Biotechnology Focus September 2011 by Promotive Communications

INSIGHTS FOR THE LIFE SCIENCE INDUSTRY

SEPTEMBER 2011 VOLUME 14, NUMBER 8

HOT

BUTTON ISSUE

CAN CANADA BECOME A WORLD LEADER IN BIOTECH?

CANADIAN BIOTECH INSIDE:

THE PROMISE OF INNOVATION PROCUREMENT

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contents SEPTEMBER 2011 – VOLUME 14 – NUMBER 8

Opinion

The Galleria Building at Innovation Place in Saskatoon, SK (AWB photo)

FEATURES READERS RESPOND Readers respond and share their views on the industry’s strengths (Compiled by Shawn Lawrence)

15 The Promise of Innovation Procurement The Conference Board of Canada discusses its report on innovation procurement in health care and biotechnology (By Gabriela Prada)

National Biotech Week Biotechnology Focus goes one-on-one with BIOTECanada president and CEO (Compiled by Biotechnology Focus)

20 An Evolution is Underway

The results are in for our seventh Hot Button Issue Survey

Genomics as a building block of science and industry (By Pierre Meulien)

22 Saskatchewan Bioscience Capturing value from innovation (By Ag-West Bio)

DEPARTMENTS 6

Research news

Business corner

IN EVERY ISSUE

26 ACROSS CANADA

26 New Products 29 Calendar of events 30 The Last Word

RESEARCH NEWS

The Canadian biotechnology public policy agenda (By Jeffrey Graham, Chantal Saunders and Beverley Moore)

30 THE LAST WORD (By Brad Thompson)

Green light given for Phase 2 of the MaRS Centre (Photo provided by MaRS Discovery District) www.bioscienceworld.ca

SEPTEMBER 2011 BIOTECHNOLOGY FOCUS 3

PUBLISHER’S NOTE

PUBLISHER/ EDITOR-IN-CHIEF STAFF WRITERS

CONTRIBUTING WRITERS

Highlighting Canadian Success In the past, Biotechnology Focus has asked for your input, then put forth your concerns to government. Prior Hot Button Issues have brought to light what was wrong with the life sciences industry in Canada, but glancing at the headlines these days can send even the most stiff-lipped optimist running for cover; it’s hard to stay positive with far reaching economic uncertainty and general turmoil on a global scale. That’s why instead of focusing on the negative this issue of Biotechnology Focus centres the discussion on the positive aspects of the Canadian life sciences sector. We’ve asked the tough questions and you’ve responded in turn. On the cover, we asked if Canada can become a world leader in biotech and the answers can be found in our Hot Button survey. Canadian research, given the proper support can develop into a global force, especially given our ample infrastructure of publicly funded hospitals, university research institutes and centres of excellence. Canadians have lots to celebrate then during National Biotech Week (September 16 to 23), and this issue features a Q&A with BIOTECanada CEO Peter Brenders. Brenders talks about biotech as an industry full of success, and with a newly appointed majority government, the organization can begin long-term planning and strategies. But even with all the good news, finance is still worrisome for most biotech companies and Paul Karamanoukian, Ernst & Young’s Canadian life sciences industry leader shares his thoughts with how Canadian biotech industry players must return to business fundamentals among other strategies to capitalize on the opportunities out there. And looking over the month’s news headlines there are certainly opportunities: OICR will receive $420 million over the next five years, Genome BC is getting $25 million from the BC government, Roche will establish a global site for pharmaceutical development in Canada and MaRS is even beginning development of phase 2 of its expansion (doubling its size). As always, you don’t have to wait for our hot button surveys to let us know how you feel about Canada’s biotech industry, we always welcome your thoughts at biotechnology_focus@promotive.net.

Terri Pavelic Shawn Lawrence Christopher Rogers Brad Thompson

Gabriela Prada

Jeffrey Graham

Paul Karamanoukian

Pierre Meulien

Chantal Saunders

National Account Manager GRAPHIC DESIGNER CONTROLLER

Beverley Moore Patricia Bush Elena Pankova John R. Jones

MARKETING MANAGER

Mary Malofy

CIRCULATION DIRECTOR

James Zammit

circulation@promotive.net

EDITORIAL ADVISORY BOARD Najla Guthrie, KGK Synergize; Pierre Bourassa, IRAP, Montréal; Brad Guthrie, Alberta Advanced Education and Technology; Carol Reynolds, Genome Prairie; Ulli Krull, UTM; John Kelly, Erie Innovation and Commercialization; Peter Pekos, Dalton Pharma Services; Brad Thompson, Oncolytics; Darrell Ethell, CanReg; John Hylton, John H. Hylton & Associates; Robert Foldes, Mentis Partners; Colette Rivet, BioTalent; Grant Tipler, RBC; Randal R.Goodfellow, P.Ag., Senior Vice President, Corporate Relations, Ensyn; Bob H. Sotiriadis, LLB,a partner with Leger Robic Richard; Dale Patterson, Genome Canada; Darcy Pawlik, Syngenta Seeds Canada Inc; Gail Garland, OBIO; Barry Gee, LifeSciences British Columbia; 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 SEPTEMBER 2011

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R & D NEWS Ontario to provide $420m for cancer research

Dr. Tom Hudson

The Ontario Institute for Cancer Research (OICR) will receive $420 million over five years from the Government of Ontario to continue its research into the prevention, early detection, diagnosis and treatment of cancer. According to Dr. Tom Hudson, president and scientific director, the money will be used to support the Institute in fulfilling its second strategic plan for 2010 to 2015, which focuses on the

Genome BC receives $25 million investment from BC government The province of British Columbia is providing $25 million to Genome BC in support of its ongoing research in the areas of agriculture, forestry, fisheries, human health, bioenergy, mining and the environment. The funding from the Ministry of Health is already making a difference in the area of agriculture. Researchers are developing and applying powerful new genomics tools that can be used to help beekeepers stop the colony losses they incur every year. These losses are mostly due to beespecific infectious diseases and widespread resistance to chemical controls of these diseases is compounding the

6 BIOTECHNOLOGY FOCUS SEPTEMBER 2011

adoption of more personalized approaches to cancer diagnosis and treatment. OICR also said that it will occupy two floors of the recently announced Phase 2 expansion of the MaRS Centre, expanding its current laboratories and offices. OICR says the new expansion will include labs for genomics, informatics and pathology, and will be ready by mid 2013. New staff will be hired in 2013 when the building is ready, and additional projects will be announced at some point in the future. Dr. Hudson said the funding will also enable the Ontario Health Study to complete its recruitment plans. “Over the past five years OICR has networked top scientific talent from the province and recruited 35 international stars of the cancer research world, to meet the cancer challenge,” said Dr. Hudson. “We have one of the highest rates of patient enrolment in cancer clinical trials in North America. The trials, conducted in 23 adult and five paediatric cancer centres in Ontario, brings new cancer therapies to Ontario cancer patients sooner. With renewed funding we will continue this important work, ensuring the most promising cancer research in Ontario will be turned into new treatments and provide new hope for cancer patients worldwide.”

problem. Honeybees play a major role in agriculture production – not only as producers of honey, but as pollinators of crops. Genome BC will direct more than $2 million to support researchers who are developing new tools to identify disease-resistant honeybees and trying to understand the root causes of “Colony Collapse Disorder” in honey bees. Scientists believe it may be caused by a variety of compounding problems including new viruses, diseases and prolonged exposure to insecticides and herbicides. But one of the key factors is believed to be a virulent pest called the Varroa mite, which latches on to bees and their larvae and sucks blood out of them. The research by Leonard Foster at the University of BC will look at mapping the DNA of honey bees and isolating strains of the insect that are resistant to Varroa.

Clinical Trials & Patents Afexa Life Sciences Inc. (Edmonton, AB) announces promising results of a pilot clinical study investigating the effects of a new formulation, Dilexaponan™, a proprietary polymolecular formulation isolated from botanical sources and developed and standardized using ChemBioPrint technology. The open label and proof of concept study explored the safety and optimum dosing range for Dilexaponan in 39 patients with elevated total cholesterol levels. The study was led by principal investigator Dr. Richard Lewanczuk, professor, Endocrinology and Metabolism, University of Alberta, in collaboration with Dr. Jay Udani, assistant clinical professor, UCLA, CEO, Medicus Research LLC. The results, awaiting final peer review, demonstrated that patients taking Dilexaponan had favourable changes in multiple cholesterol measures. All Dilexaponan doses tested (0.333, 1, and 2 g/day) were equally effective in significantly reducing low-density lipoprotein (LDL) cholesterol after a two month treatment duration versus baseline (p<0.05). There were also significant and positive time-dependent decreases in the ratio of total cholesterol to highdensity lipoprotein (HDL) cholesterol, and ratio of LDL cholesterol to HDL cholesterol compared to baseline (p<0.05) for each dose tested. Dilexaponan was generally well tolerated. The trial received authorization from Health Canada and all required Health Research Ethics Board.

Helix BioPharma Corp. (Aurora, ON) has received approval from the Central Register of Clinical Trials at the Polish Ministry of Health of its European clinical trial application to perform the company’s planned Phase 1/2 clinical safety, tolerability and preliminary efficacy study of its lung cancer drug candidate, L-DOS47. L-DOS47 is Helix’s first drug candidate under development based upon the company’s novel DOS47 technology, which is designed to modify the microenvironmental conditions of cancer cells in a manner that leads to their destruction. L-DOS47 is an immunoconjugate-based drug candidate intended to offer an innovative approach to the first-line treatment of inoperable, locally advanced, recurrent or metastatic, non-small cell lung cancer. The company will now proceed with its remaining pre-study logistical preparations, with a view to commencing clinical site initiation and patient recruitment activities in the fall of this year. The company is planning to conduct the study at four Polish centers under the direction of Prof. Maciej Krzakowski, MD, PhD at The Maria SklodowskaCurie Memorial Cancer Centre & Institute of Oncology as the overall coordinating investigator, together with three other principal investigators: Prof. Cezary Szczylik, MD, PhD at the Military Medical Institute, Prof. Elzbieta Wiatr, MD, PhD at the National Tuberculosis and Lung Diseases Research Institute and Dr. Aleksandra Szczensa, MD, PhD at the Mazovian Center of Pulmonary Diseases and Tuberculosis in Otwock.

R & D NEWS Roche to establish a global site for pharmaceutical development in Canada Roche is plugging a Canadian biotech hub into its growing network of global R&D centres selecting Ontario as the site of its next big drug research complex. Roche’s plans include investing over $190 million over the next five years in the site, bringing 200 highly-skilled and specialized jobs to Mississauga, ON. The investment was made in partnership with Ontario’s Ministry of Economic Development and Trade, as part of the government’s plan to create jobs and strengthen local economies. “Roche Canada’s global development site provides an impressive model for what can be achieved in Ontario,” said Minister of Economic Development and Trade, Sandra Pupatello. “This project will continue to attract the best and brightest minds to our province, and will create a cascade of benefits in the scientific community providing opportunities for collaboration and contribution to the growth of the province’s knowledge-based economy.” Roche Canada was selected as a global development site, in part, because Ontario offers the environment necessary to support drug discovery and development, including an educated and capable workforce, and

Minister Sandra Pupatello, Bob Delaney MPP, and Ronnie Miller Roche CEO get the attention of media representatives

a favourable business environment supported by a government that places a high strategic priority on life sciences. “As a leader in research and development, and biotechnology, we are extremely pleased to bring global Pharmaceutical Development opportunities to Ontario,” said Ronnie Miller, president and CEO of Roche Canada. “We have built a respected clinical expertise within the Roche global network, and this new capability will firmly establish Roche Canada, and the province of Ontario, as a global hub for life sciences and biopharmaceuticals. Above all, we are excited

about the promise this holds for patients in Canada and around the world.” Over the next five years, study management leadership positions such as global trial and data management will be brought to Roche Canada’s Pharmaceutical Development site. Individuals at the pharmaceutical development site, one of six in the world, will manage operations for all stages of global clinical trial research. The first positions have been filled. It is expected that renovations to house the global site will begin, and several more positions will be filled later this fall. The roles will include Global Study Management, Global Data Management and Product Development Regulatory, which means that Canada will provide global leadership and coordination for clinical development that will take place through its substantial affiliate R&D network conducting clinical trials in more than 60 countries.

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SEPTEMBER 2011 BIOTECHNOLOGY FOCUS 7

R & D NEWS Phase 2 of MaRS development finally underway The Government of Ontario is helping MaRS expand to more than double its size, making it the largest urban innovation hub in the world. MaRS is partnering with the Province of Ontario and continuing its strategic relationship with developer Alexandria to complete the 20-storey state-of-theart convergence centre. To finance the project, Infrastructure Ontario is providing a fully repayable loan of $230.3 million to MaRS, which, with investments by MaRS and the existing investment of Alexandria, will enable MaRS to complete the project. MaRS Centre Phase 2 will be developed and operated by MaRS and has an anticipated completion date of September 2013. MaRS Centre Phase 2, directly adjacent to the existing facility, will increase the size of the facility to over 1.5 million sq. ft. Two prominent tenants have already committed to leasing space in the new building. The Ontario Institute for Cancer Research, with its exceptional translational cancer research and commercialization programs, presently in the south tower, will expand into MaRS Centre Phase 2. Public Health Ontario, a central player in public health research and

policy and in infectious diseases management, will anchor its provincial network in MaRS Centre Phase 2. Ilse Treurnicht, CEO of MaRS Discovery District, said the timing was right to give the go-ahead on resuming construction on the Centre especially with the current MaRS Centre at full occupancy. “In 2008, the global economic crisis halted many building projects here and elsewhere. One of these was the MaRS Centre Phase 2 building. We were disappointed by the delay, but our core business was zooming along

Dr. Jane Aubin

CIHR appoints new chief scientific officer and VP of research The Canadian Institutes of Health Research (CIHR) has announced the appointment of Dr. Jane Aubin to the position of chief scientific officer/vicepresident, research. As chief scientific officer, Dr Aubin will assume responsibility for the oversight of all scientific affairs at CIHR and will provide CIHR with expert advice on matters relevant to science and technology, potential opportunities and emerging orientations and trends in the national and international health research community. As vice-president, research, she will also be responsible for all aspects of adjudication of grants and awards at CIHR and finally, as a member of the scientific council, she will participate in the develop-

8 BIOTECHNOLOGY FOCUS SEPTEMBER 2011

ment, implementation, and reporting on CIHR’s research and knowledge translation strategy. Dr Aubin’s career path has included several senior academic administrative positions, including chair of the Graduate Department of Dentistry and director of postgraduate dental education and chair of the Department of Anatomy and Cell Biology at the University of Toronto. She is currently a member of the Faculty of Medicine at the University of Toronto where she is a professor of molecular genetics and the director of the bone program in the Centre for Modeling Human Disease. Other past roles include scientific director and CEO of the Canadian Arthritis Network of Centres of Excellence and scientific director of CIHR’s Institute of Musculoskeletal Health and Arthritis (IMHA).

regardless. Now, I’m absolutely delighted that construction of Phase 2 is restarting. It signals a new era for innovation in Toronto, Ontario, and Canada,” she said. Minister of Research and Innovation and MPP for Toronto Centre Glen Murray echoed those statements adding “Ontario is proud to help meet the demand for stateof-the-art space that will help bring these projects to life.” Public Health Ontario president Dr. Vivek Goel commented that Public Health Ontario is thrilled to be a part of the MaRS Centre Phase 2 development. “As a hub organization dedicated to protecting and promoting the health of all Ontarians, renewal and advancement of our laboratories is essential for Ontario’s continued response to emerging public health threats. Location of our laboratories at MaRS will enhance academic, healthcare and private sector partnerships,” he said. Today more than 2,300 researchers, innovators, entrepreneurs and professionals representing more than 80 tenants work at MaRS.

BioTalent Canada welcomes new executive director BioTalent Canada, Canada’s bio-economy HR hub, announces the arrival of its new executive director, Robert Henderson. Henderson possesses almost 20 years of senior management experience in the private and public sector. A former vice-president, Eastern Canada for Canada NewsWire, he also served as executive director for several non-profit associations, including the Canadian Dental Assistants’ Association and the Canadian Association of Journalists. Fully bilingual and a Quebec native, Henderson graduated with an Honours BSc in Biology from the University of Ottawa. As executive director, he will be responsible for all projects and operations of BioTalent Canada under the board of directors. “We’re pleased to see BioTalent Canada enter this next phase of its growth under this new leadership,” said BioTalent Board chair Bob Ingratta. “We feel that we are well-equipped to continue to assist Canada’s bio-economy face its human resource opportunities and help Canada take a leadership role in capturing and retaining the crucial industry expertise our country needs.”

BUSINESS CORNER Atrium Innovations closes $75,000,000 public offering of convertible debentures Atrium Innovations Inc. confirmed the closing of its previously announced bought deal public offering of $75,000,000 aggregate principal amount of 5.75 per cent convertible unsecured subordinated debentures, due August 31, 2018 at a price of $1,000 per debenture. Each Debenture will be convertible at the holder’s option into common shares of Atrium at a conversion price of $24.60 per Share subject to adjustments in cer-

tain circumstances. Atrium has granted the underwriters an over-allotment option, exercisable in whole or in part at any time up to 30 days following closing, pursuant to which the underwriters may purchase up to an additional $11,250,000 principal amount of Debentures, on the same terms. Atrium also announced that its previously announced private placement of $25,000,000 aggregate principal amount of debentures with the Fonds de Solidarité FTQ was closed on the same terms as the public offering, except that debentures sold under the concurrent private placement will be

subject to a four-month hold period. All of the net proceeds from the Public Offering and the Concurrent Private Placement will be used to reduce Atrium’s outstanding indebtedness, including to fully reimburse the subordinated debt held by FTQ for a principal amount of $13,407,000. The Public Offering was underwritten by a syndicate co-led by TD Securities Inc., National Bank Financial Inc. and RBC Capital Markets and included BMO Capital Markets Inc., Desjardins Securities Inc., GMP Securities LP, HSBC Securities (Canada) Inc., Scotia Capital Inc. and Canaccord Genuity Corp.

Warnex Inc. is reorganizing the operations of its subsidiary, Warnex Analytical Services Inc., shutting down the operations of its analytical laboratories located in Laval, QC. The company also said it was consolidating all of its analytical services at its Neopharm Laboratories facility located in Blainville, QC. “This reorganization reflects our strategy to continually improve efficiency and re-

duce costs in our operations. This change will provide us with estimated annualized cost savings of approximately $1 million,” said Mark Busgang, president and CEO of Warnex. Warnex’s facilities located in Blainville, QC occupy 28,000 square feet and are fully cGMP compliant. Warnex’s Bioanalytical Services and Medical Laboratories divisions,

Paladin CEO Jonathan Goodman

Paladin to buy biotech Labopharm in $20 million deal Canadian biotech company Labopharm Inc has agreed to be bought by Paladin Labs Inc., ending a months-long search for a suitor. Paladin said it would pay 28.57 Canadian cents a share in cash for Labopharm, valuing the company at about C$20 million ($20.4 million). “The board of directors has concluded that this all-cash offer, which is at a significant premium to the trading price of Labopharm’s shares, is the best way to maximize shareholder value,” Labopharm chairman Santo J. Costa said in a statement. Labopharm has struggled in recent months and was forced to delist its common shares from the Nasdaq in June after failing to maintain a minimum bid price of $1 a share and a market value of listed securities of $50 million. In March, it replaced its chief executive, cut its work force and said it was in the market to explore strategic options. “The offer from Paladin provides compelling value, certainty and liquidity to our shareholders,” Costa said.

Mark Busgang

Warnex reorganizes its analytical services subsidiary

as well as its head office, will continue to operate at its Laval facilities.

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Industry

BUSINESS CORNER Cytochroma announces $1 million investment by Ontario’s Investment Accelerator Fund Cytochroma has closed an equity investment of $1 million from the Investment Accelerator Fund, a fund of the Province of Ontario that invests in emerging Ontario technology companies. The investment is designed to advance and accelerate the company’s development of CTAP101 Capsules, a product currently in a Phase 2b study for the treatment of secondary hyperparathyroidism associated with vitamin D insufficiency in patients with non-dialysis chronic kidney disease. “Cytochroma demonstrates great potential to develop and commercialize new treatments to global health problems and create new jobs for Ontario families,” said Michael Chan, Member of Provincial Parliament, Markham-Unionville. “We’re proud to help tomorrow’s industry leaders get their start today here in Markham.” “Cytochroma is grateful for the support of the Investment Accelerator Fund, MaRS, and the Province of Ontario,” said Dr. Charles W. Bishop, president and CEO.

DVS Sciences Inc. raises more than $14 million with Series A financing The Ontario Institute for Cancer Research (OICR) and DVS Sciences Inc. announce that DVS Sciences has completed a $14.6 million Series A financing. DVS, a Toronto-based spinoff from the University of Toronto, invented and manufactures pioneering instrumentation that enables paradigm-shifting biological research with potential clinical applications that include personalized medicine. The company was an early recipient of seed funding from OICR, which is an independent, not-for-profit corporation established by the McGuinty government in 2005. The Series A financing was led by 5AM Ventures. Additional investors included Mohr Davidow Ventures (MDV), Pfizer Venture Investments (PVI) and Roche Finance Ltd. “With early seed financing provided by OICR, and support from its Entrepreneur in Residence program, DVS Sciences is a perfect example of our mission to generate faster translation of scientific research into cancer patient care, while supporting Ontario-based health care companies in a challenging economic environment,” said Frank Stonebanks, OICR’s Chief Commercial Officer. “Most importantly, this first round of financing -- the largest venturebacked Series A equity raised in Canada’s life sciences and medical technology fields

in recent years, and almost twice the average Series A funding in the U.S. -- will help accelerate commercialization of the revolutionary CyTOF™ analytical instrument pioneered by DVS Sciences, which promises to greatly enhance cancer research, screening and treatment.” The financing will allow DVS Sciences to create state-of-the art manufacturing facilities in Ontario, establish a distribution network and increase global sales of CyTOF. The instrument, conceptually similar to a flow cytometer, enables highly multiplexed biomarker analysis for scientific research, clinical trials and personalized medicine. The DVS system uses stable isotope tags to identify up to 100 biomarkers at a time with very high resolution and wide dynamic range, whereas a flow cytometer uses fluorescent tags, which limit the multiplex capacity due to spectral overlap. The CyTOF has been demonstrated to analyze 34 biomarkers simultaneously in single human leukemia cells at a rate of 1,000 cells per second with absolute signal quantification. Several CyTOF instruments have been sold to leading laboratories in Canada, the U.S.A. and Asia. DVS Sciences Inc. has also developed a proprietary line of reagents called MAXPAR™ for use with the CyTOF instrument platform.

Dealmakers Intellipharmaceutics International Inc. (Edmonton, AB) and Par Pharmaceutical, Inc. (Woodcliff Lake, NJ) have added the development and commercializationof additional strengths of generic Focalin XR® (dexmethylphenidate hydrochloride) for the U.S. market to their existing agreement, which applied to the development and commercialization of the 5, 10, 15 and 20mg strengths of generic Focalin XR. Under the terms of the expanded agreement, Intellipharmaceutics will receive an immediate cash payment from Par and will continue to receive a share of profits from future sales. According to Wolters Kluwer Health, U.S. sales of Focalin XR, used in the treatment of Attention Deficit Hyperactivity Disorder, were approximately US$536 million for the 12 months n

10 BIOTECHNOLOGY FOCUS SEPTEMBER 2011

ending June 2011. Five strengths (5, 10, 15, 20 and 30mg) of a generic version of Focalin XR are currently the subject of Intellipharmaceutics’ pending Abbreviated New Drug Application (ANDA) with the FDA. Intellipharmaceutics and Par are parties to a settlement of their earlier U.S. litigation against Novartis Pharmaceuticals Corporation, Elan Pharma International Ltd., and Celgene Corp. with respect to the 5, 10, 15, and 20mg products, the terms of which are confidential. Intellipharmaceutics and Par are currently defendants in on-going U.S. litigation against the same plaintiffs as regards the 30 mg product. Performance Plants Inc. (Kingston, ON) has entered into a commercial licensing agreement in corn and a four-year R&D collaborative

licensing agreement in rice and soybean with a leading Chinese agricultural company Beijing Dabeinong Technology Group Co., Ltd (DBN). Through this agreement, DBN becomes the exclusive user for PPI’s drought tolerance and yield protection technology® (YPT®), heat and drought tolerance technology (HDT™), water efficiency technology™ (WET™) and yield enhancement technology (YET™) technologies in corn in China and also has non exclusive rights for those technologies in soybean and HDT™, WET™ and YET™ in rice in the country. In exchange for the access to PPI’s trait technologies for research and product development in China, PPI will obtain upfront and milestone payments as well as royalty revenues from DBN from future seed sales and sublicensing activities.

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Compiled by Shawn Lawrence

Canadian Life Science

We asked

and You answered!

This marks our seventh Hot Button Issue and you might have noticed it looks somewhat different than past editions. For starters, in tallying your responses we wanted to keep it short and simple but more importantly we wanted to focus on the success stories in Canadian biotech. In our last hot-button survey story (March 2011), one message that caught our attention was that biotech needed to do a better job of selling itself, to dangle a few carrots at government rather than simply hounding government with its problems. As such, we placed less emphasis on the challenges the industry and the sector is facing. We found this approach to be more in line with the ideals of National Biotechnology Week. That’s not to say we didn’t include your concerns about the state of Canada’s biotech and life science sector or which areas needed improvement, but rather we focused on telling government why Canada needs to do a better job at supporting the industry. We broke our survey answers down into two different categories. In the first category, we lumped drug discovery, therapeutics, biomedical, and devices together under health sciences. In category two we combined agriculture, food, bioindustrial and environment as one.

12 BIOTECHNOLOGY FOCUS SEPTEMBER 2011

Here’s what you, our readers, had to say: Drug Discovery, Therapeutics, Biomedical and Devices Canada has world class facilities and personnel but the first question we asked was is Canada a world leader in your field of specialty? Despite approximately 72 per cent of respondents believing Canada is not a world leader in their field, a further 76 per cent believed Canada could, given the right support, be that leader. The majority of respondents said with the right financial support, a kinder investment climate and better business practices in general, Canada could be a global leader in their particular area of expertise. Our readers also indicated that the biotech industry was benefitting from powerful partnerships and collaborations between universities and industry. These relationships are strengthened by government research

dollars. Canada has a rich infrastructure of publicly funded hospitals, university research institutes, a network of Centres of Excellence and government laboratories which provide a strong and vibrant R&D base, and industry is starting to take advantage of these facilities. At the same time, industry is still in a state of neglect and Canada needs more progressive financing to make up for the lack of venture capital programs for Canadian biotech enterprises.

Canadian Life Science Many readers chose to focus on the areas of great success for Canada such as genomics, regenerative medicine and personalized medicine. Most agreed that Canadians are world leaders in these fields, boasting some of the world’s most prominent scientists. For example, the tissue culture media used to grow human embryonic and induced pluripotent stems cells that is currently made in Canada is considered the gold standard. In terms of regenerative medicine specifically, Canada has the infrastructure and scientific expertise as well as much of the medical expertise already in place to be a world leader. While on the industry side, companies like Stem Cell Therapeutics Corp and Stem Cell Technologies have assembled some of the most influential people in Canada to convert excellent research into products. The recent establishment of the Centre for Commercialization of Regenerative Medicine should go a long way to confirming that Canada is serious about getting into the business of regenerative medicine. As one reader pointed out, Genomics is gaining notoriety as a “critical element in the Canadian bio-economy and an essential aspect of our biotechnological prowess.” Canada is home to large-scale research and development projects in genomics that impact the life sciences. Moreover, the efforts of Canada’s national genomics organization, Genome Canada, has led to the creation of 20 companies since 2000. Our readers agreed there is a need to continue to focus on the areas of genomics, personalized medicine and regenerative medicine because they have the greatest potential to reduce overall medical costs and improve the quality of life for patients, not to mention the potential creation of jobs. Bioinformatics was another area our readers highlighted as a Canadian strength. In terms of bioinformatics and cheminformatics practitioners, serious inroads are being made in data management with the advancement of the Semantic Web and its relation to drug discovery. The Semantic Web (also known as the web of data) is a set of technologies used to make data available in a universally accessible format. This has become particularly popular in academia. On the disease front, cancer remains a focal point and the need has never been greater. Diabetes, obesity and brain disease research are all also considered our strengths. There’s also great work being done in antiviral drug vaccines. Related to our strengths in therapeutics’, Canada has numerous success stories in the development of diagnostic tools. Listing these successes reveals a telling

fact, most of the success Canada is enjoying is happening at the academic level, it was a concern echoed by many of our respondents. While Canada is getting better at commercializing research and technology transfer (i.e. the development of commercialization entities such as MaRS Innovation, as well as the establishment of Centres of Excellence of Commercialization and Research such as the Centre for Drug Research and Development), more can still be done. The Science, Technology and Innovation Council’s recently released the State of the Nation 2010 report shows that research and development performed by business in Canada is low by International standards. Many of readers felt this low ranking is due to several public policies related to commercialization of research that act as barriers to successfully transforming research into new innovative products. Essentially, Government understands how to support research but fails in understanding development. From an industry perspective, Government needs to know the role industry can play in creating jobs and value for our society. Industry champions favourable policies that will bring venture capital back to the table as well as policies that will encourage foreign subsidiaries to establish research and manufacturing centres in Canada. Moreover, because of the long product cycles and high costs of bringing new drugs and therapeutics to market (in many cases due to government regulations Health Canada, FDA, etc.), there is a definite need for more business friendly policies focused on manufacturing and the exportation of finished products. From both an industry and academic perspective, patent protection is the most critical of all public policies, as intellectual property is the primary asset of any innovative company or scientist. Canada must ensure that it is home to a national patent protection regime that is equally as strong as those of our trading partners. David Allan, currently a member of BIOTECanada’s Emerging Companies Advisory Board and former CEO of Canadian biotech YM Biosciences has long pushed for improvements to policies relative to biotech and the life sciences. He also emphasizes

On the disease front, cancer remains a focal point and the need has never been greater. Diabetes, obesity and brain disease research are all also considered our strengths. that it’s more than just funds that the industry is after. He’s also questioned why there is so much red tape to implement homegrown technologies. Loosely translated, would it not make more sense to use made in Canada products as opposed to importing them? “For as long as Canada avoids public policies to foster and promote the ‘demand side’ for scientific discoveries (i.e. development), then the ‘supply side’ (basic research Canada invests huge amounts in) will be seeds thrown into a desert. Development of basic research is quantifiably a huge economic driver, providing return on the investment already made by taxpayers in basic research (currently very close to zero return); providing jobs for graduates whose education taxpayers have paid for, focusing on developing manufacturing and exports of drugs and devices and replacing imports with home grown products, should be our priority,” he said. Our readers were quick to add the tax system is good with programs such as Scientific Research and Experimental Development Program (SR&ED), but they are still waiting on some sort of government response on flow-through-shares, or something similar to the flow-through-shares model used in the energy and mining sectors to raise funds for exploration. Industry knows that flow through shares have the potential to give biotech investors the same juicy tax breaks and opportunities for lucrative returns that they have given investors in the energy and mining industries, it’s a message that they hope one day gets through to government. In addition of calls to fine tune policy, many readers discussed the importance of promoting our success stories through a coordinated effort to reach the public in a more meaningful way. As one respondent explained, “We need to speak more about our successes, they need to be profiled more. People must understand SEPTEMBER 2011 BIOTECHNOLOGY FOCUS 13

Canadian Life Science

In both Agriculture and food, genomics has played a significant role in the production of disease-free planting material, and assistance to genetic improvement. why research costs so much, to temper expectations and at the same time, what the benefits of biotech are.” Jan-Eric Ahlfors, president and CSO New World Laboroties Inc. went a step further with his answer: “The public needs to be aware of what biotech and life sciences has achieved so far (directly and indirectly) and what it could achieve in the future. The public needs to feel that these social and economic benefits are greater than the costs involved. The public also needs to be aware that Canada has not reaped most of the economic benefits due to inadequate financial support of mid-stage biotech companies and inadequate policies and incentives for latestage biotech companies, causing most of the promising and successful companies to be sold or moving out of Canada.”

Agriculture, Food, Environment and Industrial Canada’s greatest strengths in non-health biotechnology are in forestry, aquatic sciences, environmental and animal sciences. We have a strong international reputation especially in the areas of agricultural, food, environment and industrial biotechnology. Our readers were somewhat divided in their opinions as to whether we are global leaders in these fields but the consensus is good things are happening in terms of agriculture, food, environment and industrial biotechnology and it’s all tied to genomics. In both Agriculture and food, genomics has played a significant role in the production of disease-free planting material, and assistance to genetic improvement. Specifically, our scientists and biotech companies have created drought-resistant crops, vaccines against food-borne pathogens, healthier fruit, and advanced animal production techniques and we are at the forefront in developing new crops to supply food, fuel and industrial feedstocks. We were also 14 BIOTECHNOLOGY FOCUS SEPTEMBER 2011

the first country even to grow biotech crops. Moreover, Canadian farmers have led the world in the adoption of many environmentally-friendly crops that reduce pesticide use and boost yields while biotechnology crop coverage in Canada covers 17 million acres. Thanks to genomics, Canadian biotechnology has also made significant contributions to food safety, specifically in addressing microbial hazards, removing additives such as sodium and replacing with more nutritious substitutes. On the bioindustrial side and still relative to ag-bio we are beginning to see the commercialization of hybrid chemistry and newer generation biofuels from Biomass, particularly cellulosic or lingo-cellulosic matter, which is available on a renewable or recurring basis, including trees and forestry feedstock. While Canada’s genomic strengths has propelled it to its high standing in each of these fields, there is concern that it is losing its place as a leader. Generally, as is the case with health sciences, there is a lack of capital to sustain the industry. Several of our readers even commented that convincing funding agencies to get out of the therapeutic only perspective has been difficult, as well as getting them to recognize the importance of these biotechnology sub-sectors. Readers were also concerned about how each of these sub-sectors have, at times, come under public scrutiny due to misinformation that seems to spread too easily. This is complicated at the public research level by interference from government on science dissemination, in addition to the private sec-

tor being guarded with its own proprietary inventions and technology. “We know we need to educate the media so that biotech reporting is accurate and interesting but in many cases government scientists are restricted by current government communications policies. These policies add delays that reduce our presence in media with subsequent negative impact on public awareness,” stated one reader who identified themself ironically as a government scientist. When asked what they wanted from government, respondents didn’t ask for cash or funds, but improvement to the way these sectors of biotech are regulated, “It’s a case of Federal regulators will say one thing and provincial regulators will say another and these multiple levels of regulation increase our costs and stifle innovation.”

The Big Picture Financial gain or loss is always a powerful message to bring to the public and Canada’s biotech industry certainly has a story to tell in both regards. The responses from Biotechnology Focus’ latest survey confirm Canada has the potential to be a world leader; the conclusion, biotech needs to do a better job conveying this message.

For more Hot Button Issue Survey information visit our Best Practices Web Portal at www.bioscienceworld.ca

By: Gabriela Prada

BEST PRACTICES

The Promise of Innovation Procurement to Canada’s Health Care and Biotechnology Sectors

he sustainability of Canada’s health care depends in large part on innovations that can enhance the efficiency, safety, quality, and productivity of health and healthcare services. Biotechnology advances in life sciences offer great promises in this regard. New knowledge and applications in this area are already supporting the production of cheaper and safer drugs and the development of replacement tissues and organs to treat diseases that severely limit the lives of Canadians and impose a high economic burden to our health care system. Moreover, biotechnology is also facilitating a shift towards personalized and preventative medicine, which no doubt will have a great impact on the future burden of disease in Canada. However, the ability of these innovative treatments and products to improve the health care system and the quality of life of Canadians is directly related to the ability of our health care system to appropriately and timely integrate them into health care services. Therefore, Procurement— what governments and public institutions buy and how they buy it—can be a powerful tool for driving the development and adoption of innovative biotechnology products and processes. Despite its importance, our recent report, Innovation Procurement in Health Care: A Compelling Opportunity for Canada, suggests that concepts of innovation and procurement are still poorly connected in Canada. Recent policy papers have highlighted the need for greater innovation at the federal and provincial levels, but the use of the purchasing power of governments has not been emphasized in documents aiming to guide and coordinate health innovation policy or practices.

What is innovation procurement? Innovation procurement involves the development of innovations and/or purchasing of existing innovative products or services to improve the performance and functionality of public services and to solve important socio-economic challenges.1 Leading OECD countries are increasingly using innovation procurement in three key roles in boosting innovation:2,3 • Public procurement of R&D (or pre-commercial procurement): used when there is a perceived need without a commercially available solution. In these cases, procurement becomes a R&D service contract that involves exploration, feasibility, prototyping and commercialization. • Innovative procurement: used to specify a requirement that cannot be met by an off-theshelf solution but it can be developed within a reasonable period of time. It stimulates innovative private procurement by catalysing private demand. • Procurement of innovation: used when an innovative product already exists but is not widely SEPTEMBER 2011 BIOTECHNOLOGY FOCUS 15

[Light Blue boxes, small arrows pointing upwards] Business Investments in R&D Quality of Services Economic Activity [bottom light green oval] Health System Performance and Country Competitiveness

Best Practices Source: The Conference Board of Canada

Figure 1: Innovation Procurement as a Driver of Health System Performance

Procurement Processes

Source: The Conference Board of Canada

•There is a need but no commercially available solution •Need to enhance supply relationships to rapidly exploit innovations •Need to remove barriers for adoption and diffusion of existing innovative products

adopted, driving a need to establish processes to speed up adoption and diffusion. Through these roles, innovation procurement can improve quality of services and enhance health care system performance while increasing business investments in R&D and economic activity, which drive Canada’s competitiveness. In the U.K., innovation procurement has resulted in significant transformations to the health care system that are driving major improvements. Implementation of the innovation procurement strategy in this country has led to new accountability frameworks and governance structures and the creation of new government divisions and organizations mandated to support the development and uptake of innovative health technologies. The analysis of the successes to date

⁭ Business Investments in R&D

↑ Quality of Services

↑Economic Activity

↑ Country Competitiveness and Health System Performance

revealed that spurring innovation is costeffective and practical and can have a meaningful impact in a relatively short period of time, not only on people’s lives and health care but also on businesses and economic competitiveness. This strongly supports the argument that health care can add to our country’s growth rather than simply eating into our available tax revenue.

Innovation and innovation procurement in Canada’s health care: What do healthcare executives think? In Canada, however, innovation procurement has yet to be embraced as an effective innovation policy tool. Although there have been some recent discussions to modernize procurement in Canada, innovation and procurement are mostly still disconnected. Part

of the reason might be a limited understanding of innovation procurement processes and practices and their potential to advance health and healthcare in Canada. To assess this, a survey was launched among health care executives in Canada. Canadian health administrators, like their counterparts in many leading countries, recognize that innovation is fundamental to the improvement and sustainability of the health-care system, but Canada has been relatively slow to integrate innovation policies and strategies. The survey results illustrate this disconnect. Respondents were almost unanimous in agreeing that innovation is essential for improving organizational performance in the health sector and for the sustainability of Canada’s health-care system. They were much less likely to say that innovation is a recognized priority within their organizations or to see procurement as a lever for innovation. Strikingly, although 60 per cent of respondents agreed that innovative products and services were very important or important in achieving their organizations’goals, over half said that procurement approaches in their organization do not support the development and uptake of innovative products and services.

Where do we go from here? The Canadian division of responsibilities between the federal and provincial/territorial governments makes implementation of the U.K.’s top-down approach to driving change more difficult. However, Canadian efforts over the past decade to revamp primary care demonstrate that it is possible for jurisdictions to work together, and the key lessons from the U.K.’s experience with innovation procurement could be adapted to the Canadian context. The U.K.’s successes suggest the potential for action in Canada on four fronts:

Table 1: Perceptions of the Importance of Innovation hybridized with the four MAQC samples (number of respondents) Average Rating

Strongly agree

Agree

Neutral

Disagree

Innovation is essential for the sustainability of Canada’s health care system

4.6

Innovation is essential for improving my organizations performance

4.5

I believe that our procurement policy could support Canada’s goal of becoming a world leader in health innovation

3.6

8.0

Note: *Respondents were asked to rate statements on a scale of 1 to 5, where 1=strongly disagree amnd 5=strongly agree Source: The Conference Board of Canada. 16 BIOTECHNOLOGY FOCUS SEPTEMBER 2011

Federal leadership: The expiry of the current federal/provincial/territorial health transfer agreement in 2014 provides an opportunity for the federal government to ensure that the next agreement is structured to encourage innovation. In addition, as seen in the U.K., a central department overseeing progress and being accountable for results would also be fundamental to advancing health innovation in Canada. A National Health Innovation Office could be created for this purpose.

Targeted funding: As always, what gets rewarded will get done. New approaches to procurement aimed at driving innovation in health care will require new funding up front to encourage greater risk taking, to shift the focus of procurement to value generation, and to invest in the development of the skills needed to manage a more innovative process. Governments also should consider the use of competitive funding mechanisms that would reward those who lead the way in achieving key health outcomes. In addition, a Health Innovation Fund, which has successfully stimulated competition to address important healthcare challenges in the U.K. (e.g., Design Bugs Out to address hospital-acquired infections) and other countries, could be contemplated.

regional health funding to the achievement of innovation goals, governments could quickly drive the kind of progress that has been seen in the U.K. over the past decade.

Culture and attitudes: Funding arrangements can provide important incentives, but the survey responses in this study suggest the need for a more fundamental shift in the culture of Canadian health care. A more innovative and entrepreneurial culture would drive a higher-quality and more costeffective health-care system and could make the health-care sector a key factor in building a more competitive Canadian economy. Changing the culture of individual organizations and the health-care system as a whole will not be easy and will require sustained effort at all levels, but the U.K. experience suggests that significant progress can be made quickly and that the payoff for all Canadians could be substantial.

Conclusion

Innovation through procurement offers a compelling opportunity for Canada to generate better value for public health-care spending. To capture this opportunity, Canadian governments must make stronger efforts to identify health innovation goals; help healthcare administrators and professionals understand their crucial role in driving innovation Regional implementation: While through procurement; shift the emphasis in there is a need for a coordinated federal procurement practices from cost reduction to and provincial/territorial policy frame- value creation; and ensure that administrawork for innovation procurement, the U.K. tors and professional staff have the tools and experience suggests the need for a strong re- knowledge necessary to support this shift. As resources become scarce and demand gional focus. Governments should give health regions an explicit mandate as health-care for health services continues to increase, innovators and should support the develop- health care has no other choice but to AxSourceMagAd_FINAL__ 11:33 AM Page focus on 1products and services that bring ment of regional innovation 02/08/2011 hubs. By tying

Best Practices increased return on investments. This can be achieved through innovation growth. And while it is difficult to innovate in tough economic times, long-term sustainability and growth should be a priority. A shift in procurement practices from emphasis on cost control to value generation is required to enhance healthcare system sustainability. But this shift can’t be made without changing how procurement processes are viewed, designed, and implemented. The innovation procurement mindset should be encouraged at all levels (organization-wide and systemwide) in order to become more strategic and tightly integrated with other innovation efforts. These efforts would not only boost the flourishing Canadian biotechnology sector, but would improve our health and health care services and the health of Canadians.

References 1. EU Project OMC-PTP, Exploring Public Procurement as a Strategic Innovation Policy Mix Instrument (2009). www.innovation. lv/ino2/publications/Publicprocur.pdf. 2. Fraunhofer Institute, Innovation and Public Procurement, 8. 3. Department of Health, National Innovation Procurement Plan, pg 6. http:// www.dh.gov.uk/prod_consum_dh/ groups/dh_digitalassets/@dh/@ en/@ps/@sta/@perf/documents/ digitalasset/dh_110178.pdf

For more Best Practices information visit our Commercialization Web Portal at www.bioscienceworld.ca

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National Biotech Week

Q&A

with Peter Brenders

With National Biotech Week preparations underway, Biotechnology Focus sat down with BIOTECanada president and CEO Peter Brenders on the eve of the event to get a feel of the current state of the industry. Biotechnology Focus: There is talk that the industry is rebounding, David Schechner of Cannacord Genuity even speculated at the most recent BioFinance (held in Toronto in May) that we are on the verge of another biotech bubble. What are you hearing from your members, are we out of the woods, what’s the buzz in Canadian Biotech? Peter Brenders: The industry is full of successes, from exciting new developments in stem cell research to new composite manufacturing; from environmental technologies to new vaccines. There are plenty of areas to watch. As we look to the next generation of economic growth within our industry we continue to seek opportunities to catalyze new technologies into the commercialization cycle as a solution for the challenges faced by traditional industries. This includes new manufacturing processes for the automotive and chemistry industries, environmental solutions for the forestry and resource industries, new sources of renewable energy, and successful innovative vaccine and health therapeutics meeting increased health care demands. BF: We now have a majority Conservative government, and the importance of lobbying for the betterment of life sciences and biotech is as important as ever. What are some of the key hot button issues that BIOTECanada is lobbying for and when do you think we’ll start to see some action on this new government’s part in aiding our industry? PB: The arrival of a majority government offers the association the opportunity for long-term planning and engagement on strategic initiatives as we seek to secure our policy goals. We will be able to focus attention on key political leaders throughout the government caucus as they settle into their respective roles and establish champions able and willing to engage on issues on our 18 BIOTECHNOLOGY FOCUS SEPTEMBER 2011

behalf. This level of stability will be a refreshing environment for all stakeholders. With the number of new MPs we will be using this opportunity to showcase an overview of biotech excellence, and from this briefing we will break into one-on-one meetings between our member CEOs, federal MPs and government officials. We will continue to drive sustainable commercial development mostly in terms of capital formation and improved operating environment. The Conservative’s made a promise to take action on the findings of the Research and Development Review Panel commissioned in October 2010 and we look forward to the findings from the Research and Development Panel set to report in October, 2011.

BF: Turning our attention to National Biotech Week, what are the major themes of this year’s event and highlights our readers should take note of? PB: Now in its eighth year, National Biotechnology Week (September 16 to 23) is a celebration of ‘imagenenation’ by Canada’s biotechnology scientists, researchers and entrepreneurs. National Biotechnology Week will kick off this year on Friday September 16 at the grand opening of the Vaccine and Infectious Disease Organization in Saskatoon. The International Vaccine Centre is Canada’s newest lab for protecting animals and humans against emerging infectious diseases. When doors officially open in September, the new $140 million InterVac facility will be Canada’s largest containment level 3 agricultural facility and the most advanced of its kind in the world. National Biotechnology Week is filled with exciting events, lectures, facility tours and hands-on science experiments happening on a daily basis across the entire country. The week, produced in coordination with BIOTECanada and its national organization partners include events for everyone. Popular events include student competitions, facility and company tours; meet the experts and leader

events and provincial government recognition of the week. To find out more, your readers need only visit our National Biotechnology Week website at www.imagenenation.ca The message we want to get out to the public is that the Canadian bio-economy continues to drive economic growth and value into our daily lives. Canada’s bio-economy represents $86.5 billion or seven per cent of our national GDP. Moreover, the bio-economy has grown more than 60 per cent since 2000, representing a growth rate that is double to that of the broader economy. Today, Canada’s bio-economy has an employment network of more than one million. Canada’s biotech industry is broadly distributed, with applications in health and therapeutics (44 per cent), industrial and environmental technologies (28 per cent), and innovative bio-products in the agriculture space (25 per cent) and other areas (three per cent). The term bio-economy refers to the application of biotechnology processes, products and tools to create new methods of manufacturing and developing consumer products and services. The three primary components of Canada’s bio-based economy are health, industrial processes and agriculture. We encounter biorelated technology everyday. From a car seat made from soybean foam to the therapies for Alzheimer’s and cancer, biotechnology touches every aspect of our daily life. From coast to coast, Canada has a strong network of companies and individuals working to make ensure we stay among the world’s best in biotechnology. National Biotechology Week is an important part of making sure we take the time to celebrate everything we have achieved in the past and everything we will achieve in the future.

For more National Biotech Week information visit our Profiles Web Portal at www.bioscienceworld.ca

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Maurice, our Front Desk Agent, isn’t exactly a huge fan of the snow. And driving in the stuff? He dislikes that even more. But one cold, grey December evening, our intrepid Maurice ventured out into one of the biggest storms of the season. What could have driven him to drive into this tempest? His sense of duty. You see, one of our guests had left an important item behind.

Knowing that a cab wouldn’t make it to the airport in time to reunite our guest with his property, Maurice took matters, as well as a frigid steering wheel, into his own hands. Arriving at the airport with mere minutes to spare, Maurice personally handed the item to our surprised, and extremely relieved, traveller. Proof once again that, even after you’ve left our hotel, you’re still a VIP.

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By: Pierre Meulien

Genomics

An Evolution

is Underway! Evolution. It’s amazing how one word represents so much of who we are, what we do and why we do it. Evolution fuels the movement from chaos to order, from simple to complex, from small to big, and from survival to prosperity. Evolution is used in the context of nature, people, societies, economies, industries, countries and more...even the universe. In the big picture, evolution is the way of getting from there to here.

Canada is undergoing an evolution, one being driven to some degree by the emergence of an economy and society increasingly reliant on biological developments and insights. This bio-economy is important to the country today but is expected to become crucial tomorrow. Increasingly, our quality of life, ability to succeed globally, the advancement of our political and cultural interests, and other aspects of the Canadian fabric will rely on the relative strength or

Table 1: A Sampling of Genome Canada Currently-Funded Projects Centre

Sector

Project Title

Genome Alberta

Environment Agriculture

Metagenomics for Greener Production and Extraction of Hydrocarbon Energy

genomealberta.ca

Application of Genomics to Improve Swine Health and Welfare Genome Atlantic genomeatlantic.ca

Fisheries Health

Atlantic Cod Genomics and Broodstock Development Orphan Diseases: Identifying Genes and Novel Therapeutics to Enhance Treatment (IGNITE)

Genome British Columbia genomebc.ca

Genome Prairie genomeprairie.ca

Environment/ Agriculture Forestry/ Environment

Next-generation Integrated Pest Management Tools for Beekeeping

Environment Agriculture

Microbial Genomics for Biofuels and Co-products from Biorefining Processes

AdapTree: Assessing the Adaptive Portfolio of Reforestation Stocks for Future Climates

CTAG: Canadian Triticum Advancement through Genomics Genome Québec genomeQuébec.com

Health Environment

Identification and Characterization of Genes Involved in Common Developmental Brain Diseases Improving Bioremediation of Polluted Soils through Environmental Genomics

Ontario Genomics Institute

Health Environment

ontariogenomics.ca

20 BIOTECHNOLOGY FOCUS SEPTEMBER 2011

Synthetic Antibody Program: Commercial Reagents and Novel Therapy International Barcode of Life Project (iBOL)

weakness of our bio-economy. Think of our country’s biological footprint in our forests, food production capacity, our environmentally responsible energy and mining sectors and you can easily imagine Canada’s potential to play a major part in the bio-economy. In biology, evolution is the process. Genes are the mechanism through which this process works. Genes are its building blocks. Genomics is how we study and understand genes and their effects, how we employ these building blocks, and how a new level of understanding of how living things work can benefit us all. In our world, genomics is a building block of science, industries, economies and even societies. It’s a critical element in the Canadian bio-economy and an essential aspect of our biotechnological prowess. It’s not hard to argue that genomics is instrumental in building a country that’s moving forward – or evolving – based on insight and ingenuity which most of us know as innovation. Genome Canada is a not-for-profit organization that motivates genomics research and cultivates a rich, vibrant genomics enterprise in the country with a view to generating economic and social benefits for Canadians. We are unique among Canadian research funding organizations in that we support large-scale research and development projects in the life sciences, and develop the technologies that enable Canadians to maintain leadership in key areas of the genome sciences. Our mandate spans five areas of economic interest to Canada: Human Health, Agriculture, Fisheries, Forestry and the Environment. We are completely focused on genomics. With the financial support of the Canadian government for over a decade (totaling $915 million), and co-funding agreements established with the provinces, industry, international partners, philanthropists, Canadian institutions and others, Genome Canada has invested some $2 billion in genomics research in the country, across all provinces in all of the sectors noted previously. Genomics research may delve into a microscopic world, but the scope of the effort is often macro-involving dozens of scientists,

huge volumes of data and complex technologies. Genome Canada is designed and operated specifically to support such largescale projects. We’re unique in our ability to do so. Last year alone, for instance, we selected 16 research teams to share more than $121 million in funding. The way we are structured is another aspect of our uniqueness. We employ a national network of regional centres aimed at addressing local needs who work in concert with Genome Canada. This model is not “mother ship” directing affairs from afar. Rather, it is a cooperative and collaborative network that comes together in various ways to advance genomics that improve life for all Canadians. Not surprisingly, this has resulted in regional expertise allowing research results to be translated to those who can use them most effectively. For instance, livestock and energy projects are located in Alberta, crop improvement genomics are in the prairies, aquaculture and wild fisheries activities are in the coastal regions, forestry is in western Canada and Québec, and human health research is prominent in Ontario, Québec and BC. Using this structure, it is with and through genomics that we build bridges, make connections and form networks among and between the communities of science, academia, industries, corporations, governments, and others who shape our society, not only in Canada but around the world. There is third unique aspect to Genome Canada, one that helps focus projects on innovation, application and, ultimately, economic and social benefits. Our projects include a component that addresses the ethical, environmental, economic, legal or social aspects of the research being undertaken. This work involves key stakeholders – from industry to the general public. One of the main thrusts of this component is to encourage and speed the adoption of new approaches and technologies. In short, we’re helping the country accrue benefits from innovations as quickly as possible. The net impact of what we do is to advance our collective knowledge, create new uses and applications of our findings, stir debate and fuel discussion of not only what MIGHT be, but also of what SHOULD be. We encourage, through investment and dialogue, the employment of genomics building blocks in new ways to develop Canada’s capacity to evolve to a better future, to build a bio-economy. Genomics works on the smallest of scales, studying the building blocks of life. But the knowledge that comes from a single genomics discovery can have significant, transformative impact across a wide range of applications in areas such as human health, food supply and safety, clean energy, envi-

ronmental sustainability and more. To foster such developments, Genome Canada serves as an integrator, bringing together people and groups in research, academia, industry, government and elsewhere to cultivate projects that deliver value to Canadians. In particular, our work has a translational emphasis that promotes innovations leading to economic and social benefits, enhanced research or industrial capability, technological advancement and improved infrastructure, policy development and public dialogue and more, much more. These partnerships pay off in ways we can all appreciate. For instance, pork producers are seeking ways of breeding swine less susceptible to major diseases, reducing the need for costly antibiotics. At the same time, genomics research is underway to develop disease-control mechanisms and diagnostic tools to mitigate illness or spot it early on. The rewards will be profound. Knowledge of the bovine genome applied to cattle-raising practices has helped Canadian producers realize benefits of $180 million a year! Cutting across sectors also pays off. For example, it used to be that energy production was energy production, farming was farming, and never the two would meet. But with the rise of the bio-economy, the borders between many economic sectors have blurred. At the genetic level, living things are much the same – microbes and humans, pine trees and parasites. And that means discoveries in one arena can have game-changing applications in another. Metagenomics – the study of microbial communities rather than individual microbes – has become a hot research area precisely because of its potential to yield discoveries and technologies that cut across whole economic sectors. For instance, some of our funded work is looking at proteins that can convert inexpensive organic waste into high-value biofuel and at the same time help clean up polluted land and water. At Genome Canada, we know from experience that innovation happens when different bodies of knowledge team up across different disciplines and perspectives. For instance, in the 1990s the Human Genome Project required 10 years and $2 billion to sequence one human genome. In 2010, the same process takes days and costs $7,000. In the future, it’s expected to take even less time and be even cheaper to perform. In the U.S. where most of the Human Genome was deciphered, estimates indicate that genomics-related industries employed over 44,000 people and generated industrial output on a scale of about $21.4 billion. In Canada, the genomics enterprise and Genome Canada are much younger and

Genomics our efforts in this domain are comparatively newer. Nonetheless, our investments have already led to 20 companies being created or enhanced. This is a very early indicator of a wave of innovative biotech businesses to come that will drive our economy forward and probably serve as a key foundation to our prosperity and quality of life. For instance, Icy Waters Ltd. uses a genomics platform built around the salmon family of fish to improve the brood stock of their product – delicious Arctic char! This platform was developed by two of Canada’s stars in this area – Drs. Willie Davidson and Ben Koop – in collaboration with many national and international partners over many years. Significant economic development stemming from genomics is not merely wishful thinking. The OECD has noted, for instance, that “biotechnology could contribute up to 2.7 per cent of the GDP of OECD countries in 2030”. Given Canada’s profile and strength, we in biotechnology should be relatively well positioned to account for a disproportionately large piece of the country’s economic pie and highly competitive on the global stage. In short, we foresee great opportunity to lead the world in many aspects of biotechnology and of genomics in particular. Canada is evolving to a better future. Genomics is at the heart of what’s come to be called the “bio-economy” – an economy driven by the application of biotechnology. It’s a global phenomenon, and we are poised to play a leading role in it thanks to our country’s history of scientific excellence, abundant natural resources, and the emergence of a rich, vibrant biotechnology sector. Going forward, our country’s success will depend to a very great degree on a biotechnological evolution, one that today is being fueled by the building blocks of genomics. Pierre Meulien, PhD has a wealth of experience in the areas of genomics, proteomics and bioinformatics within the larger realm of biotechnology and life sciences. He has served in a variety of research and research management roles for Canadian and European-based organizations.

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

SEPTEMBER 2011 BIOTECHNOLOGY FOCUS 21

By Ag-West Bio

AgBiotech

The Galleria Building at Innovation Place in Saskatoon, SK (AWB photo)

The College Building at the University of Saskatchewan (istockphoto.com)

Saskatchewan bioscience promises to capture value from innovation Saskatchewan’s bioeconomy is poised for sustainable long term growth. While attracting investment may be a challenge, there exists in Saskatchewan an enviable mix of capacity spread throughout industry, government and universities. Saskatchewan has the infrastructure and research expertise to make things happen. Worldwide, there is no question: bioscience innovation is needed. There will be more people on the planet and many will enjoy rising incomes. The amount of arable land is decreasing; many resources are less plentiful or more expensive to extract; add to this the challenges presented by climate change. Bioscience innovations will be essential to feed populations and fuel the need for transportation, energy and industrial materials – in a way that is more sustainable and friendly to the environment. Already a Canadian bioscience leader, Saskatchewan is poised to become a bright spot for innovation.

22 BIOTECHNOLOGY FOCUS SEPTEMBER 2011

hen biotech boomed in the early 1990s and early 2000s, a genetics professor with a new discovery could expect millions from investors eager to be part of the next big thing. Those days are pretty much in the past, says David Gauthier, CEO of the Entrepreneurial Foundation of Saskatchewan. “Getting to cash flow is a huge challenge because private equity has moved to laterstage deals. Investors know it’s harder to make money during early stages. It takes a long time and there’s a high failure rate,” says Gauthier, whose organization advises entrepreneurs seeking financing to grow, transition or reach stability. Gauthier’s background gives him unique insight into the ups and downs of biobusiness. With a Biology PhD and an MBA, Gauthier once managed a national venture capital fund specializing in agricultural science. He moved to Saskatoon in 2005 to become Regional Director of National Research Council’s (NRC) Industrial Research Assistance Program. Gauthier became familiar with Saskatchewan’s ag biotech industry in 1990 while

doing his graduate work. He recalls a “palpable” sense of excitement fuelled by ready investment dollars and the significant presence of large multinationals in Saskatoon. Today, many of those multinationals have scaled back their presence. The relative scarcity of early investment dollars aside, Gauthier believes bio-business has a bright future and Saskatchewan will play a leading role. “The good thing is that because of new research technologies, genomics, screening, marker assisted breeding, we have more capabilities on the research side. We also have more diverse biotech companies in the province. Maybe they’re not as big, or concentrated in one sector, but they’re a diverse group using molecular and biotech tools to support different business models,” Gauthier says.

Traditional advantages Saskatchewan’s traditional strengths as an agricultural centre also play a role, says Jerome Konecsni, director general of NRC’s Plant Biotechnology Institute. “Saskatchewan has many advantages, including 40 per cent of Canada’s arable land. We have skilled producers and a good distribution system,” Konecsni says. Add to the mix a healthy business atmosphere and one of the lowest tax rates for manufacturers, and the province is more than competitive. But Konecsni notes that skilled personnel are still needed on the processing side of the equation. “I believe we’re on the right track. The province has identified three pillars for inno-

AgBiotech The most advanced facility of its kind in the world, VIDO’s International Vaccine Centre (InterVac) in Saskatoon, SK will be used to study containment level 3 diseases affecting humans and animals. Photo courtesy VIDO-InterVac.

Theo Maatman, technical officer, Plant Growth Facilities works in an greenhouse occupied by National Research Council-Plant Biotechnology Institute. vation strategy, based on natural advantages. Encouraging more industrial investment is an important part of the plan,” he says. Konecsni was recently appointed CEO of Innovation Saskatchewan, assuming his new position at the end of September. Mary Buhr is also confident about Saskatchewan’s role in the future bioscience world. Buhr is Dean of the University of Saskatchewan’s College of Agriculture and Bioresources, moving from Guelph in 2008 to take the helm at U of S AgBio. “One of the things that blew me away when I got here, was how incredibly effective and functional the research community is here. There is a lot of collaboration whether you’re from the corporate world, university or government,” Buhr says. “I’ve said this many times before – our research park in Saskatoon, and this extends to Regina as well, is second to none in Canada. Where else can you find facilities like the Canadian Light Source, VIDO-Intervac, a nuclear industry, Agriculture and Agri-Food Canada and various federal and provincial facilities, and generally a sense of optimism from people who work in the sector.” What needs to improve, says Buhr, is the actual number of companies “on the ground” bringing research and knowledge to commercial markets. “We still tend to be people who sell rawor lightly-processed material for export, and leave the fine details to be done elsewhere. Of course transportation is an issue, and we don’t have a large manufacturing industry, but at the same time we can’t limit ourselves to developing great ideas yet having the products created somewhere else. We lose out.”

Need for bio With plentiful natural resources increasingly in demand, some might think Saskatchewan could enjoy prosperity just relying on its

natural bounty. But that would be a mistake, says Peter Philips, an international political economist and head of Political Studies at the U of S. “This is probably the third commodity cycle I’ve seen during my professional career – what goes up, does come down,” cautions Philips. “Having a resource is not enough in the 21st century. And the value that can be added to something, whether it’s a pound of potash or uranium or canola, the bulk of that value isn’t in the resource or even the land and capital infrastructure. The bulk of that value is knowledge, and knowledge is very fluid.” That means a continued investment in creating and sustaining knowledge, and attracting and using the people who create this intellectual capital, says Philips. Proof of the concept, he notes, lies in the value now being realized because of strategic investment in Saskatchewan’s agrifood cluster in decades past. “If you look at Canada, every province used to have an agriculture college and federal laboratory. Many now do not. Saskatoon is now extremely competitive because it has these things – if you’re a firm looking to do basic research and adapt technologies and products to new production and supply chains, it’s not like there are hundreds of candidate cities,” Philips says. Ag-West Bio could be considered one of those early investments, and Wilf Keller, the organization’s president and CEO says it is essential that the public and policy makers understand the potential role of bioscience in economic and human health terms. “Bioscience is really coming to the fore. You can think of it as the threshold of an-

other era of science. Some people liken it to the computer industry,” Keller says. It’s a new era, with the potential for developing new genetic strains in crops and livestock, ensuring adequate food as the climate changes, and allowing a better understanding of the role of food and food ingredients in human health, says Keller. Bioscience will provide new methods of diagnosing or preventing disease, and healthier ways of creating renewable energy and bioproducts, such as plastics and lubricants. “Our environment, our economy and our health; these are things that matter to all of us.” The basic infrastructure already exists for capturing value from bioscience innovation here at home, but Keller says more direct public investment is needed to foster the critical mass of companies needed for any healthy cluster. “The pool of venture capital in Saskatchewan, and Canada, is too small and riskaverse. We of course have a number of programs and agencies in place, and Ag-West is one of them, but it would be desirable to see more of these, with more funding, working more closely together,” Keller says. “More public labs won’t be a key aspect going forward, but companies in a cluster can play a much stronger role. We have a vision of where we want this cluster to be in Saskatchewan – a critical mass of companies that supply other companies, a critical mass of managers, researchers and well-trained employees.” Governments can also assist by easing the regulatory burden that sometimes prevents helpful technologies from ever reaching commercial markets. “We need to provide the venture capital and remove some of the red tape. If we can do that, I see a very bright future for bioscience in this province,” Keller says.

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

SEPTEMBER 2011 BIOTECHNOLOGY FOCUS 23

By: Paul Karamanoukian

Finance

A Path Back to Success: How Canadian Biotech can regain lost ground and access capital

ith domestic biotech companies capturing just two percent of all global capital raised in 2010 – a drop of five per cent since 2006 – and private financing in Canada at its lowest point in 10 years, it’s clear the industry is losing ground on the global stage. The Canadian biotech industry must return to business fundamentals and reinvent itself to capitalize on the opportunities born fromthe changing health care system. Few industries face increased demand quite like biotechnology. Medical, pharmaceutical and biotech are critical as demand for health care services continues to grow and expand, fuelled by an aging demographic and new entrants into the healthcare system (China, India). Last year, the industry experienced record-breaking profitability in multiple markets, and in general, funding appears to be rebounding on the international stage. And yet no one would mistake the current climate as golden days for the life sciences sector. Although funding grew last year, with companies in Canada, Europe and the U.S. raising $25 billion in 2010 and marking a return to pre-financial-crisis averages – that funding is increasingly skewed to a small number of firms, and in particular, is going to mature, profitable firms, meaning funding for ‘innovation’ continues its downward trend. Meanwhile, biotech firms seeking operating efficiency have sharply reducedresearch and development spending. This is particularly true in Canada, where R&D expenses were slashed by 44 per cent in 2009, followed by a 7 per cent decline in 2010. Clearly this is not a sustainable long-term model for success; innovation in the sector is required. And while the industry enjoys steady demand, with it has come greater expectations of efficiency and effectiveness, especially from governments straining under ever-increasing 24 BIOTECHNOLOGY FOCUS SEPTEMBER 2011

health budgets. An outcome-based health care system is the new reality; firms will need to operate more efficiently even as they dedicate more resources to demonstrating value. Ernst & Young’s annual global biotech industry report, Beyond Borders, noted that as in resource development, the early highreturn opportunities in biotech have been found and now R&D will become even more vital in finding strategic opportunities. This ‘resource’ metaphor should not be lost on Canada, a country long associated with a blessing of rich resources that has not met its full potential in the refinement of finished products. Once again we run the risk of failing to invest adequately where we could realize the most value. The risk for Canada of reduced funding and strained resources for innovation trends is that we’ll be left behind on the global scene, consigned to become a net importer of the most valuable knowledge, products and services–a model that does not servewell the domestic biotech industry nor

the public payers well. But there is a path back to success. And although the solutions for Canada are not especially different than those for the rest of the world, Canada must act with greater urgency if it hopes to regain lost ground and harness its full potential. What are those solutions? Firstly, by refocusing on business fundamentals, Canadian industry can reverse its downward trend and establish a more stable footing. Secondly, a resolute willingness to embrace innovation will enable Canadian firms to capitalize on the opportunities born of the changing health care ecosystem.

Four complementary approaches can sustain the innovation needed to succeed: Prove it or lose it. In an outcomes-driven ecosystem, companies will be under more pressure to prove that their products are differentiated. In an environment where health care needs to become more sustainable and where new technologies are creating opportunities to realize that goal, both health care providers and patients will change their behaviours and expect the same of others. Biotech firms will have to prove they can do more than sell doses; they need to be a part of the improvement of health outcomes, and they need to demonstrate it to regulators, to payers and to investors. Do more with less. Companies will need to find new ways to manage capital and conduct R&D more efficiently. While raising capital is itself a challenge in the current climate, there are actually four pieces to the capital puzzle: raising, optimizing, preserving and investing. On the capital side, companies will need to be creative in raising,

Finance optimizing, preserving and investing scarce capital – from new ways of monetizing existing intellectual property to pursuing “virtual” company models to reduce fixed infrastructure. On the R&D side, targeted products for smaller populations can be more efficient, requiring smaller trials, less generic competition and fewer safety issues. Build new competencies. To support the first two imperatives, managers will need different competencies: awareness of changing market dynamics, management discipline, effective performance management, the ability to measure and communicate value, and the creativity to develop new models and approaches.

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Collaborate for co-ordinated action. As with their leaders, biotech companies themselves must adapt to exist in a broad interdependent business culture. Sustaining innovation in an outcomes-based system requires changes that biotech companies cannot make alone, necessitatingco-ordinated action with everyone from investors and policy makers to payers and regulators. Can the Canadian biotech industry adopt these approaches and grow and sustain innovation? It’s certainly not for a lack of potential. We have intellectual assets, infrastructure and a global reputation; these form a strong foundation that means these four fundamentals are all within reach. But growth, perhaps evensurvival, depends on adaptation; sticking with historical business approaches and attempting to compete by shaving spending on research is neither strategic nor sustainable. Instead, demonstrating a home-grown capacity for both innovation and value can be the hallmark of a reinvigorated Canadian biotech sector. Above all, it’s the intangible factor of the industry’s willingness to embrace new values that will form that path back to success. Paul Karamanoukian is Ernst & Young’s Canadian life sciences industry leader. Read more in Beyond Borders: Global Biotechnology Report 2011 at www.ey.com/GL/en/ Industries/Life-Sciences/ Beyond-borders--global-biotechnology-report-2011

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By: Jeffrey Graham, Chantal Saunders and Beverley Moore

Across cAnAdA

Biotechnology Public Policy agenda Biotechnology Focus has done an excellent job of providing A Wealth of Policy Ideas to Build On a forum for members of the biotechnology community Many of the issues that define the current to comment on “hot topics”. As one might expect, the policy agenda have been discussed for a number of years. By way of illustration, responses have been far reaching, covering such issues as the 2003 “Integrated Strategy for the Britaccess to capital, existing government programs, government ish Columbia’s Technology Cluster White Paper” included recommendations to improcurement policies, the technology transfer process at prove government programs like IRAP and research institutes and universities, our intellectual property SR&ED, stimulate early stage capital financregime and human resource issues. ing through flow-through share tax credits, There is a broad consensus that, as Canadians, we are very good at inventing things, but less capable at bringing products resulting from our inventions to market successfully. This shortcoming is not merely with respect to biotechnology but extends across the many sectors of the economy. With a new federal government in Ottawa and new governments to be installed at the provincial level in a number of jurisdictions over the next couple of years, starting with Ontario later this fall, there is, perhaps, a new opportunity to make changes that have a positive impact on the public policy framework relevant to the sector in Canada. To do so we need to carefully assess what has been said, who has said what, and what issues are currently under review. 26 BIOTECHNOLOGY FOCUS SEPTEMBER 2011

Some Guiding Principles Let us start with a few guiding principles. First, in all that we do, we must ensure that we are competing against the world outside of our borders, not our fellow citizens. Second, we need to encourage all levels of governments, municipal, provincial and federal, to work cooperatively on our behalf. Third, we must also insist that in shaping policy, government officials, both elected and un-elected, consult with those of us in the private sector. Finally, the sector must realize that, with few exceptions, major policy changes will likely be driven by a broader interest in encouraging innovation in the Canadian economy rather than for the benefit of the biotech sector alone.

establish an early-purchase program for new technology, and create a targeted inbound investment program for anchor companies. In 2006, the Biotechnology Council of Ontario (which has evolved into Life Sciences Ontario) issued a seminal report entitled “Public Policy For Life Sciences” recommending, among other things, a provincial cabinet committee to align economic and health policy, incentives for pharmaceutical companies to contribute to the pool of risk-based investment capital, formulary/ procurement policy changes to improve uptake of biopharmaceutical innovations, and tax incentives to attract capital including flow-through share tax credits. Also in 2006, the Expert Panel on Commercialization established by the federal government and chaired by Joe Rotman delivered its report

Across Canada

entitled “People and Excellence: The Heart of Successful Commercialization”. Among other things, the Expert Panel recommended a Commercialization Partnership Board that would serve in an oversight role for federal commercialization policies and make recommendations with respect to the major commercialization initiatives that the Expert Panel proposed, including a public-private commercialization superfund, a new angel co-investment program, and the Canadian SME Partnership Initiative aimed at helping SME becoming more globally competitive. In the spring of 2007, a new Science and Technology Strategy and governance structure replaced the federal government’s Canadian Biotechnology Strategy, including a new Science, Technology and Innovation Council. In 2008, the Council recommended a set of science and technology strategy subpriorities for the design of Canada’s research support programs including: biofuels, regenerative medicine; neuroscience; health in an aging population and biomedical engineering and medical technologies. The 2009 federal budget, known as “Canada’s Economic Action Plan”, contains one of the single largest federal budget investments in science and technology to date. The plan announced $5.1 billion in new spending in the areas of science and technology infrastructure, research, people and commercialization. One might reasonably ask what impact these expenditures have had on Canada’s biotech sector. In October 2010, the Coalition for Action on Innovation in Canada, co-chaired by Paul Lucas of GlaxoSmithKline and the Honourable John Manley, issued a report entitled “An Action Plan For Prosperity”. The Coalition proposed ten steps toward a more innovative Canada, briefly stated as follows: (i) reform of the SRED tax credit regime (ii) expansion of the pool of risk capital by considering the establishment of governmentsponsored co-investment funds; (iii) adopting the world’s strongest intellectual property regime; (iv) steps to strengthen businessacademic links; (v) tapping private-sector expertise when spending public money; (vi) speeding adoption of innovative products and services by governments in Canada; (vii) launching a national learning and innovation initiative; (viii) seeking out the best and brightest to study in Canada and remain thereafter; (ix) nurturing and strengthening innovation clusters and (x) ensuring ongoing advocacy for innovation - establishing

The majority of provinces have strategies to accelerate and support biotech. One would expect that the sector would watch with interest the recent joint Québec-Ontario announcement of a life sciences corridor.

of an independent advocacy body with the single mandate of encouraging innovation by Canadian business. In addition, the Coalition proposed a number of fiscal priorities for driving innovation, noting that measures with significant impact may either have to wait until governments return to surplus or be matched with offsetting tax increases or spending cuts in other areas. With this proviso, the Coalition joined other voices by recommending tax relief for investors aimed at increasing the flow of capital to innovative companies; tax relief for individuals aimed at increasing the supply of talent; increased financial support for research institutions targeted at greater commercialization of discoveries; and access to capital for innovative firms. The Coalition pointed to an innovative tax credit in British Columbia for investors investing in innovative firms and also noting that another way to compensate for the serious shortage of risk capital would be to apply the flowthrough shares model that has helped make Canada a global leader in resource financing. The Coalition also had a number of innovative tax proposals to encourage recruiting and developing talent. The majority of provinces have strategies to accelerate and support biotech. One would expect that the sector would watch

with interest the recent joint Québec-Ontario announcement of a life sciences corridor. This initiative will undoubtedly shine greater attention on the policy successes of Quebec in having attracted arguably a disproportionate share of R&D to the province, including the impact of its imaginative “best available price plus 15 year” policy.

The Current Agenda The federal government R&D review panel, chaired by Thomas Jenkins of Open Text Corporation, has been asked to make recommendations to the government on the effectiveness of existing federal programs, including the SR&ED program. It will consider which federal initiatives are most effective in increasing business R&D. It will also look at the appropriateness of the current mix of tax incentives and direct support and consider whether there are gaps in the current programs. The panel’s recommendations are due in October 2011. Negotiations on a comprehensive economic and trade agreement between Canada and the European Economic Community (EEC) are expected to be completed in 2012. The EEC has tabled a number of issues that would have potentially significant impact on the domestic biopharmaceutical sector: patent term extension - providing up to five SEPTEMBER 2011 BIOTECHNOLOGY FOCUS 27

Across Canada In arguing for public policy changes, wherever possible, the biopharmaceutical sector needs to align itself with other sectors that have the potential to position Canada as a world leader in innovation.

years of automatic additional protection after a patent expires (plus six months if pediatric studies have been carried out) for drug products requiring marketing approval, where the time period a patent-protected product is on the market has been shortened by the lapse of time between the filing of a patent and the granting of market authorization by Health Canada; extension of data exclusivity for all pharmaceutical products resulting in potentially an additional two or three years of exclusivity; rights of appeal under Canada’s

Patented Medicines (Notice of Compliance) regulations for both innovators and generic manufacturers; and border measures that would require Canada to adopt procedures that would allow customs officials to detain shipments of imported drugs at the border

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where a company believes that the product may infringe one of its patents. At the same time there are a myriad of issues on the current public policy agendas of either the industry or governments, including modernization of food and drug regulation; provincial price regulation of biopharmaceuticals including coordinated buying/reimbursement by governments; funds for innovative vaccines and green bio-based technologies; and the relationship of the biopharmaceutical industry to CADTH. To that list one might add the review and updating of the jurisdiction and activities of the Patented Medicine Prices Review Board, including its role in reporting R&D expenditures (including the definition of such expenditures) and its controversial role in regulating the prices of vaccines and generic drugs.

Moving Forward In arguing for public policy changes, wherever possible, the biopharmaceutical sector needs to align itself with other sectors that have the potential to position Canada as a world leader in innovation. In every instance, the sector needs to present the public interest benefit from its proposals, rather than focus on the private interest. Finally, it must not be discouraged that it has not achieved all that it has attempted. We live in a country where those who are committed to advancing the public interest almost always succeed. Biotechnology in Canada is still a very young sector. In terms of public policy it has already accomplished a great deal and its prospects for future public policy successes are strong. Jeffrey Graham is one of Canada’s leading biotech and pharmaceutical regulatory counsel. He is a partner in the Toronto office of Borden Ladner Gervais LLP and the leader of the firm’s national biotech and pharmaceutical group. Chantal Saunders is a partner in the Ottawa office of Borden Ladner Gervais LLP. Chantal is a lawyer and a registered patent agent. Beverley Moore is an associate in the Ottawa office of Borden Ladner Gervais LLP. Beverley is a lawyer.

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For more aCROSS cANADA information visit our Best Practices Web Portal at www.bioscienceworld.ca

CALENDAR SEPTEMBER

OCTOBER

September 13-15

October 3-4

Stem Cells USA & Regenerative Medicine Congress Venue: Boston, MA Tel: 212-379-6322 Fax: 212-379-6319 Email: enquiry.us@terrapinn.com Web: www.terrapinn.com

Tech Transfer Summit North America Venue: Bethesda, MD Tel: +44 (0)207 263 2858 Fax: +44 (0)207 692 0212 Email: morris@techtransfersummit.com Web: http://www.techtransfersummit.com/ northamerica2011

September 16-23

October 3-4

October 20-21

National Biotech Week Web: www.imagenenation.ca

Biofuels International Expo & Conference Venue: Calgary, AB Email: rebecca@horseshoemedia.com Phone: +44 (0) 20 8687 4138 Fax: +44 (0) 20 8687 4130 Web: www.biofuelsinternationalexpo.com/ canada/

CVG Conference and Exhibition Venue: Toronto, ON Tel: 450-505-1406 Email: Convention_Registration@cvg.ca Web: www.cvg.ca

September 27-28 HSE Canada 2011 Venue: Toronto, ON Tel: 647-893-8984 Email: nate@hsecanada.ca Web: www.hsecanada.ca

September 29-October 1 BCSLS Congress 2011 Venue: Castlegar, BC Tel: 604-714-1760 Fax: 604-738-4080 Email: bcsls@telus.net Web: www.bcsls.net

Email: paulinem@ashg.org Web: www.ashg.org/

October 9-11 BioPartnering Europe Venue: London, UK Tel +1.831.464.4230 Fax +1.831.464.4240 Web: www.techvision.com/bpe/

October 11-15 International Congress of Human Genetics Venue: Montréal, QC Tel: 301-634-7300 Fax: 301-634-7079

October 11-13 Biotechnica 2011 Venue: Hannover, Germany Tel: +49 511 89-31028 Fax+49 511 89-33349 Email: katharina.siebert@messe.de Web: www.biotechnica.de

October 27-29 CAN Annual Scientific Conference Venue: Québec City, QC Tel: 416-586-4770 Fax: 416-586-8395 Email: can@arthritisnetwork.ca Web: www.arthritisnetwork.ca

October 31-November 2 Bio Europe Venue: Duesseldorf, Germany Tel: 760-930-0500 Email: chundschell@ebdgroup.com Web: www.ebdgroup.com/bioeurope/ index.php

Company & Advertiser Index COMPANY

Page RC

COMPANY

Page RC

Afexa Life Sciences Inc....................................6.........................................

Fisher Scientific.................................................... 2.......................................4941

Ag-West Bio....................................................22........................................

Gairdner Foundation.......................................... 7.......................................4943

AlbertatBay.......................................................... 19......................................4947

GEA Westfalia Separator.................................... 25......................................4948

Atrium Innovations.........................................9.........................................

Genome BC.....................................................6.........................................

AxSource Consulting Inc................................... 17......................................4946

Genome Canada............................................20........................................

BioTalent Canada.............................................. 8, 11....................................4945

GlaxoSmithKline.................................................. 5.......................................4942

BIOTECanada.................................................18........................................

Helix BioPharma Corp.....................................6.........................................

Canadian Institutes of Health Research..........8.........................................

Intellipharmaceutics Inc................................10........................................

Canadian Science Policy Conference............. 31......................................4949

Lawson Health Research Institute................... 9.......................................4944

Conference Board of Canada.........................15........................................

Ontario Institute for Cancer Research.......... 6, 10......................................

Cytochroma...................................................10........................................

Par Pharmaceutical Inc...................................10........................................

DVS Sciences Inc............................................10........................................

Performance Plants Inc. ................................10........................................

Eppendorf............................................................ 32......................................4950

Roche Canada.................................................7.........................................

Ernst & Young Canadian Life Sciences............24........................................

Warnex Inc......................................................9.........................................

SEPTEMBER 2011 BIOTECHNOLOGY FOCUS 29

THE LAST WORD

By Brad Thompson

Give something back; Get involved

Brad Thompson Chairman, BioteCanada President & CEO, Oncolytics Biotech Inc.

here is no doubt that the Canadian biotechnology industry is experiencing sustainability issues in this challenging economic environment. In June 2011, Ernst & Young published a report entitled Beyond borders: Global biotechnology report 2011 explaining that Canadian biotech companies did not capture their share of the global capital raised in 2010, while private biotech financing in Canada is at its lowest level in 10 years. Capital comes from four basic sources – government, public capital markets, venture capital (VC) funds, and industry partners. If the funds available from any of these sources are substantially reduced, then a gap is created in the continuum of funding necessary for a strong industry. When funding is obtained it comes with a price tag, as each source of funds expects something in return. Government can provide funding in a variety of ways: academic funding provides the science and technology that is essential for the long-term success of the industry, while commercialization funding has more potential short-term impact and acts as a supplement to capital market funding. The federal and provincial governments can also stimulate funding directly through investment initiatives or indirectly through tax incentives. In return for its funds, the government expects job creation, revenue from personal and corporate income tax, as well as return on their direct investments. In the public capital markets, funds flow to where there is an acceptable balance of risk and reward. The biotechnology industry is an inherently high-risk investment opportunity which generalist investors tend to shy away from in uncertain economic climates such as these. Canadian venture capitalists dedicated to biotechnology are a source of funds, but have faced several challenges in recent years including a decline in funds earmarked for Canadian biotech, with VC money being allocated towards technology companies with shorter development timelines than traditional biotech. In addition, institutional and retail investors have grown increasingly reluctant to invest new funds in biotech in the current economic climate, opting instead for lower-risk investments. In these less than ideal circumstances, it is our job to identify what we can do to spur the future success of the Canadian biotech industry. It is our responsibility to encourage renewed interest in all of the incredible leadingedge science and technology we develop in Canada, and bring the funding from the capital markets back into Canadian biotechnology. While we cannot do anything about the sovereign debt crisis and all-time-high gold

30 BIOTECHNOLOGY FOCUS SEPTEMBER 2011

prices, I am confident that we have the power to successfully develop new products and companies which will generate value for shareholders and will bring investors back to the sector. Capital alone is not sufficient to create a successful industry - it needs to be properly combined with science, people and partners. Ernst & Young’s report identifies four complementary tactics biotech companies should use to ensure their survival despite a challenging environment. One of these tactics is to “build new competencies”, with suggestions to “look inward” and “get business into fighting form”, so why not look inward and take advantage of the wealth of experience we have in our industry veterans? Current and former Canadian biotech executives represent an invaluable resource to our biotech companies, both private and public. I believe that it is our job to give something back and get involved. Experienced executives can bring immense value in an informal or formal manner, by providing mentorship, participating on advisory boards or even at the board director level. I would encourage companies, no matter the size, to seek advice and involvement from experienced biotech executives, and I encourage my colleagues to take the time to help out our industry by providing their knowledge and expertise. There is no simple solution to the Canadian biotechnology industry’s problems. While increased funding is the simplest solution to enable Canadian biotechnology companies to emerge from this challenging environment, funding on its own doesn’t guarantee success. The industry will have to build on its strengths to develop short-term and longer-term strategies for success, and one of those strengths is the accumulated experience of the people in our industry.

Got something to say? Please send your comments/letters to biotechnology_focus@promotive.net

5 the more 2 rec

3rd Canadian Science Policy Conference

Building BRIDGES for the Future of Science Policy in Canada

THEMES Science, Politics and Culture in Canada Enabling Private Sector Innovation Exploring the True North, Reflections on Northern Science Policy Special Focus: International Year of Chemistry Major Issues In Canadian Science Policy Workshop on Nuts and Bolts of Science Policy 5 themes, 16 panels, 1 workshop, more than 60 invited speakers, 2 receptions, & 2 suprise events.

2011

Ottawa Convention Centre Ottawa, ON November 16-18

For more information or to register go to www.CSPC2011.ca Or write to us: info@sciencepolicy.ca

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Biotechnology Focus September 2011

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