Biotechnology Focus September 2012

INSIGHTS FOR THE LIFE SCIENCE INDUSTRY

SEPTEMBER 2012 VOLUME 15, NUMBER 8

CANADIAN BIOTECH DRIVING CANADA’S ECONOMIC TRANSFORMATION

Publication Mail Registration Number: 40052410

contents SEPTEMBER 2012 – VOLUME 15 – NUMBER 8

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21 Cultivating Ontario’s clinical trials landscape

FEATURES SUCCESS STORIES IN CANADIAN HEALTHCARE We must do more than just celebrate success, we must understand how and why we were successful (By Wayne Schnarr)

Opinion

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WE ASKED AND YOU RESPONDED

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CANADA’S BIOTECH INDUSTRY DRIVING CANADA’S ECONOMIC TRANSFORMATION

15 Q&A with Minister of State, Science and Technology Gary Goodyear(Compiled by Toby Fyfe, editor CGE)

Results from our annual National Biotech Week Survey (Compiled by Shawn Lawrence)

(By Andrew Casey)

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23 Spotlight

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www.bioscienceworld.ca

CANADA’S GAME CHANGER There is renewed hope in Canada’s research community that stronger IP standards are on the way (By Kalvin Reid)

ACROSS CANADA Clinical Trials Ontario (CTO) has been established to make Ontario a more attractive jurisdiction for drug development (By Daniela Fisher)

SPOTLIGHT The industry is now at a crossroads. Its business model looks dated in a healthcare ecosystem that is changing dramatically. Heather Fraser discusses how should companies respond.

THE LAST WORD Roberto Bellini president and CEO, BELLUS Health Inc. discusses the impact of orphan drugs, and why everyone is talking about them SEPTEMBER 2012 BIOTECHNOLOGY FOCUS 3

PUBLISHER’S NOTE

PUBLISHER/ EDITOR-IN-CHIEF STAFF WRITERS

Terri Pavelic Shawn Lawrence

Daniela Fisher

Celebrating Canada’s bio-economy As we enter September folks, it’s time again to celebrate Canada’s excellence in biotechnology and “imagenenation” with the 9th National Biotechnology Week. From Sept.

14 to 21, the week will offer the chance to celebrate and raise awareness for Canada’s life sciences and its world-class bio-economy.

Hosted by BIOTECanada and its national organization partners, along with Abbott, AMGEN, Genzyme and Pfizer, the pan-Canadian event will see activities being held across the country devoted to educating or networking. Canadians will have the chance to engage bio-economy business leaders and public officials, as well as participate in a variety of events meant to inspire appreciation and interest in the sector.

The bio-economy is a new type of economy, one that is based on increasing the use and application of biotechnologies in all types of economic activity. In Canada, we have one of the strongest biotechnology sectors in the world, with a core biotech community of just under 600 firms. Our bio-economy is worth over $87 billion, more than seven per cent of the country’s GDP, and it supports over one million jobs.

As biotechnology enjoys a moment in the financial investment spotlight, we’re seeing biotech applications being used in a number of industries, from health to manufacturing, environment and agriculture. As Canada continues to lead in biotechnology innovations, such as producing biofuels for jets, there is much to celebrate during this year’s National Biotechnology Week.

The week will also give businesses and organizations the opportunity of raising their profile to a national level, along with networking and collaboration opportunities with local and national companies. Activities planned include lectures, workshops, educational programs, webinars and facility tours.

It will also see the National Advocacy Day (for biotechnology) taking place on Tuesday, Sept. 18 in Ottawa, which will give participants the opportunity to meet with MPs and government officials to discuss national public policy endeavours.

Along with advocacy, networking and collaboration, the week will focus on educating the general public about biotechnology, and how it affects everyday life, as well as promoting the life sciences to Canada’s youth, such as with the BIOlympics, held in London, ON, on Sept. 20.

The event will kick off with a luncheon on Sept. 14, hosted by the Chamber of Commerce in Halifax, N.S., as part of its Distinguished Speakers Series.

National Biotechnology Week provides the biotechnology community with the chance to collaborate, network, and help raise awareness – to government at all levels as well as financial investors – of what needs to change in biotechnology, to better build Canada’s bio-economy.

For more information and a full calendar of events taking place across the country, go to: imagenenation.ca.

CONTRIBUTING WRITERS

Andrew Casey

Heather Fraser

Kalvin Reid

Roberto Bellini

Toby Fyfe

Wayne Schnarr

National Account Manager

Marcello Sukhdeo

GRAPHIC DESIGNERS

Elena Pankova

David Potocki

CONTROLLER

John R. Jones

MARKETING MANAGER

Mary Malofy

CIRCULATION DIRECTOR James Watson circulation@promotive.net Tel: 705-812-0611

EDITORIAL ADVISORY BOARD Celine Bak, Analytica Advisors; Rob Henderson, BioTalent Canada; Najla Guthrie, KGK Synergize; Pierre Bourassa, IRAP, Montréal; Murray McLaughlin, Sustainable Chemistry Alliance; Carol Reynolds, Wordmark Consulting Group Inc.; Ulli Krull, UTM; John Kelly, Erie Innovation and Commercialization; Peter Pekos, Dalton Pharma Services; Brad Thompson, Oncolytics; Darrell Ethell, CanReg; John Hylton, John H. Hylton & Associates; Robert Foldes, Cognovie Inc.; Randal R.Goodfellow, P.Ag., Senior Vice President, Corporate Relations, Ensyn; Bob H. Sotiriadis, LLB, a partner with Leger Robic Richard; Dale Patterson, Genome Canada; Darcy Pawlik, Syngenta Seeds Canada Inc; Gail Garland, OBIO; Barry Gee, CDRD; Bonnie Kuehl, Scientific Insights Consulting Group Inc. Biotechnology Focus is published 10 times per year by Promotive Communications Inc. 24-4 Vata Court, Aurora, Ontario L4G 4B6 Phone 905-727-3875 Fax 905-727-4428 www.bioscienceworld.ca E-mail: biotechnology_focus@promotive.net Subscription rate in Canada $35/year; USA $60/year; other countries $100/year. All rights reserved. No part of this publication may be reproduced without written consent. Publications Mail Registration Number: 40052410 Return undeliverable Canadian addresses to: circulation dept – 24-4 Vata Court, Aurora, Ontario L4G 4B6 National Library of Canada ISSN 1486-3138 \ All opinions expressed herein are those of the contributors and do not necessarily reflect the views of the publisher or any person or organization associated with the magazine.

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

4 BIOTECHNOLOGY FOCUS SEPTEMBER 2012

Ontario Institute for Cancer Research

technologyexpo F r i d a y, S e p t e m b e r 1 4 , 2 0 1 2 To r o n t o , O n t a r i o , C a n a d a

2012

OICR is an innovative cancer research and development institute dedicated to the prevention, early detection, diagnosis and treatment of cancer. This event will be a unique opportunity to explore some of OICR’s most exciting projects, innovations and commercialization efforts, and to network with investors from across North America.

Keynote Speakers

Michael Powell, PhD Sofinnova Ventures

Stephen Hurwitz Choate, Hall & Stewart LLP

Funding for the Ontario Institute for Cancer Research is provided by the Government of Ontario

To register, please visit www.oicr.on.ca/techexpo2012

by Wayne Schnarr

Healthcare

Success stories in Canadian healthcare:

BEYOND THE CELEBRATIONS C

anadian success stories need to be celebrated and, in the healthcare sector, we can applaud many people, discoveries, products and companies. However, honouring success is not sufficient since it generally focuses on past accomplishments. At the same time that we celebrate achievements, we need to ask the following questions.

• Why were they successful?

• Can these successes be repeated or were they unique events?

• Why were other activities not successful?

• Where are the opportunities of the future?

The most prized and celebrated aspect of Canadian healthcare is its universality – every Canadian citizen has access to a basic set of health services. Access is not free since our taxes fund the 70 per cent paid for by governments, with individuals and companies paying the remainder either directly or indirectly through insurance and benefit plans. The basic set of health services may not include dental care, vision care or other healthcare services deemed non-essential by governments.

Although universality is untouchable, it is no longer business as usual in Canadian healthcare as per capita spending cannot continue to increase at annual rates well above GDP growth rates. There are some trends which are beyond any control, such as the aging population. The healthcare system pays for treating the increasing incidence of chronic conditions, such as diabetes and obesity, but has little impact on real solutions including education and attitude changes.

The biggest addressable challenge to healthcare budgets is an avalanche of new technologies, including drugs, imaging equipment and diagnostics. Total costs must be examined, such as the capital plus operating costs for every new medical product. Researchers, company management and healthcare administrators should always be asking the following

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SEPTEMBER 2012

two questions about any new service or product.

• Does the new service or product provide equivalent patient benefit at a lower total cost?

• Does the new product or service provide improved patient benefit at the same or lower cost?

A yes answer to either question probably justifies the development or purchase of the new service or product.

Healthcare systems have the biggest problem when there is an increased patient benefit and an increased cost, and they have to answer the question ‘does the increased patient benefit justify the increase in costs?’ During the development of a product, management has to ask this question continually. If the answer is ever no, and new information is unlikely to change that answer, development should be terminated. However, that is a very difficult decision for a company whose valuation is based on that single product or where the board of directors is not sufficiently experienced or independent of management and founders.

The question is extremely difficult for physicians, especially oncologists, when there is no test to determine if the patient will benefit from a new drug. With new cancer drug costs often over $50,000 and an increase in median survival during Phase 3 clinical trials of only about three months, it is very expensive to treat all patients when many will derive no benefit and only a small group will survive an additional year or more. The healthcare system will readily adopt clinical diagnostics which help it allocate resources more effectively.

This question is also extremely difficult for governments because the public and political scrutiny and second-guessing is intense.

However, the financial impact of these new therapies should not come as a surprise – simply looking at the pipelines of the major pharma, biotech and medical device companies should tell governments what might hit their budgets over the next decade. The budget impact of any of these products can be assessed when one considers how many units are needed for a province, where they should be located to maximize use and minimize patient travel, what is the installation schedule, what is the initial capital cost, what are the annual operating costs and what are the dollar savings to the healthcare system from reduced use of other services.

Medical Research Canada has a rich history of medical research to be celebrated, ranging from insulin in the 1920s to polio vaccine manuA starting point for anybody assessing the Canadian healthcare sector is two CIHI reports – ‘National Health Expenditure Trends, 1975 to 2011’ and ‘Health Care Cost Drivers: The Facts’ – which contain the following data.

• Health expenditure in 2011 is forecast to total $200.5 billion or $5,811 per capita.

• Per capita health care spending increased by an average rate of 3.5% yearly from 1996 to 2009.

• The major expenditure groups are:  Hospitals. . . . . . . . . . . . . 29%;  Drugs . . . . . . . . . . . . . . . . 16%;  Physicians . . . . . . . . . . . 14%;  Other professionals. . . 11%; and  Other institutions. . . . . 10%.

Healthcare and industry. Universities have endowment facturing in the 1950s and now genes, T-cell funds and hospitals have foundations, both receptors and stem cells. Success in medical of which compete with many other charities research probably requires four compofor the same pool of philanthropic capital. nents – excellent researchers, sustainable The big difference between universities and funding, critical mass and at least a little RIs is their ability to compete for industry luck. Canada has excellent researchers and funding. Universities are generally looking presumably its share of luck, so the focus for research funds with no strings attached has to be on sustainable funding and critiwhereas RIs are looking for partners to decal mass. velop specific technologies and products. A Medical research used to be primarily third group of players are the government conducted at universities, but the focus has funded centres of excellence, which are now shifted to teaching hospitals and their providing to universities an infrastructure research institutes (RIs). These groups do with a commercial focus that industry can not work in isolation as many researchers at more easily approach. the RIs for example, also have academic apBig pharma and medical device compapointments. While the number of researchnies created internal university campuses in ers in Canada has rapidly expanded in the the 1990s to develop their new technologies last few decades, government funding has and products. They are now dismantling not kept pace. More researchers are applythese universities because they have failed ing for a stagnant pool of funding, with the to deliver the new products needed by result that a smaller proportion of the apthese companies to replace the drugs curplicants get smaller grants. The size of the rently falling off the patent cliff. To replace academic grants may also be reduced by their internal universities, these companies the granting council’s attempts at a fair geoare looking to fund programs at established graphic distribution. The net impact is that research centers. Specifically, they are academic research funding by governments looking to fund specific areas of research alone is insufficient to support the creation by groups which have research excellence of research groups with critical mass and and critical mass, and which realize that sustainable funding. commercialization means better patient Medical research has sought additional treatments. funding from two sources: philanthropists OBIO Ad (Final):Layout 1 12-05-14 5:13 PM Page 1

As such, Canadian governments cannot afford to starve their universities and RIs because they are the source of future researchers, basic scientific discoveries and patient-oriented medical research. They must also realize that the other critical sources of funding, philanthropists and industry, are looking for research excellence and critical mass. If philanthropists do not see viable opportunities, they can wait or fund other charities. Moreover, if industry does not see viable opportunities in Canada, they are very willing to invest anywhere in the world.

Success in medical research comes in stages. The first stage might be discovery of a gene or receptor involved in certain diseases. The second stage could be the start of commercialization, such as starting a company or finding a development partner.

However, the ultimate success is the use of an approved product or procedure in patient care.

Commercializing Medical Products Since most companies developing novel therapeutic and diagnostic products will fail to get their products approved, the success stories really deserve celebration. Levels of success could include product approvals, sustainable

We’ve changed our name to

Ontario Bioscience Innovation Organization Why? It fits better.

OBIO™ members lead innovation in the life sciences. Every facet of health care with a stake in innovation is represented on OBIO Advisory Boards.

Together, we’re building a bioscience cluster that nurtures and promotes development of innovative products and services to meet the health needs of growing Canadian and global markets.

Ontario Bioscience Innovation Organization is a trade name of Ontario Bioscience Industry Organization.

SEPTEMBER 2012 BIOTECHNOLOGY FOCUS 7

Healthcare companies and increased shareholder value.

The gold standard for novel medical products is U.S. FDA approval through the NDA or PMA process. We should applaud the short list of FDA-approved novel products from Canadian companies, which includes: • 3TC for HIV/AIDS and hepatitis B from BioChem Pharma (later acquired by Shire Pharmaceuticals); • Photofrin for Barrett’s esophagus and Visudyne for AMD from QLT; • Coating technology for coronary stents from Angiotech; • Tesamorelin for HIV-associated lipodystrophy from Theratechnologies; • Mozobil for stem cell mobilization from AnorMED (after its acquisition by Genzyme); and • Arctic Front for atrial fibrillation from CryoCath (after its acquisition by Medtronic).

Is there a common theme or model in these successes? In all cases, the products were partnered or the companies were acquired prior to FDA approval. However, there are major differences between the various transactions. For example, Glaxo (now GSK) licensed 3TC at a preclinical stage in 1990 whereas Merck Serono licensed U.S. rights to tesamorelin during a second Phase 3 trial in 2008. Each of these products and companies were unique and, considering the changes which are still reshaping the pharma and medical device industries, there are probably no broadly applicable models for success.

For companies that reach the first level of success and get their products approved, the next levels of success are rewarding their shareholders and building sustainable companies. BioChem Pharma unsuccessfully attempted to grow through internal R&D but still rewarded its shareholders with the sale to Shire. The sales of AnorMED and CryoCath provided rewards to short-term shareholders. QLT and Angiotech attempted to grow through acquisitions, which were major failures from a shareholder perspective. At this time, no independent sustainable Canadian medical product company has been created from an FDAapproved novel medical product.

One-product companies will at some time face the ‘acquire or be acquired’ option.

Based on the examples mentioned above, on recent VC portfolio sales such as Enobia, GeminX and Sentinelle Medical, and the short term focus of investors in public companies, the current preference is for companies to be sold. While this will not create Canadian companies which can be the future acquirers, it will create a base of 8 BIOTECHNOLOGY FOCUS SEPTEMBER 2012

experienced managers and researchers, and satisfied investors who will look at future healthcare investment opportunities.

Canada has very few sustainable independent medical product companies. The generic drug industry has been a notable success story but only Apotex and Pharmascience remain independent after ongoing industry consolidation. This is a mature industry where new players face very high entry barriers. Several drug delivery companies have successfully developed products.

Biovail which started developing controlled release drug products, grew into a specialty pharma company, and is now part of serial global M&A specialist Valeant Pharmaceuticals. Some companies failed to make the move to sustainability, such as Labopharm, while others are just starting that process, such as Cipher Pharmaceuticals. Paladin Labs started with a small group of specialty products and has used partners and equity financings to grow into a sustainable specialty pharma company focused on Canada but with selective international growth.

Canada has an abundance of small companies with approved products for which sales are sufficient to allow them to survive but not grow. Consolidation amongst these companies might create some critical mass and sustainable companies with good growth potential.

Multinational pharma and medical device companies have been rationalizing infrastructure and personnel worldwide and those actions have impacted Canadian operations. However, some operations have survived and grown based on unique manufacturing expertise. When I worked at Connaught Laboratories in the late 1980s, employment was declining prior to its acquisition by Institut Merieux. Its specialized vaccine manufacturing capabilities, new products and changes to the vaccine market have resulted in expanded vaccine manufacturing operations. Since Medtronic acquired CryoCath technologies in late 2008, manufacturing of the complex consoles and catheters has remained in Montreal.

Although we cannot celebrate product and company failures, the industry would benefit from knowing why those products or companies failed in order to avoid repeating mistakes. Some of the factors contributing to a failure could include simple bad luck when a scientifically validated disease target is not clinically relevant, poor management, insufficient funding, poorly designed clinical programs and changing market dynamics. The analysis is often conducted because the management and directors want to know if there is any

residual product value. The results of these analyses are rarely made public.

Healthcare Services Catamaran Corp., recently formed from the merger of SXC Health Solutions and Catalyst Health Solutions, is a success story which needs to be celebrated. Although its head office and major revenue sources are now in the U.S., SXC originated in Canada as Systems Xcellence, whose business was described in its 2001 AIF as providing advanced on-line transaction processing solutions for the health-care management industry.

They had a cost-effective solution to an unmet healthcare need which they were able to grow both organically and through M&A, including expansion into the U.S. The PBM sector is now mature, going through consolidation and offers little opportunity for new entrants. However, the broader area of healthcare information technology is one which can address many needs within the healthcare services sector.

Canada has numerous small healthcare service companies which have revenues and are slightly profitable. If these companies are private and owned by founders, they are successes to the founders and employees. If these companies have a broader investor base, especially those which are public, investors are probably looking for capital gains, yield and liquidity, which can only come from growth and increased profitability. As mentioned for the smaller medical product companies, consolidation amongst these service companies might create critical mass and sustainable companies with growth potential.

During this ninth National Biotechnology Week, we should loudly celebrate past and current successes in Canadian healthcare.

However, while you are applauding, start asking the questions and seeking the answers which will allow us to have an even better celebration during the 19th National Biotechnology Week in 2022.

Wayne Schnarr is a mostly-retired healthcare consultant with over 30 years of experience in the biotech and financial industries. The opinions expressed in this article are strictly personal and do not reflect the opinions of any current or past employers or consulting clients.

For more HEALTHCARE information visit our DRUG DISCOVERY Web Portal at www.bioscienceworld.ca

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WE ASKED ? ? ?

AND YOU RESPONDED:

Compiled by Shawn Lawrence

READERS RESPOND

The countdown is on for this, the ninth Canadian National Biotech Week celebration. In keeping up with the festivities, Biotechnology Focus continues to do its part in raising awareness around the sector by turning to you, our readers, for your feedback. Like our previous surveys, most of the questions that we posed to our readers focused on the success stories in the Canadian biotech and life science sector. However, some of our questions went a step further asking what our readers thought about Canada’s place on the global biotechnology stage. In tallying your responses we wanted to keep it short and simple. Our goal really was to encourage dialogue, to see what is and what isn’t going right within the sector, and most importantly, to encourage creative lines of thinking in the betterment of the sector collectively.

Generally speaking, the feedback we received was quite positive. For starters, we posed the question to our readers what was the biggest news story in the sector for 2012. Answers varied but the big one seemed to be re-energization of our venture capital ecosystem coupled with the rebound in financing. Particularly our readers said it was great to hear about new VC funds in the marketplace, where pharma companies such as Pfizer, Merck, GSK and Eli Lilly managed to launch new funds alongside VC partners such as Lumira Capital, Teralys Capital and others. Likewise, our readers noted that Canada’s business development bank, BDC, provided $20 million of the $150 million raised by

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READERS RESPOND

TVM Capital for a new Canadian life science venture capital fund. Pointing to a rebound in funding, respondents also discussed the 53 per cent increase in financing highlighted in Ernst & Young’s Beyond Borders Report. And of course there was the biggest biotech deal in recent Canadian history, the billion dollar acquisition of Enobia Pharma

by Alexion.

Yet in mentioning the good, one cannot forget the big bad stories of 2012. Specifically the failure of Aeterna Zentaris and its lead offering, perifosine, (which in April failed to meet its primary endpoint) as well as the changes at Cardiome, a company who just this month reduced its workforce by 85 per cent as a response to the recently announced termination of Merck’s development efforts relating to the vernakalant oral program.

Focusing on the components of Canada’s bio-economy According to BIOTECanada, the three primary components of Canada’s bioeconomy are health, industrial processes and agriculture. We tried to follow the same type of approach with this survey. More specifically, we chose to break down the next portion of reader’s responses into two categories. In the first category we lumped the drug discovery, therapeutics, biomedical and devices under health sciences sub sectors together. In category two, we combined agriculture, food, bioindustrial and environment as one.

In the Drug Discovery, Therapeutics, Biomedical and Devices category, the first question we posed was whether or not they felt Canada was an international leader in these collective fields. In all, just 38 per cent said yes, with 48 per cent of the no’s saying that it had the potential to be one under the right circumstances.

As for those right circumstances, our readers had many suggestions beginning with the idea that Canada needs to forge for itself a globally competitive IP regime.

This IP regime would need to function with a mandate of keeping Canada’s private and public sector entrepreneurs at the forefront of development and commercialization.

Moreover, rather than being divided geographically and competing with one another, we should strive to compete together.

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One example given was the Life Sciences Corridor which was forged between Ontario and Quebec last year which continues to grow together. To build a broader more national corridor partnership, Canada needs to build for itself a national vision on biotech where we consolidate our expertise and infrastructure instead of duplicating it in each province. As one respondent put it, without a national vision our progress will be incremental at best.

Respondents in both categories provided some strong commentary also on how we could improve upon our global ranking, and figuring out ways to succeed together with less money. This means finding innovative models to take health products through the innovation pipeline towards commercialization. In fact, such models are seemingly already being explored, with industry, government and academic collaborations and partnerships some starting out early on in the research phase. Indeed with the continued downsizing in large pharma there is growing trend towards turning to academia for industry/academia collaborations thus improving the odds of moving from the laboratory to the marketplace.

Returning to the first question posed to the healthcare side, we asked the same question to the Agriculture, Food, Cleantech, Environmental and Industrial sectors collectively, 34 per cent of which said Canada was a world leader in these fields.

As for what’s holding Canada back, these readers felt there was plenty intellectual capital being generated by innovative researchers and companies in these fields, yet a poor regulatory system in place restricting the adoption of new products. Thus, our readers are calling for the streamlining of the regulatory system with greater cooperation among and between government departments. Moreover, like their counterparts on the healthcare side, readers from these sectors are also seeking the launch of a national strategy when it comes to the bioeconomy. In agriculture for example this means a full supply-chain analysis, working with feedstock producers, If there’s one thing our readers want government or the general public to know, biotechnology is increasingly becoming an area of major importance and investment throughout the world, and Canada can’t get

left behind by the pack. Put simply, there is great potential in Agriculture and Agri-Food to be large contributors to our economy, likewise there are huge opportunities that come with the global movement away from only bioenergy and greater focus on value-added biochemicals and biomaterials – areas where Canada, specifically, the Sarnia, ON area are leaders and where large, multinational conglomerates such as BP, ExxonMobil, Chevron, Petrobras, Procter & Gamble, Mitsui, Coca Cola, and L’Oreal are making their presence felt. So it only makes sense that Canada needs to follow the money and support this sector.

Canada has other ulterior reasons to support the biotech industry. For starters, Canada is home to one of the world’s harshest growing climates in the world. The benefits to weatherproofing food and nonfood crops for example through periods of drought and heat stress, ensuring abundant, consistent and cost-effective harvests (yield) for farmers and biofuel feedstock suppliers alike. Weatherproofing plants means using specific gene-based technologies to protect crops from various weather stressors, resulting in better yield in every growth season for example.

Top priorities to get before government Many of our readers shared suggestions directly related to financing and finding new ways to support our SMEs. Such ideas like expanding IRAP and SR&ED tax credits (which unfortunately were scaled down in the recent budget) or just opening up crowd-funding as one item to support financing of SMEs were all referenced.

Likewise the topic of procurement and that Canada should consider employing strategic procurement in public sector spending as a lever to drive innovation, productivity, competitiveness and economic growth was very popular amongst our readers. This means that we need a healthcare system and other industries such as agriculture, chemical, etc. that recognizes Canadian Innovation through purchasing these same respondents discussed reforming Canada’s intellectual property regime to help attract investments and support businesses in Canada and gain global mandates as part of the CETA negotiation.

READERS RESPOND Another hot topic or priority that always seems to be mentioned in our surveys, but is never followed up on by government, is the expansion of flow-through tax credits to investors in small biotechnology firms. Again, the idea of flow-through shares – now used by resource companies – is to help companies reach the stage of commercialization when they have high capital needs but few revenues. Flow-through shares allow companies to transfer tax deductions to investors, who can then use them to lower their personal or corporate tax.

Public support for biotech If there is one thing that rivals cash flow when it comes to the biotechnology industry, it is raising public awareness about its benefits. The theory goes if you can get public opinion behind the industry, you just might get government to support it. As such some readers’ recommendations included raising public awareness through social media campaigns. Moreover we need to make the real success stories of biotechnology much better known. Essentially reward winners in a more visible manner.

At the same time the real scientists need to learn how to present their advances to the public in a non-threatening way, emphasizing the benefits while being upfront about both the potential risks and benefits.

With more awareness, more people will appreciate the hard work being done and continue to support these important industries.

What’s clear from your responses is that Canada’s biotechnology sector plays a role every day in our daily lives. Canadian Biotechnology companies are unleashing an array of invented, developed and commercialized Canadian products for the world to covet.

On a grander scale we need to do a better job of conveying that our pharmaceutical R&D, and that of most drug companies, improves patient outcomes while at same time reducing cost of providing care. And since Canadians are not the only people wanting improved care, we as a country may as well be an exporter of these technologies, instead of only an importer. Likewise, The government needs to emphasize the impact that Canada has on agriculture on the world stage related to innovation from plant development to machinery.

There are also calls to continue to support education programs from K-12 and undergraduate programs in science. Start at the ground level; invite scientists to speak at elementary and high schools. The scientists would love the opportunity, and it would begin to generate awareness in children that will hopefully foster long-term interest and awareness.

The Big Picture What’s clear from your responses is that Canada’s biotechnology sector plays a role every day in our daily lives. Canadian Biotechnology companies are unleashing an

array of invented, developed and commercialized Canadian products for the world to covet. Whether it’s in the healthcare space with the development of new therapeutics, vaccines, diagnostics and medical devices and vaccines, or working to address global health, economic, and environmental issues, Canadian researchers and companies are doing their best to compete globally.

We all have to work together and play our part to advance innovation and optimize health outcomes. This includes taking part in activities such as National Biotech Week, or more specifically, making your presence felt on September 18 and participate in National Advocacy Day in Ottawa We’d like to thank those of you who took the survey and for sharing your stories with us.

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

Biotech Blast in Saskatoon

SEPTEMBER 2012 BIOTECHNOLOGY FOCUS 11

By Andrew Casey

NaTIONaL BIOTEcH wEEK

CANADA’S BIOTECH INDUSTRY

I

n a post-recession economy, the need for Canada to remain globally competitive has never been more important.

Central to Canada’s ability to emerge in a competitive position from the recent economic downturn will be the ability of traditional industries, and the manufacturing sector more broadly, to reengineer themselves and compete in the emerging bioeconomy. And if Canada’s economy is to successfully reengineer itself, it will heavily depend andrew casey on a healthy and President and cEO, innovative biotechBIOTEcanada nology sector. But Canada can go beyond simply competing, with the right partnerships and strategic investments it can become a world leader.

Despite the recent economic downturn, Canada’s bio-economy has grown 12 per cent over the past four years and now stands

BIOTECH SOLUTIONS ABOUND Through the recent economic downturn, Canada’s biotech industry has become an essential component of the transformation and redefining of many traditional economic cornerstones including forestry, energy, aerospace and other manufacturing industries. In partnership with these other sectors, the biotech industry has helped position the Canadian economy as a leader in the emerging global ‘bio-economy.’ There is now a bio-based component in virtually

180.0 160.0 140.0

Billions $ CDN

THE CANADIAN BIO-ECONOMY EXPERIENCES 12% GROWTH OVER THE PAST FOUR YEARS

as an $87 billion per year driver, representing 7 per cent of national GDP. It is the foundation of the Canadian bio-economy that represents an employment network of one million people from coast-to-coast. All of this has helped stabilize the economy and establish the industry as a central part of Canada’s economic recovery and long-term growth. But the status quo is not enough, the industry must continue to re-invest and innovate to stay ahead of the competition in other nations. Industry must do its part, as must its other partners including governments at all levels.

120.0

+ 12 %

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Driving Canada’s Economic Transformation

all sectors of the economy in the form of improved products and processes.

Canadian biotech companies are developing sustainable bioenergy technologies to power cars and jet aircrafts. Renewable composite materials are now an essential component of virtually every aspect of our lives from transportation, to housing, to even food. Clean chemicals are being produced for use in clothing, lubricants and cosmetics along with a host of other consumer and commercial products. Canada’s industrial biotechnology companies are commercializing solutions to address existing and emerging global issues including, but not limited to, the need for renewable energy sources, issues of climate change, and environmental degradation. This is a rather significant attribute given the forecasted growth in global population and the pressures this will place on an already over-taxed land base and climate.

From resource management to renewing manufacturing technologies, from new medicines to healthier foods, from renewable energy sources to cleaner chemical production, biotechnology is driving vast levels of innovation into all elements of the Canadian economy. We are now at a point where biotechnology is an essential component that will facilitate the reinvention of numerous industries that will, in turn, ensure long-term competitiveness and create employment opportunities for our best and brightest. This new reality offers a distribution of economic opportunities across Canada, with a significant emphasis on regions of the country that have been particularly hard hit by the economic downturn.

INVESTMENT: IT’S ALL ABOUT ACCESS TO CAPITAL

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12 BIOTECHNOLOGY FOCUS SEPTEMBER 2012

2011

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However, if Canada is to capture a piece of the global bio-economy pie, it must maintain its competitive position globally.

Other leading industrial nations are mov-

CANADIAN

SCIENCE

POLICY CONFERENCE CALGARY ALBERTA

CSPC 2012

Honorary Conference Chairs Preston Manning President & CEO, Manning Centre for Building Democracy

Dr. Elizabeth Cannon President and Vice-Chancellor University of Calgary

CSPC 2012 Themes • • • •

Dr. Eric Newell Chancellor Emeritus, University of Alberta Former Chair and CEO, Syncrude Canada Ltd.

Innovating on energy supply and demand for more sustainable resource management: a critical test for the integration of science, technology and policy Re-imagining Canadian Healthcare: How innovation in science and policy can contribute to a more sustainable system Food, Fuel and Farmers: Agriculture at the convergence of multi-disciplinary science policy issues Science-Technology-Society-Nexus 21 Panel Sessions | 80 Speakers 3 Days of Conference, Workshop: Science Policy 101 Info@cspc2012 | www.cspc2012.ca | @sciencepolicy

NaTIONaL BIOTEcH wEEK

THE $87.3 BILLION CANADIAN BIO-ECONOMY BY SECTOR

ing aggressively to position their respective bio-economies at the forefront of the next generation of economic growth. Canada must keep pace or it risks being left behind.

Presently, equity and risk capital investments in Canada’s biotech and life sciences industries are behind what is being invested south of the border. Looking ahead, access to capital will be central to the biotechnology sector’s ability to undertake research and bring new products and processes to commercial development. Capital will always gravitate to where the returns on investment are the greatest and fastest. Recognizing this, a number of countries have implemented aggressive investment strategies, providing their respective biotechnology sectors with a competitive advantage in accessing capital.

In April 2012, the Obama administration launched the National Bio-economy Blueprint, a national strategy to increase research capacity, cut regulatory hurdles, and identify opportunities where the U.S. can be competitive. Similarly, the European Commission recently adopted a bio-economy strategy with a clear focus on innovation for environmental sustainability. Canada is clearly facing significant competitive international pressures to keep pace. If we are to remain competitive in this regard, industry and governments must keep step with what other countries are doing to spur the commercialization of their biotech and life sciences technologies.

The Federal Government has undertaken meaningful initiatives to ensure Canada’s tax system remains competitive with those found in other jurisdictions. Canada’s SR&ED program is one of the most gener14 BIOTECHNOLOGY FOCUS SEPTEMBER 2012

ous tax credit programs in the world and is a catalyst of risk capital formation from foreign sources. Leading industrialized countries including Australia and France have recognized the spin-off benefits of investing in R&D tax credits and have recently made significant improvements to their respective programs. In order to ensure Canada retains a competitive edge in attracting foreign direct investment and growing domestic research and development capacity, the SR&ED program should be examined with an eye to ensuring that it remains a global leader. In addition, the SR&ED program supports downstream sectors in the R&D value chain including manufacturers of plants, machinery, equipment, and raw materials processors. Increasing the eligibility criteria of SR&ED will boost the competitiveness of attracting risk capital from foreign sources and will have a significant positive impact on supporting sectors of the innovation economy.

Biotechnology must remain at the leading edge of innovation, but it will not happen in isolation. Canada has made significant progress in securing important building blocks for a growing bio-economy. But the need for coordinated actions from all parties remains. By working together, industry and governments can set in place a competitive market framework that will attract research investment and deliver the rewards of commercialization.

PUBLIC POLICY: WEAVING THREADS INTO WHOLE CLOTH While much has been done to support the growth of Canada’s biotech industry, more can be done to foster a vibrant biotech sec-

tor. Given the diverse nature of the industry, it is not entirely surprising that government policy has grown equally fragmented in response. Depending on the process or the product, biotech companies can be subject to a number of overlapping and duplicative policy regimes. At the federal level alone, the industry falls under the mandates of no fewer than six departments including Industry, Health, Finance, Agriculture, Environment, and Natural Resources. Understandably, this can lead to duplication and confusion for both industry and government, something that will simply compound itself as the industry continues to grow and extend its reach further into the economy.

With so many industries and sectors depending on biotech, it is imperative that industry and government work together to develop a strategic and coordinated public policy framework in support of the industry, its products and investments.

The outlook for the Canadian bio-economy is promising. The Canadian economy was not as hard hit by the global recession as other industrialized nations were. Moreover, many sectors took advantage of the economic downturn to begin the process of reinventing themselves and preparing to compete globally in the very promising bio-economy. Canada’s biotech sector has grown to be a core element of that transformation. There remains significant opportunity ahead for the industry and the economy more broadly. However, the industry and government must move swiftly and strategically if we are to get and stay ahead of the competition. With the right elements in place and a clear commitment to future growth and expansion, there is no limit on what Canada can achieve over the next 25 years.

Andrew Casey is President and CEO of BIOTECanada. BIOTECanada is the national industryfunded association with over 250 member biotechnology companies representing health, industrial, and agricultural sectors.

For more NATIONAL BIOTECH information visit our BEST PRACTICES Web Portal at www.bioscienceworld.ca

Compiled by Toby Fyfe, editor-in-chief Canadian Government Executive

Q&a wITH MINISTER OF STaTE

SCIENCE SOLUTION: The Business of Innovation

Minister of State, Science and Technology Gary Goodyear

T

here is little doubt that the federal government is reshaping the public service. For example, Ottawa is getting out of areas of provincial jurisdiction and easing up on its regulatory role. In science, government is also looking in new directions, driving innovation and contributing to national prosperity with an emphasis on creating value through the private sector. In June, Gary Goodyear, Minister of State, Science and Technology spoke with Biotechnology Focus sister publication Canadian Government Executive’s editorin-chief Toby Fyfe outlining this strategy and what it means for industries such as the life sciences going forward.

Q

What do you see as the connection between innovation and national competitiveness?

Well, I think when you compare us to our peer nations, Canada has some of the top post-secondary institutions, a well-skilled labour force, and, according to some experts, far too many programs that help Canadians and businesses succeed. That said, though, we are in fact number one in a number of areas, and that’s good news story.

But we’re not number one in some areas that are very important. We are not number one in business expenditure on research and development. We’re trying to identify those reasons and assist business by making changes both in the programs and how we do business as a government to close those gaps; to, in fact, literally create the environ-

ment and provide the tools with which businesses can better succeed in a changing global environment.

Q In Budget 2012, a theme related to science and innovation was that the government is going to make it easier for businessled initiatives and easier for the private sector to generate wealth by moving from indirect to direct support. Is the notion to move faster, more efficiently, or both?

I would say both. Right off the bat, the first priority is more efficiency. Obviously we want to make sure we return to balanced budgets. But time is of the essence in terms of innovative capacity. So we want to move there quicker than we were going ten years ago.

It is time that the government takes a role in encouraging businesses to recognize the

need to be innovative, and become, as a result, more globally competitive. Things have changed, markets have changed, and products have changed, so the majority of our Canadian businesses, while many do great research and development, could always do more.

Q Is it correct to say that the government’s short-term goal is to translate public research into knowledge for the private sector?

Well, the Expert Panel leading the Review of Federal Support to R&D led by Tom Jenkins said we had to find a better balance. There are far too many programs, which not only confuses business but also makes them accessible only to the few that do know about them.

The other identified issue was that we SEPTEMBER 2012 BIOTECHNOLOGY FOCUS 15

Q&A with Gary Goodyear needed to find a better balance between direct and indirect support. And we have had more investment in science and technology as well as a plan. Let me just tell you in very brief terms what that plan was. You will remember the Knowledge Infrastructure Program. Ultimately that program ended up being over five billion dollars spent specifically on improving infrastructure at our colleges and universities. The second thing we did, pretty much at the same time, was to provide three quarters of a billion dollars that had to be matched to the Canada Foundation for Innovation to put state-of-the-art equipment in those buildings. The third thing we did was fund to significant levels things like our Vaniers, our Banting post-doctoral fellows, the Canada Research Chairs, the Canada Excellence Research Chairs – those alone are $10 million over seven years.

You can see just briefly that we now have a brain gain. We have the equipment for those people to use in brand-new buildings across the country. We are now focusing on the other end of the spectrum. The balance, the natural next step for the nation, is to look at those areas where we can make sure that Canada and Canadians are getting the maximum benefits out of these tax dollars.

Q Are you concerned that the various players – the private sector, universities, the federal government, the provinces – could run the risk of becoming a highly fragmented system?

We all have areas to continue to improve on efficiency, but I will say that no perfect storm lasts forever. Over the past couple of years in the science and tech file, as well as the economic development file, what I have seen is a remarkable team effort. I believe I can say with fairness that the provinces are working hard with us, the universities and colleges are working hard with us, and now, as I say, our focus is the natural next step, the business side of the innovation and job creation section of this plan. And I have to tell you that I see folks working more and more side by side, working together, not competing against each other, but getting the bigger picture, working together as a team to compete against the world.

Q One of the concerns with this focus on direct, as opposed to indirect or pure science, is that we will lose pure science capacity in the long-term and possibly knowledge in the longer-term. Are you worried about that?

16 BIOTECHNOLOGY FOCUS SEPTEMBER 2012

Not in the least. The last time the nation faced a recession – nothing of this magnitude – we saw the governments cut science and technology. This government has taken entirely the opposite approach. We are now at historic levels of investment in all areas of science from the Perimeter Institute and the Institute for Quantum Computing in Ontario all the way through to Triumph and Neptune in British Columbia, as well as more funding for the next-generation medical isotopes and so on. We have a very strong respect for all levels of science, and why wouldn’t we? The economies of the future, whether it’s ten years from now or 50 years from now, will be bolstered by the discoveries from the investments we make today in basic research.

We have a very balanced approach, now approaching $12 billion per year in science and technology, the full range. I can tell you that when we took government, it was around $5 billion. So for every scientist, whether they’re applied or they run their own companies, or they are on the pure discovery end of something, there is more money for more work. In every spectrum. I don’t see that changing.

This government has provided funding for every level because we respect that those areas that are closest to market will help us now and we need to maximize that, and those areas that are furthest away, the pure, basic discoveries are, in fact, the power for commerce in the future.

Q What’s the cost to Canada if we can’t get better at innovation and performance?

The Institute for Competitiveness and Prosperity estimates the cost to our productivity differential with the United States at over $100 billion a year. I’m not talking about working harder; in fact, quite the opposite: working smarter, adopting the latest technologies, spending money on research, every single business in every sector finding new ways of doing things or new materials to be used in the product they’re making. A different way, for example, to do a procedure or a process. Working smarter and improving our productivity closer to where it should be could translate into ten to fifteen thousand additional income dollars for every family in Canada.

Some businesses say, well, the Canadian dollar has been a very good thing for me, or I’m doing okay – this is a common one that I hear – Canada’s doing okay, what is the need for us to push that envelope? And I

say to them, yes, Canada is doing okay, better than most, that’s a good news story. But the world is changing. And you need to be globally competitive. Your competitors are no longer across town or in the next town, they’re across the world.

So, to have businesses perform better in terms of researching and adopting new technologies, and finding new markets for interesting products and so on, can only lead to businesses growing and becoming stronger. And when we can move our new knowledge to our factory floors and make a product creating jobs and more prosperity here at home, we sell those new products and processes to the rest of the world. So that actually improves the quality of life of people around the world.

Q The Government of Canada has multiple departments and agencies involved with science. What steps must we take to make to make sure there is an integrated federal strategy among these players?

That is a very important question. With respect to whole of government and various levels of government, including academia and business, there should be an effort toward harmonizing those efforts and coordinating what is happening across the nation so we do things better, faster and at less taxpayer expense.

This is a process that starts with the National Research Council, changing it into a more business-facing organization that looks at some 60 programs across some 17 federal government departments and begins that process of coordination and harmonization.

I like to say that this is a video we’re watching, not one moment in time. We started in 2007 and here we are in 2012 with a great record and some clear measurable outcomes.

I am very hopeful that by improving the innovative capacity of the private sector we will see a very positive future.

Reprinted with permission, Canadian Government Executive June 2012, www.canadiangovernmentexecutive.ca

For more SCIENCE POLICY INFORMATION information visit our BEST PRACTICES Web Portal at www.bioscienceworld.ca

By Kalvin Reid

Intellectual Property FEATURE

CANADA’S

GAME CHANGER

W

hen it comes to the protection of life sciences intellectual property (IP) in Canada, the executive director of research and development at Amgen Canada believes that it is a factor confronting Canada’s ambition to be a global life sciences leader.

“Canada is losing ground on global R&D investment,” says Dr. Clive Ward-Able. “We must find a way to turn that around.”

One of Canada’s shortcomings is an IP policy framework that lags behind other nations, putting us at a disadvantage when competing for a share of the estimated $100 billion that is invested annually in pharmaceutical research around the world.

As negotiations progress towards the completion of the Comprehensive Economic and Trade Agreement (CETA) with the European Union (EU), there is renewed hope in Canada’s research community that stronger IP standards are on the way as part of the deal.

But negotiating competitive IP rights in a free trade agreement is generating considerable concern among certain factions, notably anti-trade activists and the generic drug industry.

Ward-Able says that a strong, stable and consistent set of parameters to protect the work that goes into R&D is critical to securing economic growth in Canada. Since R&D creates IP, the protection of IP plays an important role in the work done by the life sciences sector in Canada, and the benefits of that work are far reaching.

“Canada does perform good research,” Ward-Able says. “We can bring innovation to the world, but it’s also about attracting investment into our country. When that investment comes, a lot of the skills and expertise it creates gets shared.”

Canada certainly has a lot of work to do to be competitive with the IP standards of our major trading partners, such as the EU, the United States and Japan. For example, among G7 nations, Canada is the only one that does not provide any form of patent term restoration to compensate for patent time lost during the lengthy approval processes and clinical trials.

International investors will put their money where they have the best chance to recoup their investment, and competitive IP safeguards are a significant factor in their decision making.

SEPTEMBER 2012 BIOTECHNOLOGY FOCUS 17

Intellectual Property

Attracting research is becoming very competitive globally. Companies are looking at many factors that differentiate one country from another when it comes to placing resources and investment, including the cost, speed and quality of the research and also the ability to recoup those costs over a longer period of time.

“If you don’t have good IP protection, you can anticipate less R&D investment,” says Ward-Able. “Many nations around the world are realizing that the more R&D they do in their country, the more benefits there are for everybody. So many countries are strengthening their IP policies to attract more research dollars, particularly from multi-national companies.”

Canada wasn’t always in this position.

There was a time when our domestic policy environment encouraged investment in pharmaceutical development, and Canada was a real player in the competitive global race for research funding.

CETA is a tool, say researchers, which will help swing momentum back in Canada’s favour.

The wide-ranging free trade agreement is a priority for Canada’s government. International Trade Minister Ed Fast often asserts liberalized access to a market of 500 million people in the EU, the world’s biggest single market, will mean a $12-billion boost to the economy and the creation of 80,000 new jobs.

Canadian officials are hoping CETA can be finalized by the end of the year, as the parties have already agreed on many key issues. But among the sensitive issues remaining on the table is the strengthening of Canada’s life sciences IP standards.

The EU position is to bring IP safeguards 18 BIOTECHNOLOGY FOCUS SEPTEMBER 2012

“Upgrading Canada’s IP policies will promote innovation and investment from global markets, a critical step in building Canada’s knowledgebased economy,”— Russell Williams in Canada to the same level as its own by extending protection of clinical trial data from eight to 10 years, introducing patent term restoration, and creating an effective right of appeal for innovative pharmaceutical companies in patent invalidity proceedings.

From the perspective of Canada’s Research-Based Pharmaceutical Companies (Rx&D), CETA presents an excellent opportunity for Canada to take a bold step forward. The economic advantages of more liberalized trade with the world’s single largest free market are obvious to most Canadians.

But equally important is the economic and healthcare benefits that come with competitive IP safeguards – a notion supported by 75 per cent of Canadians according to a July 2012 Nanos Research poll.

“Upgrading Canada’s IP policies will promote innovation and investment from global markets, a critical step in building Canada’s knowledge-based economy,” says Russell Williams, president of Rx&D. “When Canadian life sciences companies innovate, they improve the lives of individuals and families across this country. The aim of life sciences is to develop new treatments that result in better health outcomes, thereby contributing to health system sustainability and saving lives.”

It has been a generation since Canada engaged in any kind of meaningful improve-

ments to its patent policy. Back in 1987, Prime Minister Brian Mulroney strengthened patent protections as part of his government’s effort to stimulate the economy by encouraging job creation and investment in R&D. In the 25 years since then, pharmaceutical R&D investment has increased 1,500 per cent, from $93 million in 1987 to more than $1.3 billion in 2010.

According to Williams, this translated into improved healthcare for Canadians while creating good-paying high-tech jobs, stimulating the economy and making Canada more competitive in life sciences. The strategy worked, but other countries have continued to improve IP and investment in Canadian R&D has declined in recent years.

“Interestingly, the arguments we are hearing against CETA today were the same arguments used by critics 25 years ago,” says Williams. “But they were wrong back then, and they are equally wrong today. The historical impact of better IP is clear.”

The hope in Canada’s research community is CETA will help turn the tide of declining investment and allow Canada to re-establish itself among the global leaders in life sciences innovation.

Adopting the standards in place in the EU will position Canada to attract not only international dollars, but also the top minds

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Intellectual Property

L: Dr. Clive Ward-Able, executive director of research and development at Amgen Canada. Photo courtesy of Amgen Canada. R: Neil Maresky, vice president of scientific affairs with AstraZeneca Canada. Photo courtesy of AstraZeneca Canada. who are seeking a productive and supportive environment where their work makes a difference.

“Intellectual property is the cornerstone of our business and of applied research,” says John-Michel T. Huss, president and CEO of Theratechnologies. “We want to make sure whatever we discover benefits people.

If it is increasingly expensive and takes a prohibitively long time to commercialize, then investors won’t be willing to expend the capital necessary to fund the research.”

For small biotech firms like Montréalbased Theratechnologies, it is vital that Canada be more competitive for international life sciences investments.

Huss says small biotech firms are the future of pharmaceutical development, but they need investor support to realize their full potential.

“If we don’t have strong IP, we simply

The innovative pharmaceutical industry employs more than 12,000 Canadians in more than 50 companies located across Canada, in addition to even more indirect jobs across the country in universities, charitable organizations, research agencies, and in healthcare.

These are the types of jobs upon which economic growth can be built. At Theratechnologies, all 30 employees are university-educated, and roughly half of them have PhDs. However, if Canada continues to allow its IP regime to erode relative to the world, those jobs will begin to evaporate. In fact, it has already begun.

AstraZeneca Canada has experienced firsthand the effect of Canada’s weak IP safeguards. Recent court decisions have undermined confidence in Canada’s enforcement regime and created unacceptable uncertainty for pharmaceutical companies.

“Adopting the standards in place in the EU will position Canada to attract not only international dollars, but also the top minds who are seeking a productive and supportive environment where their work makes a difference.”— Russell Williams won’t get investments,” he says. “Small biotech firms are completely dependent on outside investors to raise money for R&D. But if you have weak IP, you won’t raise any money, and without the funding we won’t be able to develop new drugs.”

Not only would stronger IP inspire a wave of innovation in the development of new drugs, but it would drive economic development.

20 BIOTECHNOLOGY FOCUS SEPTEMBER 2012

The launch of generic products mimicking AstraZeneca drugs prior to patent expiry have led to job losses and a decline of AstraZeneca’s R&D investments in Canada.

“We have experienced dramatic and immediate market erosion because of weak IP enforcemen here in Canada,” says Neil Maresky, vice president of scientific affairs with AstraZeneca Canada. “This sends a strong message globally that Canada does not protect patents

effectively and therefore is no longer a stable market in which to invest.”

Enhanced IP safeguards are fundamental to reversing that trend and propelling Canada back as a world leader, attracting and retaining world-class medical researchers and creating a knowledge-based economy essential to driving economic prosperity.

A key part of that is rejuvenating clinical trials in Canada, which are known to create a culture of excellence wherever they are carried out.

“Canada possesses a critical mass of worldclass universities and research hospitals with the ability to lead global clinical trials,” says Maresky. “But Canada is facing significant challenges. As the cost of clinical trials climbs relative to countries in Eastern Europe, South America and Asia, Canada’s lagging IP regime makes the business case for investing that much harder.”

Strengthening Canada’s IP is a key factor in encouraging global corporations to invest in early and late stage research in Canada, says Maresky. And that means more clinical trials that bring with them broad benefits beyond the pharmaceutical industry.

“Clinical trials allow patients involved to be the first to benefit from new medical breakthroughs,” Maresky says. “They also provide important scientific opportunities for Canadian researchers and medical practitioners to develop expertise and advance their knowledge.”

In short, all of Canada benefits when a policy framework is put in place to encourage more research, more innovation and more international investment.

Huss agrees with the assessment that Canada is currently losing ground on the international stage. More competitive IP could be a game changer, and would help to elevate Canada’s status to a global leader.

“If we align ourselves and do the right things with good researchers, good physicians and good pharmaceuticals, we can put Canada back on the map,” Huss says.

“It’s an increasingly important industry that improves the local, provincial and national economies.”

“Health should be a strategic concern for all nations. Canada is not competitive and it should be. It can be.”

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

By Daniela Fisher

All photos courtesy of Clinical Trials Ontario

Across Canada

Clinical Trials Ontario: cultivating Ontario’s clinical trials landscape

G

etting a multi-site clinical trial approved in Ontario can be a time-consuming and headacheinducing task. Currently, multisite clinical trials need to be approved at every site participating in the clinical trial, which may be between five to 20 sites in Ontario alone.

Moreover, the reviews from independent institutional ethics committees may have different requirements for approval that can be inconsistent with one another. An inefficient approval process is in part the reason why Ontario is experiencing a drop in the number of global pharmaceutical companies basing their trials in Ontario.

In a move to stop the clinical trial dispersion, a new non-profit organization Clinical Trials Ontario (CTO) has been established to make Ontario a more attractive jurisdiction for drug development, by reshaping the province’s clinical trials infrastructure landscape.

With an end goal of making Ontario more competitive globally, CTO aims to streamline the ethics review process and the con-

tract approval for industry-driven multi-site trials, without compromising the province’s ethical standards. CTO also intends to work with industry, research and government partners to gain access to global clinical trial leadership, as well as launching an initiative to explain the potential advantages of clinical trials to the public, as well as patients and their families.

“The idea behind Clinical Trials Ontario is to modernize and reform the clinical trials infrastructure associated with getting initial approval to conduct a clinical trial, and maintaining ongoing ethics approval while ensuring the highest standards of research ethics” says CTO’s Interim Executive Director, Dr. Ron Heslegrave. “We’re fundamentally changing the process.”

The redesign is much-welcomed by researchers and companies alike. It is also much-needed, as Ontario has experienced a 10 to 12 per cent annual loss of global clinical trial activity in recent years.

As pharmaceutical companies veer towards countries that offer larger tax breaks for clinical trials, or maintain quality at

cheaper costs in developing nations, Ontario is losing its appeal as a drug development location.

To combat this, CTO was launched at the 2012 BIO International Convention, through the Ministry of Economic Development and Innovation (MEDI). The not-for-profit is a part of Ontario’s Life Sciences Commercialization Strategy. As an independent corporation, CTO is currently receiving funds from the Ontario provincial government, with hopes to eventually be financially selfsustaining.

Although the organization was recently launched in June 2012, CTO has been in the works for a number of years. From 2008 to 2009, the Ministry of Research and Innovation and the Ministry of Economic Development and Trade, which became MEDI in 2011, set up two task forces to look at the clinical trials crisis. For Dr. Heslegrave, who was on the second of the two task forces, the main issue was improving Ontario’s competitiveness through superior efficiencies in infrastructure without reducing the safety for patients.

SEPTEMBER 2012 BIOTECHNOLOGY FOCUS 21

Across Canada

“Right now, we have many voices in Ontario,” says Dr. Heslegrave. “We want Clinical Trials Ontario to be a single hub for this increased efficiency and a single voice for Ontario at the national level.”

“We had six recommendations to the Ontario Government - MRI at that point - with regard to how we can improve our competitiveness in the clinical trials area, including things like the need for such infrastructure reform. The ministry accepted three of those recommendations in their 2010 Commercialization Strategy for Ontario.”

From the commercialization strategy, a clinical trials stakeholder association was formed to create CTO. With his wealth of experience in the field obtained by chairing various boards, including the University Health Network, the Ontario Cancer Research Ethics Board, and leading the Harmonization Task Force for the Toronto Academic Health Science Committee, as well as working with various provincial, national and international initiatives, Dr. Heslegrave was selected to lead this new initiative.

He explains how CTO put together a Strategic Plan to streamline the clinical trials process that will make the processes more uniform and efficient, while preserving safety and maintaining the highest standards for ethical oversight of clinical trials – a plan approved by the Ministry of Economic Development and Innovation which has led to three years of funding.

“Right now, we have many voices in Ontario,” says Dr. Heslegrave. “We want Clinical Trials Ontario to be a single hub for this increased efficiency and a single voice for Ontario at the national level.”

The organization has three pillars in place 22 BIOTECHNOLOGY FOCUS SEPTEMBER 2012

to help the province become more alluring for drug investment. The focus is on making the system more efficient. Currently for multi-site trials in Ontario, pharmaceutical companies must go throw an approval process for each trial site, which can fast become a headache.

“In a five site multi-site study in Ontario, you have five different ethics boards that can have five different opinions,” says Dr. Heslegrave. “But they may be contradictory to one another, so it becomes very time consuming to sort this out and sometimes the differences between boards cannot be resolved. It’s very inefficient and costly.”

Whether two trial institutions or 20, companies need approval from each institution, which Dr. Heslegrave says, is an outdated system.

“This is the way clinical trials have been done for years, and it made sense when research was primarily conducted at a single site. It doesn’t make sense in the way clinical trials are conducted globally now, because most trials have multiple sites all over the world, and you need approval from each site before you can actually start to run the trial at that site. Inevitably, sites that are slower to approve the study may end up not being able to participate in the trial due to the competitive nature of patient recruitment across the entire study globally.”

Other jurisdictions like the US and Europe are moving towards reforming their system.

Ontario needs to do the same but better.

Streamlining the research ethics approval process to a single review in Ontario, along with other administrative platforms, is strategic pillar one for CTO. Its second pillar looks at collaborating with industry, government and investigators to market Ontario to the global headquarters of companies.

“Decisions on where to place clinical trials globally are made by global headquarters,” explains Dr. Heslegrave. “Local company subsidiaries in different countries, like

Canada, must lobby their global decision makers to attract clinical trial sites to their jurisdiction.”

“In other words, Pharma Company X (Canadian division) would be lobbying Pharma Company X Global to try to obtain global approval for a number of trial sites in Canada and Ontario. To be successful, local subsidiaries need to sell the value of the local jurisdiction. CTO intends to reform the clinical trials infrastructure to be more competitive in this regard.”

From global to local, CTO’s final pillar targets increasing patient recruitment, by getting Ontarians engaged in trials and educating the public on the health and social benefits of participating in clinical trials.

“Canada has been a poor recruiter into clinical trials for a number of reasons,” says Dr. Heslegrave. “One of those reasons is that in Canada the public does not fully understand the value associated with clinical trials.”

While still in its infancy, Clinical Trials Ontario is working with the various sectors of Ontario’s life sciences, from biotechnology and medical devices to pharma, as well as with business leaders and academics, to improve the health of patients in Ontario.

“We encourage Ontarians to think positively about clinical trials in order to gain access to innovative and new therapy, and to help us move towards solutions for improved therapies for many of the diseases that haunt us every day.”

We wish them best of luck, in helping fight disease, and putting Ontario back on the drug development map.

For more CLINICAL TRIALS ONTARIO information visit our DRUG DISCOVERY Web Portal at www.bioscienceworld.ca

By Heather Fraser Life Sciences & Healthcare Leader, IBM Institute for Business Value

sPoTlIghT

PHARMACEUTICALS: THE ROAD AHEAD

I

t is detrimental for any industry to be stuck in a rut. Take for example the pharmaceutical and life science industry. This industry as a whole has resisted developing new business models.

The end result: declining research and development (R&D), expiring patents on blockbuster drugs and therapies, shrinking sales forces and increasing demand from customers and payers for more innovative products.

The industry is now at a crossroads. Its business model looks dated in a healthcare ecosystem that is changing dramatically. So how should companies respond? Should it be business as usual, with a possibility of fading into insignificance? Or should companies completely rethink their ways of engaging with all the stakeholders in an effort to flourish anew? In today’s increasingly complex and fast changing environment, business model innovation is critical to success.

To compete more effectively, the industry

must develop new business models, fuel innovation in R&D and drive greater discovery. The way forward involves developing strategies in support of advanced therapies and technologies; maximizing development by integrating modeling and simulation with clinical trial programs; using social networking to connect globally to gather insights; collaborating more effectively throughout the company, and with partners and suppliers. Those who choose to engage more fully in the healthcare ecosystem and drive outcomes with solutions that extend ‘beyond the pill’ will play a new and transformational role.

For instance, pharmaceutical companies could investigate how to augment their lifesaving products with services that complement them. A recent University of Alberta research initiative demonstrates how scientists there used software to study elderly clients who volunteer to stay in an independent living suite at the local rehabilitation facility. The suite is instrumented with sensors

and equipped with smart devices collecting information about their daily activities. A key part of the study was focused on ensuring these elderly patients correctly took their prescriptions.

The data is used to make better use of healthcare resources, enable remote collaboration among providers and contribute to early intervention and long-term management of chronic diseases. This type of innovative research can be used to extend the length of time seniors are able to live in their homes.

To truly thrive and innovate, pharmaceutical companies need to make a similar transition by taking on a larger role in helping patients with their healthcare, and in the process, open up new market opportunities.

This would mean forming partnerships with insurers and healthcare providers to promote adherence to prescriptions. By creating services related to its life-saving products that help patients deal with their illnesses and reduce discharge times, or eliminating the

SEPTEMBER 2012 BIOTECHNOLOGY FOCUS 23

Spotlight To truly thrive and innovate, pharmaceutical companies need to make a similar transition by taking on a larger role in helping patients with their healthcare, and in the process, open up new market opportunities. need for hospitalization altogether, pharmaceutical companies could be seen as custodians of health.

As such, pharmaceutical companies can be key players in a society that demands increased value in healthcare, safer solutions, better outcomes, sustainability and accountability. But to achieve this degree of efficacy, the industry needs to become more instrumented, interconnected and intelligent – in a word smarter.

We see five fundamental truths that will drive the industry to a more integrated and collaborative model:

1. Loners will be losers R&D teams must find ways to collaborate and share intellectual property, compounds, data including clinical, safety and outcomes.

Working more closely with the payer and provider community is key to solving the enormous global healthcare challenge. It is no longer simply about how any one company can solve a given problem, but rather how it can best leverage those around to work together to find solutions and solve problems in a distinct and repeatable manner, i.e., sustained market leadership.

2. Outcomes will drive the dialogue The days of sample drops and robotic delivery of canned messages from sales reps are gone. Relationships with healthcare providers, payers and patients will be based on trust, value and outcomes, which will be managed through a variety of channels.

Whichever business model your organization chooses, its success will become largely dependent on maximizing outcomes of the individuals who use its products and/or solutions. If your business is not able to consistently provide evidence that its products and/or solutions provide positive outcomes for the identified patients, it risks becoming a low-margin commodity business.

3. Bring down the data walls In a highly interdependent healthcare ecosystem, it is essential to be able to share and analyze information. Combining and mining vast quantities of data uncovers clues that

24 BIOTECHNOLOGY FOCUS SEPTEMBER 2012

would otherwise be impossible to detect across discovery, development, marketing and the supply chain. The data walls must enable sharing of data (e.g., electronic medical records), as leveraging the same internally focused data elements that the industry has for decades will no longer be sufficient.

Companies must also determine how to best gain true insights into the data they currently have, as many companies are currently data rich and insight poor.

4. Visibility is vital Integrated medical knowledge bases and real-time information will become the cornerstones of the new healthcare ecosystem.

Medical insight will be driven by both longitudinal and real-time streaming data that will enable a shift to proactive care.

5. Individual is paramount Helping people stay well, get well, and/or manage illnesses efficiently and effectively is the goal. Pharmaceutical companies must rethink their role in truly knowing and helping people.

As the industry continues to address its present challenges, it will need to look for new and smarter ways to squeeze value out of all its core business processes. Many core processes will need to be reassessed and redesigned to better align with the changing economic environment. Today’s economic environment has heightened the urgency for the development of sustainable business models, and the industry, with its conventional business model, is at the centre of the change. As a first step, it is time for pharmaceutical companies to re-examine their business models to enable innovation, keeping costs as low as possible and become a valued partner within the healthcare ecosystem.

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

nEW PRodUcTs Temperature transmitter Omega is launching a new series of stainless steel, non-contact infrared temperature transmitters, with max, min average and instant readings; peak or valley hold, re-

flected energy compensation, OPC server capabilities and a response time of 240 mS to 90 per cent. The OS151-USB series have a four to 20 mA output, compatible with almost any indicator, controller, recorder or data logger without specific interfacing or signal conditioning, and 15:1 or 30:1 optics.

Web: www.omega.ca/shop/pptsc. asp?ref=OS151-USB&flag=1 Tissue culture dish Phoenix is introducing a new line of EcoCellTM Dishes for tissue culture applications. The dishes can be used to grow difficult-to-attach and critical cells. With strong adhesion properties, the new line can improve cell viability and count by 10 to 30 per cent, depending on the cell type. They offer better light transmission from their unique design and allow for better imaging without hav-

ing to transfer the cells to a glass slide. EcoCellTM Dishes have environmentally-preferable technology, reducing the amount of plastic material needed to create the dishes. Made in ISO Class 5 cleanrooms, the dishes are certified sterile by additional gamma irradiation, non-pyrogenic, noncytotoxic and are DNase/RHase-free.

The scale’s rocker-pin suspension automatically aligns load forces for exceptional weighing accuracy; and its fully open channels and less surface area allows for faster and easier washdown in sanitary applications. The PTA669’s U-shaped platform simplifies the job of loading pallets and containers onto the scale. There are no ramps or pits, so the scale costs less to install, saves for space, and speeds up loading and weighing. PTA669 pallet scales are customizable to meet a variety of weighing needs. All models are available in capacities from 1,000 lb up to 5,000 lbs.

Web: www.mt.com/PTAx6x Multi-wavelength imaging Andor Technology plc introduces its new multi-

Web: www.phoenix-biomed.com Mettler Toledo introduces its new line of U-shaped floor scale products. Included within this line is the PTA669 stainless steel, low-profile pallet scale, ideally suited for the washdown environments found in the pharmaceutical and bio-gen markets.

wavelength imaging portfolio, made up of the TuCam, an advanced two camera adapter for simultaneous imaging, and Optosplit II, a dual emission splitter that divides an image into two separate spatially equivalent components which can be displayed side-by-side on a single camera sensor.

TuCam and Optosplit II feature fast, con-

SEPTEMBER 2012 BIOTECHNOLOGY FOCUS 25

nEW PRodUcTs compared to other laboratory systems, energy requirements can be high in order to maintain the very low temperatures needed for sample preservation.

current detection of two different fluorophores in experiments, and are compatible with Andor’s complete range of low light imaging cameras.

Web: www.eppendorf.com/freezers

Web: www.andor.com/scientific_ cameras/multi_wavelength_imaging/ High-throughput Thermo Fisher Scientific’s Dionex UltiMate 3000 XRS UHPLC system offers UHPLC capabilities in solvent delivery and sample handling, with a variety of detector options for highthroughput laboratories. UltiMate 3000 XRS has the lowest gradient delay volume and unmatched flow precision with accuracy unmatched flow precision with accuracy among all leading quaternary UHPLC platforms. The new system supports robust chromatographic runs with column pressures up to 1,250 bar (18,130 psi). Its new flow cell design, along with Viper connection technology, means lower resolution loss and peak dispersion. UltiMate 3000 XRS has high resolution chromatography, complimentary detection technologies, a flexible configuration and user accessibility for pharma, biopharma, environmental, food safety and chemical laboratories.

Web: www.thermoscientific.com/ exactiveplus

among all leading quaternary UHPLC platforms. The new system supports robust chromatographic runs with column pressures up to 1,250 bar (18,130 psi). Its new flow cell design, along with Viper connection technology, means lower resolution loss and peak dispersion. UltiMate 3000 XRS has high resolution chromatography, complimentary detection technologies, a flexible configuration and user accessibility for pharma, biopharma, environmental, food safety and chemical laboratories.

Web: www.thermoscientific.com/ uhplc-xrs High-throughput Thermo Fisher Scientific’s Dionex UltiMate 3000 XRS UHPLC system offers UHPLC capabilities in solvent delivery and sample handling, with a variety of detector options for highthroughput laboratories. UltiMate 3000 XRS has the lowest gradient delay volume and 26 BIOTECHNOLOGY FOCUS SEPTEMBER 2012

Freezers New Brunswick Scientific, an Eppendorf company, introduces its HEF® High Efficiency Freezer, the latest in a series of energy-saving ultra-low temperature (ULT) freezers. The new freezers consume up to 59 per cent less energy than competitive units and have a lower carbon impact on the environment. The ULT freezers are virtually never turned off,

Tips Eppendorf’s new Combitips advanced® offer safe, accurate liquid dispensing by positive displacement. The new tips have a colour-coded size system, elongated tips (size 2.5 mL, 5.0 mL, 10 mL) that completely empty standard laboratory tubes, a dispenser box with chute, and an extra purity grade of ‘Eppendorf PCR clean.’ They are available in nine sizes and can be used with any Eppendorf Multipette for precise pipetting of identical amounts of liquids in series. Combitips advanced® have hermetically-sealed pistons that

prevent contamination, and the positivedisplacement allows for high precision dispensing of problematic liquids, such as those with high density. The funnel geometry improves haptic feedback and stops damage to gloves. No slip agents are used in the manufacturing process, meaning bioassays can have better results.

Web: www.eppendorf.com Data logger Omega introduces a new battery-powered data logger that records input transitions or contact closures from external sources, including transducers and state initiators. A CE compliant product, the OM-CP-STATE101A has a 10-year battery life, 4 Hz reading rate, a multiple start/stop function and high speed download capability. Suited for HVAC, chemical and environmental applications, features also include a 406, 323 reading storage

nEW PRodUcTs capacity, optional memory wrap, optional protection and a battery life indicator.

Web: www.omega.ca/shop/pptsc. asp?ref=OM-CP-STATE101A&flag=1 Thermometer Omega launches its new wireless humidity and temperature monitoring and alarm system. The OM-CPTHERMALERT-RH has real time notification of humidity or temperature changes and has a user-programmable alarm that

is laboratories. The UH-X and UH-FX testers have a semi-auto-tuning function allowing for stress and strain control. They comply with ISO 6892-2009 and JIS Z2241 metallic testing standards and their control parameters are auto-tuned in real time based on test force and strain values during testing, which users can measure without specifying an amplifier range. Users can perform tests without a computer, by inserting a USB memory stick into the measurement controller, and test parameters will be automatically stored in the USB’s memory

and can be analyzed by Shimadzu’s TRAPEZIUMX software. Both UH-X/FX include 10.4 inch colour touch screens and display S-S curves in real time. They have a hybrid hydraulic-powered system that combines an AC servo motor with a hydraulic pump, which operates only when necessary, reducing power consumption by up to 82 per cent and requiring 50 per cent less hydraulic oil to run..

Web: www.ssi.shimadzu.com/products/product.cfm?product=uh-x_fx.

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sends a message by text, screen alarm or email if an alarm arises. CE compliant, it has wireless two-way communication, a precision RTD sensing component and a long-lasting battery.

Web: www.omega.ca/shop/pptsc. asp?ref=OM-CP-THERMALERTRH&flag=1 Cell culture media STEMCELL Technologies introduces its StemSpan™ ACF, a new animal component-free (ACF) and chemically-defined hematopoietic stem cell expansion medium. StemSpan™ ACF is the first complete medium for culture and expansion of hematopoietic stem cells that doesn’t contain any animal or human proteins, only containing recombitant and synthetic elements. It lets researchers study hematopoiesis and cell therapy development without transmission of adventitious agents from plasmaderived components, or have study results lack consistency between different lots of human or bovine proteins.

Web: www.stemcell.com/en/Products/All-Products/StemSpanACF.aspx

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Testing machine Shimadzu Scientific Instruments’ new user-friendly UH-X/FX Series offer hydraulic universal testing machines for high-precision testing control, with an environmentally friendly design that can reduce energy expenditure

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CALENDAR SEPTEMBER

OCTOBER

September 10-13

September 15-21

October 1-3

Innovations in Biomedical Materials Venue: Raleigh, NC Tel: 614-794-5829 Fax: 614-794-5882 Email: mmecklenborg@ceramics.org Web: http://ceramics.org

19th International Mass Spectrometry Conference Venue: Kyoto, Japan Tel: +55-19-3521-3073 Fax: +55-19-3521-3073 Email: eberlin@iqm.unicamp.br Web: www.imss.nl

AdvaMed 2012: The MedTech Conference Venue: Boston, MA Tel: 1-202-434-7213 Email: info@medtechconference.org Web: http://advamed2012.com/

September 17-19

Growing the Bioeconomy Conference 2012 Venue: Banff, AB Tel: 780-492-3236 Email: bioeconomy2012@ales.ualberta.ca Web: http://www.ales.ualberta.ca/ Bioeconomy.aspx

September 11-13 3rd Annual BioPartnering Latin America Venue: Rio de Janeiro, Brazil Tel: +55.31.3303.0012 Email: arthur@biominas.org.br Web: http://www.techvision.com/bpl/

September 12-13 BIO India Venue: Hyderabad, India Web: www3.bio.org/bioindia

September 14 OICR Technology Expo Venue: Toronto, ON Tel: filomena.venditti@oicr.on.ca Web: www.techexpo.events.oicr.on.ca

September 14-21 National Biotechnology Week Venue: Across Canada Web: www.imagenenation.ca

Pharmaceutical Strategic Alliances Venue: New York, NY Tel: (800) 332-2181 Email: custcare@elsevier.com Web: http://www.elsevierbi.com/mkt/ Conf/PSA/2012

September 19-21 BioPharm America Venue: Boston, MA Web: www.ebdgroup.com/bpa

September 27-29 Kamloops 2012 BCSLS Annual Congress Venue: Kamloops, BC Tel: 604-714-1760 Fax: 604-738-4080 Email: bcsls@telus.net Web: www.bcsls.net

October 2-5

October 3-4 BioContact Quebec Tel: 418-694-8778 Fax : 418 694-0614 e-Mail :lysbeth@biocontact.ca Web: www.biocontact.qc.ca/english/ default.html

October 4-5 Banff Venture Forum 2012 Venue: Banff, AB Web: http://www.banffventureforum.com/

Company & Advertiser Index COMPANY Page Website Ag-West Bio...............................................................................................................11..................................................................................................www.agwest.sk.ca Amgen Canada Inc...................................................................................................2........................................................................................... www.policymatters.ca Andor Technology...................................................................................................25..................................................................................................... www.andor.com BioPartnering Europe.............................................................................................31.................................................................................. www.techvision.com/bpfe BIOTECanada............................................................................................................12............................................................................................. www.biotecanada.ca Canadian Science Policy Conference..................................................................13................................................................................................... www.cspc2012.ca Children’s Miracle Network...................................................................................25......................................................................www.childrensmiraclenetwork.ca Eppendorf............................................................................................................. 32, 26......................................................................................... www.eppendorf.com Life Science Association of Manitoba..................................................................17........................................................................................................... www.lsam.ca Mettler Toledo..........................................................................................................25...........................................................................................................www.mt.com New Brunswick Scientific.......................................................................................26....................................................................................................... www.nbsc.com OBIO............................................................................................................................7.............................................................................................................www.obio.ca OICR.............................................................................................................................5.............................................................................www.oicr.on.ca/techexpo2012 Omega................................................................................................................... 25, 26................................................................................................... www.omega.ca Phoenix......................................................................................................................25................................................................................. www.phoenix-biomed.com POI Business Interiors.............................................................................................19.............................................................................................................. www.poi.ca Shimadzu Scientific Instruments.........................................................................27........................................................................................www.ssi.shimadzu.com STEMCELL Technologies.........................................................................................27................................................................................................ www.stemcell.com Thermo Fisher Scientific........................................................................................26..................................................................................www.thermoscientific.com 28 BIOTECHNOLOGY FOCUS SEPTEMBER 2012

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ThE lAsT WoRd

By Roberto Bellini

RAISING ORPHANS

T

Roberto Bellini, President and CEO, BELLUS Health Inc.

hese days, it seems like the word on everyone’s lips is ‘orphan’. Whether it’s orphan pricing, orphan market or orphan drug development, it seems like there’s nothing hotter than orphan drugs right now.

There’s good reason for that. Orphan drugs are treatments for rare diseases and conditions, and while historically they have not had an extremely high profile with investors (or big pharma for that matter), some recent successes have garnered sizeable attention. Sanofi’s acquisition of orphan-drug developer Genzyme in 2011 will probably be remembered as the defining moment that made orphan drugs mainstream, however several others have also led the way. This includes the stunning sales success of Shire’s enzyme-replacement franchise and Alexion’s half billion-dollar drug Soliris (in PNH, an indication that only has 5,000 patients). We have also seen some Canadian success in the field with investors cashing in on the acquisition of Enobia for $500 million last year. Other big-pharma companies have also jumped on board, with Pfizer and GSK both recently starting dedicated orphan drug business units. As successes have mounted, the growth of the orphan space has been significant. In 2001 just 78 drugs with FDA orphan designation were in development. By 2011, that number climbed to 203, a 160 per cent increase.

Orphan drug status was first legislated in the United States in 1983 to spur the development of new drugs for rare diseases, defined as an indication with fewer than 200,000 patients. Europe, Japan and Australia soon followed suit (Canada has disappointedly not enacted similar rules). The benefits conferred by legislation provided the backbone to the eventual growth of this specialty area. The most important benefits are fast-track status at the FDA, a priority review and the assurance of market exclusivity for a designated period following launch.

Regulators work closely with orphan drug companies to tailor development programs that are often less stringent in terms of demonstrable efficacy and safety evidence required for marketing approval.

Such regulation provided the framework for growth, but it was only really in the mid-2000s that the market began catching up with the opportunity. Industry, previously focused on generalized therapies for mass-market indications, saw a crucial and lucrative new branch emerge. Orphan drugs are inherently targeted to niche indications. These orphan indications usually have several important criteria including homogeneous niche-patient

populations and high unmet medical need. This scenario allowed the chance to show marked improvement in patient outcomes and quality of life, providing the basis for higher pricing, faster market penetration and larger margins. Even with only thousands of patients to treat, orphan indications could realize substantial returns.

The business plan sounds easy, right? Develop a cure for a rare and deadly disease, get the product approved on the basis of a small study, and charge hundreds of thousands of dollars for the results. In fact, the road to orphan drug approval is wrought with challenges.

Little precedent exists to draw upon when building the pre-clinical and clinical trials necessary for the approval process. Designing and conducting clinical studies of 150 patients for an orphan disease can be as challenging as conducting a study in a large indication (eg: diabetes) with thousands of patients. Lengthy discussions with regulators can ensue over the clinical validity of endpoints in diseases where no gold standard exists. Orphan diseases are often not well understood from a mechanistic perspective as well adding further development risk.

So while orphan drug development offers the potential for great returns, it also holds considerable risk. At Bellus, we’re developing an orphan drug candidate called KIACTA™ for AA amyloidosis, a disease that affects kidney function, rapidly leading to dialysis and death.

There are approximately 35,000-50,000 AA Amyloidosis patients in the United States, Japan and Europe for whom KIACTA™ is designed to significantly delay kidney function deterioration. This delay, shown in our first Phase II/III study , is the pharmaco-economic rationale driving market opportunity.

It has taken us more than ten years to reach this point.

Along the way we have built a wealth of experience blazing a trail in this new indication, and we are now at the last step to receiving approval for KIACTA™, recruiting patients in a Phase III Confirmatory Study. Drugs like KIACTA™ hold tremendous potential value because they can mean everything for patients. It has been a long road, but never before has the orphan drug space been as exhilarating as it is now. We’re glad to be part of it.

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