

québec

Incubating innovation in Québec

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s a world leader in the life sciences, Québec has always put a strong emphasis on synergy and collaboration. Therefore, it is only natural that the province is home to the Québec Biotechnology Innovation Centre (CQIB), a life sciences incubator that for the past 17 years has been growing strong businesses and helping start-ups enter the industry.

Based out of Laval, the CQIB is a not-for-profit organization that provides physical workspace and business advice to early stage companies in the life sciences or health technology industries.

The business incubator was founded in 1995, by Laval Technopole and the INRS - IAF (Institut national de la recherche scientifique - Institut ArmandFrappier).

“It was a question of mutual success,” says executive director of CQIB, Dupuis Angers.

“The development people were referring clients for the incubator, and Laval Technopole was using it as a part of their marketing program, to promote the overall area and make it what it is today.”

The incubator soon became a part of various technology and business networks, both in Canada and abroad, offering its mentoring services across Québec as well as internationally.

In 2002, the organization was recognized with the “Randall M. Whaley Incubator of the Year Award” from the National Business Incubation Association. With this distinction under its belt, in 2003 the CQIB relocated to the Laval Biotechnology Development Centre (LBDC), a 128,000 square foot building dedicated to the life sciences.

It is here that fledgling entrepreneurs or well-seasoned veterans with start-up compa-

16 BIOTECHNOLOGY FOCUS OCTOBER 2012

CQIB is located at the core of Laval’s Biotech City on the grounds of the INRS-IAF. nies can apply to the CQIB to rent laboratory and office space in the incubator. CQIB’s location is a strategic one, as the building is located at the core of Laval’s Biotech City, which has a bio-cluster of more than 80 companies.

“Laval has always been very committed to the life sciences sector,” says Angers. “It’s a good location. It’s one of the biggest advantages: the location of the Centre, and also the fiscal programs that have been put in place for the entrepreneurs to work with.”

CQIB’s proximity to the life sciences community, and its financial services, are strong attractions for entrepreneurs looking for help cracking into the industry.

For Angers, who leads the CQIB along with five team members and a board of directors, helping entrepreneurs go through the incubator is a passion close to his heart.

“I really am an entrepreneur at heart,” says Angers, who has a Bachelor in Pharmacy,

a Master’s in business administration from Harvard University, and 35 years’ experience in the private sector.

“I like to support entrepreneurs to build their businesses up. That’s the thing I enjoy most, working with entrepreneurs and giving them a hand to make their companies go forward.”

As of Dec. 31, 2011, 39 start-up companies have participated in the program, while generating over $70 million in revenues.

Through CQIB’s help, these companies have made a significant economic impact.

Over the years, it has developed a business model for helping entrepreneurs create and start a business. The secret in part is being adaptable, Angers says.

“I would say being flexible, that’s a very, very important point,” says Angers. “When a company needs to adapt to a certain environment; they can rely on us to help them do that.”

Spotlight on Quebec

CQIB offers fully furnished laboratory suites and specialized equipment to start-up companies

Along with flexibility, the CQIB provides incubating companies with a combination of workspace, support services and mentoring from Montréal InVivo. The incubator also provides access to biotech facilities and equipment, as well as a broad consultant network.

For a company to be accepted to the incubator, CQIB looks at its financial capabilities, overall business plan, and its IP, or its platform for developing IP. Angers stresses that they do not look as much at revenue, as this is difficult to predict with early stage companies. Along with these requirements, the CQIB looks for a little something extra.

“We always like it when there’s a part of the business plan that has got some innovation, either short or medium term,” says Angers.

For those first applying, there are two programs to choose from: pre-incubation or incubation. The pre-incubation program looks more to university researchers or entrepreneurs who do not yet have a firm business plan for a potential company.

“Such projects are more upstream, earlier in the process,” says Angers. “They will need some support to put their business plan and financial projections together, so we help them off-site to get ready to get incubated.”

For companies accepted to the incubation program, they can run their businesses out of the incubator, with the CQIB helping tackle administrative hurdles.

“They don’t have to have people managing specific tasks from an administrative or operational viewpoint, we do it for them,” says Angers.

“So basically, we free up their time, and they can spend more time developing new projects with customers, or spending more time in the lab and things like that.”

Along with freeing up time for R&D, being within the CQIB gives companies a fiscal advantage by offering easier access to funding sources. For R&D companies renting space in the LBDC buildBER BioFocus_Mar2011_OUT.indd 1

2/9/11 10:00:13 AM

OCTOBER 2012 BIOTECHNOLOGY FOCUS 17

Spotlight on Québec

ing where the CQIB is located, Investissement Québec offers tax breaks on scientific equipment purchase or rentals, as well as the salaries for employees using said equipment.

As a private not-for-profit that is currently receiving most of its funding from the federal and provincial governments, as well as the city of Laval, strengthening its finances is an important issue for the CQIB. In the future, Angers hopes for the organization to receive more business and private sector influence, as well as investment.

While currently there are 10 companies in the incubator, the CQIB has helped produce 20 other companies with diverse backgrounds, from bio-therapeutics and diagnostics to contract research organizations, agri-food and medical devices.

Its impressive list of graduates includes: Angiochem, Bio-K Plus International, BioQuadrant, CIRION Biopharma, Harmonium International, Replicor, and Warnex.

The probiotic company Bio-K Plus International has been with the CQIB since its inception. It was through the CQIB that the company developed its nutraceutical line over 15 years ago.

“At first they were using the facilities here to make some small batches, to put together

their quality programs, and develop their scientific argumentation to go on the market,” says Angers. “They used this as a base.”

Since then, Bio-K Plus International has built its own facilities for production, although the company retains close ties with the CQIB. Bio-K Plus has started a new division of the company on the pharmaceutical side that is currently renting space in the incubator.

Another more recent success story is Paraza Pharma, which has grown rapidly in the incubator. At present, the drug development company occupies the largest amount of space at the CQIB. “When they started last year they had one employee, and now they are 10 and they are moving forward to double the size of people within the next year, to go up to 20,” says Angers.

In the future, as the incubator continues to produce successful companies like Paraza Pharma, Angers recognizes that there is always room for improvement. This includes keeping an eye out for more pre-incubation companies.

“Right now we have much more in incubation. We have to reach out for pre-incubation companies,” says Angers. “We have to per-

CQIB’s offices and laboratories occupy 25% of Laval’s Biotechnology Development Centre, a multi-tenant building dedicated to the life sciences.

18 BIOTECHNOLOGY FOCUS OCTOBER 2012

Dupuis Angers – CQIB’s Executive Director form a lot more in that viewpoint, because when you have a good pipeline of pre-incubation, then they become your “incubees,” whereas if you don’t have many, you start directly with the incubation.”

Along with focusing on early stage projects, the incubator will continue providing and improving its services, as it helps companies go from concept to concrete.

“Improvement of services, I think it’s very, very important,” says Angers. “I think we have to be better at developing links with university, and we have to keep up our good reputation that we have a good batting average at the end of the day.”

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Spotlight on Québec

québec

By Janet Damianopoulos

Diagnostic Advantage Québec City’s DiagnoCure set out with a mission to lead development and provision of diagnostics for cancer detection and management.

W

ith three successful diagnostic tests already thriving in a market that most companies would be lucky to breach with one, the company is making good on its goal. What started with the personal laboratory of Dr. Yves Fradet, president and chief medical officer of the company, has grown into a driving force in cancer diagnostics that occupies a critical niche, not only detecting cancer but also aiding the decision making process for its treatment.

DiagnoCure’s success is rooted in Fradet’s fascination with immunology and its applications. A professor at Laval University and a full time clinician, Fradet has been the company’s vice president of research and development as well as its chief medical officer since its inception. After earning his medical degree, Fradet’s interest was piqued by immunology. Entering into specialty training, he chose urology for its immunotherapeutic cancer applications. He also studied patients with kidney transplants from an immunological perspective. After finishing urology training at Laval, Fradet went to Memorial Sloan-Kettering Cancer Centre where he worked with Dr. Willet Whitmore, considered one of the fathers of urologic oncology. Returning to Laval, Fradet established his clinical practice as a urologist/oncologist. He also established a laboratory at the university with funding from the Canadian NCI along with some other agencies in Canada. The lab later received funding from NCI U.S. for bladder

20 BIOTECHNOLOGY FOCUS OCTOBER 2012

cancer research. Among the lab’s early developments was a new set of antibodies targeted toward bladder cancer.

Fradet had the idea to develop tests based on the antibodies and began to think about licensing such tests. He started to work with a reference laboratory in the U.S. that used the antibodies to develop a test to monitor and diagnose patients with bladder cancer. At the same time, Fradet was part of the first BioContact, an annual three day event in Québec that would become one of the biggest biotechnology events in Canada. It was there that Fradet met his first business partners, who were looking for opportunities in the area. In 1994 they formed a company. For a while the newly formed team developed ideas in Fradet’s lab with its funding but soon they decided to create DiagnoCure, a commercial endeavour.

After working on the business plan for one year, DiagnoCure raised a private investment of $6 million in November, 1995. “At that time people believed in the potential of biotech and they were pretty undifferentiated about what it could do,” says Fradet. The company incorporated new projects from the university so that there were a variety of activities going on. A year later, they went public and raised another round of financing.

The year 2000 was a turning point for DiagnoCure. The FDA approved the company’s first product, the ImmunoCyt bladder cancer test and at the same time the company announced its idea of a urine test for prostate cancer. It was opportune timing. “That coincided with the technology bubble. Our stock at that time went from 50 cents and rose rapidly to six dollars in a matter of days, it was amazing.”

Surveying the international scene for technology possibilities, Fradet found a marker called PCA3 in a lab at Nijmegen University in the Netherlands. PCA3 is over expressed in the cells of a cancerous prostate compared to the cells of a normal prostate. DiagnoCure acquired worldwide rights to the gene and its promoter and set to work developing a urine test for the detection of prostate cancer. The PCA3 is a nucleic acid amplification test, which measures PCA3 and PSA RNA as a calibrator for the amount of prostate cells. The resulting ratio of PCA3 over PSA RNA gives the risk of having a positive biopsy.

The lower a man’s PCA3, the lower the probability that his biopsy will be positive; the higher his PCA3, the higher the probability that his biopsy will be positive.

The first version of the PCA3 test was an analyte specific reagent for the U.S. market in 2003. The company made a deal with Gen-Probe to develop and commercialize diagnostic applications of the PCA3 marker. They launched the test in Europe in 2006 and despite little marketing there are over 80 publications of studies that clearly show

Spotlight on Québec

its benefit. More specific than the standard Prostate Specific Antigen blood test, the PCA3 test was recently approved by the FDA as a way to help men that have had a first negative biopsy decide whether they need a further biopsy (as the first may miss cancer). Using a PCA3 cutoff of 25 there is more than a 90 per cent chance that the second biopsy will be negative. “In fact, half of the men have a PCA3 below 25. So in other words, you can save as many as half of the biopsies at 2000 dollars a piece, so it’s cost effective for the patient. It’s a vast improvement,” notes Fradet.

Since its introduction, the PCA3 has had a significant impact on the market. There are multi-centre studies of the PCA3 in Europe that shows the test performs as well in men before their first biopsy. The test was also featured in seven presentations by leading professors and researchers at the 27th annual European Association of Urology (EAU) in Paris earlier this year. Thus, the medical community is aware that the burden of diagnosis and treatment can be reduced through the use of a totally non-invasive urine test. With the FDA approval, granted in February, Gen-Probe now has the ability to market the test to urologists and also, in the US, directly to patients.

DiagnoCure also has a colorectal cancer test that they have made a deal with Signal Genetics to commercialize. The GCC Previstage is a nucleic acid test that examines lymph nodes from tissue that has been cut out at the time of colon cancer surgery. Pathologists typically study this tissue and section lymph nodes to check for cancer cells.

“That coincided with the technology bubble. Our stock at that time went from 50 cents and rose rapidly to six dollars in a matter of days, it was amazing.”

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OCTOBER 2012 BIOTECHNOLOGY FOCUS 21

Spotlight on Québec

The problem is that this type of sampling amounts to less than one per cent of a node’s total volume.

To help decide whether stage 2 cancer patients (indicating a recurrence rate of 15 per cent at 3 years) should receive chemotherapy, the GCC Previstage test takes each lymph node, cuts it in half and extracts the RNA to measure a marker called GCC. There are usually about 15-17 nodes per patient. If more than 10 per cent of the nodes are positive for GCC, patients will have the same recurrence risk of stage 3 cancer patients (meaning a 30 per cent risk of recurrence over 5 years) and should receive chemotherapy. Last June the company concluded a transaction with Signal Genetics, selling their U.S. lab operation for $5.7 million. Signal is funding a 500 patient study needed to further validate the test and give even more confidence to clinicians so they can push to sell it.

Research underway at the moment includes a clinical study to collect samples from bronchial aspirations (the typical lung cancer diagnostic procedure) to develop a lung cancer diagnostic test. Bronchial aspirations are frequently negative or inconclusive. Negative or inconclusive tests also allow cancerous nodules in the lungs to grow before being properly diagnosed. DiagnoCure aims to develop a more sensitive and specific test to better diagnose such nodules and aid decision making. The company hopes to have positive results of a pilot study on a lung cancer diagnostic test by the end of the year.

DiagnoCure is unique in having brought three successful products in the field of molecular diagnostics to market. Their major challenge now is financial backing. “You can have the best test but if you don’t have the money power behind it to change the practice of doctors, it’s a challenge. It is difficult in a diagnostic company because you’re not talking about revenues of tens of thousands of dollars per patient; you’re talking about two hundred dollars per test, for example. You have to have high volume.” Regarding challenges, Fradet says he has learned that management is the key to generating a productive company. Good management, he says, can turn unrealized ideas around and re-adjust them to make good use of money invested

in a company. “The challenge is to convince people based on the reputation you have and the potential that you show them of the business model.”

Looking to the future Fradet shifts his attention to personalized medicine. “I think everybody talks about personalized medicine and nowhere more than in cancer.” He explains that in the treatment of cancer, some drugs have worked but the model of giving the same drugs to everybody only benefits a few and the significant difference observed in those few patients skews the data toward giving everybody the same treatment. With subsequent drugs, benefits are limited to a subset of patients. A lot of drugs with the potential to help individuals will never make it to market as they will not improve overall survival of the cohort. “I think we are bound to go to a more personalized approach both in terms of treatment and discovery. If we want to make progress in the fight against cancer we have to be more subtle; we can not just treat everybody the same way and hope that we’ll make major improvements. We can now make major improvements by adapting our treatment to the right person at the right time.”

Fradet sees DiagnoCure taking a significant role in personalized medicine as it emerges. He sees a window of opportunity for DiagnoCure to attract the interest of small players with good ideas and bigger players that need content for their platforms and instrumentations.

“I think the next big area will be genetics and molecular diagnostics for cancer. We come with experience and products hopefully at a time when the opportunity will grow in cancer diagnostics.” We can look forward to watching the company grow with the opportunities.

For more Company Profile information visit our COMMERCIALIZATION Web Portal at www.bioscienceworld.ca

Fradet sees DiagnoCure taking a significant role in personalized medicine as it emerges.

22 BIOTECHNOLOGY FOCUS OCTOBER 2012

Compiled by Daniela Fisher

québec

Spotlight on Québec

CQDM: Success story

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ince 2009, Biotechnology Focus has been profiling the Québec Consortium for Drug Discovery (CQDM), a non-profit consortium created in 2008 as a strategic initiative for drug discovery.

The CQDM is responsible for fostering partnerships between biotech companies, universities, and hospitals. As a publicprivate venture, the CQDM is supported by six A-list pharmaceutical companies, including Merck, Pfizer, AstraZeneca, Boehringer Ingelheim, GlaxoSmithKline and Lilly, along with Canada’s federal and provincial governments.

Over these past few years, the CQDM has seen the birth of many innovations and collaborations. Its principal mission is to identify, finance and support research projects aimed at developing tools and technologies that facilitate new drug discovery and development. These projects are carried out in partnerships between the academic and hospital networks in the public sector, and pharma and biotech companies in the private sector.

By promoting this synergy between academic and industry, and through creating an international exchange network, the CQDM intends to expand Québec’s leadership in biopharma research, and open up new doors for research that will benefit the entire industry.

The CQDM has also increased Québec’s collaboration with international industry partners, including a new bilateral agreement signed in June 2012 between the CQDM and Lyonbiopole. At the BIO International Convention 2012, Lyonbiopole joined the already existing consortium signed in November 2010 between Alsace BioValley and the CQDM. This new agreement aims to develop a joint program to enhance biomedical research in Québec, Alsace and Rhone-Alpes, by aligning international resources. This collaborative program aims to co-finance research projects between the three regions: Québec, Alsace and RhoneAlpes.

This year also saw the creation of a new

Plants thrive in a sunny environment at Medicago facilities initiative to fund collaborative life sciences research projects in the Ontario-Québec Life Sciences Corridor. The CQDM is partnering with MaRS Innovation (MI), Ontario Brain Institute (OBI) and Ontario Centres of Excellence (OCE), to launch the Québec/Ontario CQDM Funding Program, which will support collaborative research projects that seek to develop new tools for biopharmaceutical research.

Since 2008, the CQDM has launched seven competitions through four funding programs. Over 325 projects were submitted, totaling over $400 million in funding requests.

Currently, the Consortium is supporting 27 outstanding research projects, adding up to $29.7 million. These 27 projects involve a network of more than 350 researchers, working together to address the most important aspects of the pharmaceutical R&D productivity gap.

The first CQDM projects are now reaching maturity, and can be seen as a testament of the CQDM’s success. They are also an example of how the CQDM’s business model can help generate impact on biopharmaceutical research.

One such success story is Medicago Inc., a clinical-stage biopharmaceutical company developing novel vaccines and therapeutic proteins to address a broad range of infectious diseases worldwide.

In 2009, Medicago was awarded $1.77 million in funding from the CQDM, to support the development of Medicago’s VLPExpress™, a high-throughput technology for accelerating the discovery and development of new vaccine antigens based on Virus-Like Particles (VLPs). The automated platform enables the rapid expression, purification and testing of VLPs, to identify the best antigen presentations for a disease-causing agent within 10 weeks.

As one of the recipients of the CQDM’s very first competition, the company has been with the CQDM since the Consortium’s inception. Their partnership has been successful: in February 2012, Medicago announced plans to invest approximately $4 million to enhance the capacity of its pilot production facility located in Québec City.

The investment included capital expenditures, labour costs and preclinical studies for a rabies vaccine as well as other products.

OCTOBER 2012 BIOTECHNOLOGY FOCUS 23

Spotlight on Québec

Dr. Louis-Philippe Vézina, co-founder of Medicago and its Chief Scientific Officer Medicago’s VLPExpress™ platform, the project developed with the support of the CQDM, is now widely successful and benefited Medicago in multiple ways.

Biotechnology Focus talked with Medicago Inc.’s Dr. Louis-Philippe Vézina, co-founder of Medicago and its Chief Scientific Officer, about the company’s relationship with the CQDM, as well as the support it provided for Medicago’s VLPExpress™ platform.

Biotechnology Focus (BF): How did Medicago become involved the CQDM? Dr. Louis-Philippe Vézina (LPV): “In 2008, when the CQDM launched the competition, we thought it would be very helpful for us.

Medicago was working with recombinant vaccines, which have the advantage of only needing the sequence of a viral protein to

24 BIOTECHNOLOGY FOCUS OCTOBER 2012

start development, so this is a pretty quick process. We knew already that we could produce an H5N1 influenza vaccine candidate. Later in 2009 we succeeded during the H1N1 pandemic by generating a VLP vaccine starting from the gene from H1N1. So now instead of going from the pilot-scale to the commercial-scale or a larger scale, we can also scale it down and provide a high-throughput miniature version of this technology with the aim of speeding up the development of new vaccines.

What we offered as a concept then was that, since we had been able to switch the technology from lab to small pilot to launch pilot, and we had a small commercial facility in place, if we were able to size it down to have it under a high-throughput approach, we could then offer to potential partners the use of this small or high-throughput platform for the development of a new VLP vaccine.”

BF: What was the significance of being funded by the CQDM? LPV: “We probably would not have done this project to develop VLPExpress™ without them. Small biotech finds it difficult to invest $2 million in a conceptual development such as that, and as the scope of that project was the development and the building of an automated robot that could help us speed up the choice of vaccinal antigens and other proteins. We needed a fairly large piece of equipment that we had to custom develop.

We had good support from the CQDM team as well, as most of them came from the pharma industry or the biotech venture capital space, so they understood our approach towards the project. I think they knew what

impact it could have on a corporate level for us, because for us the bet there was that it would open our relationships with larger, more strategic partners.”

BF: So the VLPExpress™ project was developed with strong support from the CQDM? LPV: “I think most of the people you would talk to who have had business to do with CQDM would agree with me, that they are a very competent group. They are rapid in decision-making and have had very clear and open communications with Medicago.

The CQDM team is very competent in terms of the technical perspective so we were able to explain in detail the challenges and issues we were facing and they has a solid understanding. They have sufficient experience on their own, in terms of science and R&D. They understand the things that will work and were very receptive and helpful. The CQDM team is very precise in its understanding in what are the deliverables for projects, and I think that before going into and making the investment, they are good at sizing out what is going to work and what is not going to work.

With Medicago, the CQDM was very close to the bull’s eye in terms of the issues they thought would be difficult and things that would be easier. At Medicago this project has exceeded our expectations. Even before finishing up this project, we had inquiries from groups that wanted to jump in and use the technology. So that’s an encouraging outcome for the CQDM as I believe their final goal for this is to take a technology and make it viable for use in the industry, to develop new medicines, new therapeutics and new vaccines.”

By Carmela DeLuca, Bereskin & Parr

Intellectual Property

Biomarker patents

where do we stand now?

The scope of biomarker patents has been a troubling question for the diagnostics industry in recent years due to a series of controversial US court decisions that have narrowed the scope of patentable subject matter for diagnostic method patents.

T

he debate reached fever pitch earlier this year as the US Supreme Court handed down its decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc. (“Mayo”), which found claims directed to the relationship between the concentrations of blood metabolites and response to a therapeutic unpatentable.

Some good news arrived more recently in the United States Court of Appeals for the Federal Circuit (CAFC) decision in Association for Molecular Pathology (AMP) and ACLU v. USPTO and Myriad Genetics (“Myriad”), which found isolated DNA and process claims that include at their “heart” use of a man made material to be patentable.

So where do we stand now?

Generally, biomarker patents involve the use of information. Broadly speaking, a “biomarker” is any biological substance (proteomic, genetic or metabolic) that can be used as an indicator of disease, for example the level of a protein, nucleic acid molecule or metabolite whose concentration reflects the severity or presence of a disease. “Personalized medicine” generally refers to the use of biomarker profiles to individualize medical care. “Biomarker patents” therefore can include claims to isolated biomarker related products (e.g. isolated proteins and isolated DNA), claims to compounds for detecting biomarkers (e.g. antibodies) and method claims for assaying biomarkers and

diagnosing disease or prognosing outcome.

“Biomarker patents” can also include personalized medicine type claims involving treating a disease or so called “test and treat” type claims. Distinguishing which uses of biomarker information meet the standard for patentable subject matter and which relate solely to “natural correlations” has been difficult for the courts to articulate, harder for the US patent office to apply and vexing for diagnostic patent holders to comprehend.

The judicial narrowing of the patent eligibility of method claims began in 2008 with In re Bilski. The subject patent was a business method patent, however its effects were not limited to business patents. The CAFC held that the applicable test for patentable subject matter was the machine or transformation test which required the method be tied to a machine or result in a transformation to be patent eligible. Its effect was to narrow the scope of patentable subject matter for diagnostic method claims. In 2010 the US Supreme Court issued an opinion on appeal (Bilski v. Kappos) affirming the judgment of the CAFC but rejecting that the machine and transformation test was the sole test for pat-

ent eligibility for process claims. The court decided that the Bilski invention was not patent-eligible subject matter because it was an attempt to patent an abstract idea.

At the same time Bilski was percolating through the courts, Mayo was being judicially considered.

The patents in question in Mayo were directed to methods for determining optimal dosages of thiopurine drugs to treat autoimmune diseases. They involved administering the drug to the patient and determining the level of a metabolite. A level less than a predetermined amount indicated a need to increase the amount of drug subsequently administered to the patient and a level above a predetermined level indicated a need to decrease the amount of drug subsequently administered to the patient. The district court in Mayo found the claims were invalid for lack of patentable subject matter on the basis that the claims in question were directed to natural phenomenon. Later on appeal, the CAFC reversed and held that claims that include an “administering” step or “determining” step meet the machine or transformation test and are patent eligible. However, the decision

OCTOBER 2012 BIOTECHNOLOGY FOCUS 25

B

Intellectual Property

Method claims directed to screening for mutations recited only “comparing” or “analyzing” DNA sequences were found to be patent ineligible as such claims included no transformative steps and covered only patent ineligible abstract mental steps. of the CAFC was vacated and the CAFC was asked to reconsider the decision in light of the US Supreme Court’s determination in Bilski, that the machine and transformation test was not the only test for patent eligibility of process patents. The CAFC again upheld the claims.

The US Supreme Court, interested in this outcome, agreed to review the decision and consider the question whether the test for patentable subject matter is satisfied by a claim that covers observed correlations between blood test results and patient health.

In a decision that stunned the diagnostics industry, the US Supreme Court reversed the CAFC’s twice finding of patent eligibility and held that certain personalized medicine claims were directed to a natural law and unpatentable even though the rejected claims contained both an administering step and a determining step. The US Supreme Court, in rejecting the claims, indicated that its conclusions rested upon examination of the particular claims in light of the Court’s precedents stating that “[t]hey warn us against upholding patents that claim processes that too broadly preempt the use of a natural law.” The court considered the claimed steps to be conventional, well-known and routine. Something more, according to the US Supreme Court was needed to render a natural correlation patent eligible. The decision however contained little guidance on what was “the something more.”

One thing was clear - the bar for patentable subject matter for diagnostic claims had been significantly raised.

A partial reprieve came in August 2012 when the CAFC handed down its decision in Myriad. At issue in Myriad were composition claims directed to isolated DNA, specifically the BRCA-1 and BRCA-2 genes linked to breast and ovarian cancer, and method claims directed to screening for gene mutations or potential therapeutics.

Method claims directed to screening for mutations recited only “comparing” or “analyzing” DNA sequences were found to be patent ineligible as such claims included no 26 BIOTECHNOLOGY FOCUS OCTOBER 2012

transformative steps and covered only patent ineligible abstract mental steps.

However, Myriad’s right to patent isolated DNA of BRCA1 and BRCA2 was affirmed.

The CAFC stated that “[p]ermitting patents on isolated genes does not preempt a law of nature. A composition of matter is not a law of nature.”

The CAFC also reversed the district court’s decision that Myriad’s method claim to screening potential cancer therapeutics was directed to patent ineligible scientific principle. The CAFC reiterated that the screening claim required in addition to the step of comparing the cells’ growth rates, the steps of growing transformed cells, and determining those growth rates. The CAFC relied on the fact that those steps were transformative stating: “Although the Court has held that certain transformative steps are not necessarily sufficient … if the recited steps only rely on natural laws, we once again even in light of Mayo, arrive at the same conclusion of patent eligibility because at the heart of the claim is a transformed cell, which is made by man, in contrast to a natural material.”

The CAFC added performing “operations, even known types of steps, on, or to create, novel, i.e., transformed subject matter is the stuff of which most process or method invention consists. In situations where the objects or results of such steps are novel and nonobvious, they should be patent-eligible.”

Based on the above case law it seems clear process patent claims that include only mental steps such as “analyzing” or “comparing” do not meet the test for patent eligibility.

Isolated DNA is patentable and claims that involve at their “heart” a man-made product may meet the requirements for patentable subject matter. Similarly claims that “create novel, i.e., transformed subject matter… where the objects or results of such steps are novel and nonobvious” as in the case of a novel biomarker, particularly where the determination is tied to a specific method would seem to be patent eligible.

Can Mayo and Myriad be reconciled?

Perhaps. Although Mayo claims involved administering a drug, the “heart” of the claims in question involved determining the level of the metabolite to determine the optimal dosage of the drug. The determining step however was not novel or nonobvious as the level of metabolite was routinely assessed to assess toxicity. What was new in Mayo was the precise metabolite level associated with toxicity. Further, although determining the metabolite level arguably involves a transformation, specific steps for determining the metabolite level and the transformation produced in such steps was not claimed. In Myriad, the screening claim found patentable involved several steps which arguably did not pre-empt all methods. Accordingly it would seem that the cases can be reconciled.

Whether these distinctions should affect patentability is however a different question.

Although it is too early to assess the extent of the full impact of the Myriad decision on process claims, reassurance that isolated DNA remains patentable and guidance on what can transform a natural correlation to a patent eligible application are welcome developments. It also remains to be seen whether the diminished scope of patent protection will affect investment into the discovery and development of new biomarkers.

Carmela DeLuca, Ph.D. (Exp. Med.), J.D. is an associate lawyer with Bereskin & Parr LLP’s Biotechnology and Pharmaceutical Practice group. Carmela can be reached in Montréal at 514.871.2929 or cdeluca@bereskinparr.com.

For more Intellectual Property information visit our COMMERCIALIZATION Web Portal at www.bioscienceworld.ca

By Mehrdad Hariri and Anton Neschadim

ACROSS CANADA

Alberta immerses in innovation policy discussions at CSPC 2012 The fourth Canadian Science Policy Conference (CSPC) is coming soon to Western Canada and will shine the spotlight on its influences on driving economic growth and innovation in Canada. The conference will be one of the largest events of 2012 examining Canadian policies governing science, technology and innovation, and will feature more than 80 speakers in 21 panels. CSPC has become the most comprehensive annual national forum on science policy issues affecting Canada, and is attended by the leading voices of the Canadian science and innovation policy community.

CSPC, operating as a grassroots movement, has established a network of partnerships with the full spectrum of science policy stakeholders, including organizations that are the central representatives of the healthcare, life sciences, and biotechnology industries and their respective professionals in Canada. More than 100 organizations have been engaged in some form of partnership with the conference, and more than 100 leaders of the broader science policy community have served on CSPC’s Advisory and Honorary Committees over the past few years. Bringing together professionals from business, academia, government and nonprofit, CSPC provides an annual forum to discuss the most relevant issues to science, technology and innovation in Canada during its conference sessions.

In response to the needs of the sciencepolicy community, CSPC endeavors to be an effective and unique annual forum that draws people of diverse backgrounds from across the nation and beyond. This year, CSPC will feature panels falling under five major conference themes: energy, agriculture, healthcare, and science, technology and innovation. This year, all of the sessions have been proposed, developed, and organized by members of the broader Canadian science and technology policy community.

CSPC 2012 will focus discussions on such topics as biofuels, genomics, stem cells and

regenerative medicine, entrepreneurship and innovation, and healthcare policies.

The healthcare theme will feature a panel on next generation e-Health that will discuss how integrating research, policy, and industry could lead to a sustainable improvement in national healthcare. In the face of Canada’s aging population and steady increases in healthcare expenditures to GDP, this panel will examine how policy could be applied to balance and maximize the healthcare system’s ability to harness the many benefits innovation brings to healthcare, including cost, efficiency, sustainability, universality, and improved health outcomes.

Other healthcare panels featured will include “Building Sustainable Healthcare: Policies, Perceptions and an Aging Population” and “The Power of Food: Improving the Health of Canadians.”

CSPC 2012 will feature panels on challenges in public biofuel policies, impact of livestock genomics on society, role of fundamental research in driving Canadian innovation, and biotechnology’s role in Canadian economy. Similar to last year, Genome Canada will feature one of its Genomics, Public Policy and Society (GPS) panel series. CSPC 2012 is a must-attend event for biotechnology and biopharmaceutical industry leaders and key decisions makers engaged in the constant struggle of navigating Canada’s science, technology, and innovation policy and regulatory landscape.

The conference has produced a wealth of contributions to the science policy community in Canada. Last year alone, the conference produced a critical review of the “Jenkins Report” on federal spending on R&D in Canada, and a look at the role of Canadian small and medium enterprises (SMEs) in innovation. Conference materials, proceedings, and reports are made available to the public and help generate a great deal of discussion and debate in the community.

CSPC believes that Canada is entitled to its own national forum on science policy, and

“Minister of State, Science and Technology Gary Goodyear delivers a special keynote address during the CSPC 2010, Montreal.”

“Science and Politics in Canada” keynote panel at CSPC 2011, Ottawa L to R: MPP Reza Moridi, MP Dr. Kellie Leitch, MP Marc Garneau, MP Hélène LeBlanc, President & CEO, Genome Canada, Pierre Meulien.

Photos courtesy of: Anatoliy Romanko.

will continue building bridges between the various public and private-sector S&T and innovation policy stakeholders. CSPC 2012 is to be held at the TELUS Spark Centre in Calgary, Alberta from Nov. 5 to 7, 2012.

For more information please visit www.cspc2012.ca

OCTOBER 2012 BIOTECHNOLOGY FOCUS 27

CALENDAR OCTOBER October 7-9 BioPartnering FutureEurope Venue: Brussels, Belgium Tel: +33 (0) 472.270.089 Email: oduchamp@techvision.com Web: http://www.techvision.com/bpfe/

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THE LAST WORD

By Rob Henderson, Executive Director, BioTalent

Partnerships: Value That the Bio-economy Needs Companies operating in Canada’s vibrant, dynamic biotechnology sector are always looking to get more value from their industry associations. BioTalent Canada is answering the call by committing itself to what the industry needs now.

It has been over six years since BioTalent Canada emerged from its predecessor Biotechnology Human Resources Council (BHRC). With an ever-expanding portfolio of cutting-edge HR products and services, the non-profit national organization is now leveraging its recent accomplishments with a bold and determined new vision for the future.

Today, BioTalent Canada is moving forward with a business approach that will ensure biotech companies gain more value from the association than ever before.

Having joined BioTalent Canada as Executive Director one year ago, I have experienced big changes and seen many new opportunities.

HR Still Key for Canadian Bio-economy Rob Henderson, Executive Director, BioTalent Canada

Human resources are incredibly important for of any business, but perhaps even more so in the Canadian biotech sector. Biotech companies that raise the most capital or complete the most successful partnership ventures all employ top-notch talent.

When investors and other potential sources of funding evaluate the opportunity that a company represents, they look not only at the science being developed, but also at the expertise, experience and skills of its team. Having the right staff holds value for partners and investors.

However, one of the main challenges for the bioeconomy in Canada is that a vast majority of private-sector organizations — more than 75 per cent — are small and medium enterprises (SMEs). Biotech SMEs have to put a high premium internally on innovation and commercialization which means dedicating fewer resources or personnel to HR; therefore, finding and grooming quality talent is complicated.

That is why BioTalent Canada is re-affirming its engagement to bio-economy companies by providing HR solutions they need, allowing them to concentrate entirely on reaching their business goals.

Looking Ahead to New Initiatives So, what will this renewed commitment to the industry mean for BioTalent Canada?

30 BIOTECHNOLOGY FOCUS OCTOBER 2012

First, BioTalent Canada will build on its success by continuing to focus exclusively on HR so that it can add value to bio-economy businesses.

BioTalent Canada will provide new thought leadership in HR solutions, project management, skills development services and labour market analysis. This leadership will complement the research, reports, courses, The PetriDish™ job board and other products that the organization offers to promote skills development within the industry, and to help companies reach the next level.

I have connected with hundreds of SMEs across the country and they all complain that in a tough economy they need more value from their membership and consumer dollar. BioTalent Canada has listened and is now implementing changes to deliver more value to SMEs. We’re excited that BioTalent Canada is creating more partnerships with like-minded biotech industry associations, such as Life Sciences Ontario and the McGill University Health Centre. The plan is for different industry organizations to play more complementary roles, rather than compete or overlap with each other. This will add value to biotech SMEs that are members and patrons of our partners.

Furthermore, to provide added value in the form of practical products and information, in October, BioTalent Canada will be launching a new streamlined website that will focus on the business and HR needs of Canadian biotech companies.

Last, BioTalent Canada will be more actively engaged in exchanges with its audiences – job seekers, companies and other associations – via social media and other channels. We want to use the ongoing communication to continue to enhance our offering.

It’s an exciting but challenging time for BioTalent Canada and the industry. With this new approach, and together with our partners, I am confident that we will succeed helping the bio-economy to be a driver of the Canadian business market.

@

To learn more about BioTalent Canada’s programs and products, visit: www.biotalent.ca.

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