Canadian Biotech Then And Now 10 Year Retrospect

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By Tonya Costoff

Let Canada act as your innovation partner – the ambitious message being sent out across the world.

"Canada: Your Innovation Partner" - a strong message, and one that Industry Canada is
doing its best to get out to the international market.

The message was chosen due to Canada's unique strengths to play a key role in the operations of global pharmaceutical and biotechnology industries. The message also takes into account the fact that it is innovation that in fact drives the product pipeline for new drug development globally.

"The reality of the biopharmaceutical industry is that it takes numerous partnerships along the research and development spectrum to develop innovative products," said Dr. George Michaliszyn, director, Industry Development & Sector Analysis, Life Sciences Branch, Industry Canada, Ottawa. "Involving academia, government and public research institutions and hospitals, small and medium sized biotechnology enterprises (SMEs), global pharmaceutical companies, not to mention the financial and venture capital communities," continued Michaliszyn.

Canada offers numerous opportunities for strategic alliances and partnerships, with a high concentration of innovative biotechnology firms, world class science and supporting research infrastructure, outstanding clinical trials capabilities coupled to one of the world's best R&D tax treatment, a competitive intellectual property protection regime and an internationally recognized and competitive regulatory environment.

"Most importantly, we have the international reputation for research excellence in areas such as: genomics, proteomics, bio-informatics, protein engineering, immunotherapies and drug delivery systems," added Michaliszyn.

"By promoting Canada as a destination for innovation, we strive to increase the amount of research and development (R&D) conducted in this country by attracting more international investment by global pharmaceutical and biopharmaceutical firms; and stimulating strategic alliances between Canadian and foreign firms in a way that accelerates the growth of Canadian industry. We see the concept of partnership as a win-win situation both for the Canadian industry and research community and the global companies who want to grow their businesses with Canada," said Michaliszyn.

The Economist Intelligence Unit has ranked Canada first in the G7 as the best place to invest and do business for the next five years (2007-2011) making it hard to overlook Canada as an investment destination. The ratio of FDI-to-GDP, an indicator of Canada’s 'openness' or orientation toward foreign investment, was about 31.6% in 2005. Canada’s foreign investment orientation continues to be among the highest in the OECD, in particular vis-à-vis the U.S., whose ratio of FDI-to-GDP stood at 13.0% in 2005.

Canada's declining share of North American overall foreign direct investment (FDI) stock appears to be mostly the result of its very high level of inflows in the 1960s and 1970s, not its recent performance. In fact, Canada’s share of North American inflows has been quite constant over the last two decades at around 13%.

However, as Michaliszyn explains, global competition is mounting, especially from some of the new emerging economies - so Canada needs to be continually monitoring its comparative advantages to ensure that it is globally competitive as an investment location.

Getting Industry Canada's message out is no easy task. Messages have been incorporated into several sector-specific communication products that highlight the advantages Canada has to offer pharmaceutical, biopharmaceutical and medical device companies. Industry Canada has also made all the information accessible on its website. The material is also available and distributed at key global industry conventions such as the annual BIO International Convention in the USA and MEDICA in Dusseldorf, Germany. Canadian partnership efforts between governments and industry at BIO and MEDICA represent major efforts by Canada to get the message out.

"We also work with the senior management of international firms to develop targeted investment opportunities focusing on the advantages of Canada. We can link firms to key research contacts and/or potential Canadian industry partners in their areas of strategic interest (by therapeutic class or stage of product development)," said Michaliszyn.

The federal government has made significant investments in publicly funded research that have had a significant impact in biotechnology research. The Canada Foundation for Innovation (CFI) provides infrastructure research funding, while the National Research Council (NRC), the granting councils, such as the Canadian Institutes for Health Research (CIHR), the Canada Research Chairs program provide funding for basic research that have a significant biotechnology component. Genome Canada has been funding targeted research in genomics.

The federal government offers a number of funding mechanisms to assist in applied research, knowledge translation and pre-commercialization that are of benefit to biotechnology firms. These include the Industrial Research Assistance Program within the NRC, technology transfer programs within the granting councils, the Scientific Research & Experimental Development tax credit program for companies and the Business Development Bank of Canada in the area of venture capital.

In addition to these existing efforts, the Government of Canada committed in Budget 2007 to providing immediate funding of $105 million for seven Centres of Excellence in Research and Commercialization. These centres are expected to raise matching funds from other sources and include five in the area of health sciences, one in information technologies and one in energy - the Life Science Research Institute in Halifax, the National Optics Institute in Quebec, the Neurological Institute in Montreal, the Heart and Stroke Foundation Centre in Toronto and Ottawa, the Li Ka Shing Knowledge Institute in Toronto (St. Michael's Hospital), the School of Sustainable Energy in Alberta and the Brain Research Centre in Vancouver.

At the same time, the government announced the establishment of the Centres of Excellence in Commercialization and Research program. This program will rely on international peer review and advice from the private sector to enable government to identify the best initiatives. Government investments will be made in partnership with provinces, businesses and other groups. The program will complement the research and science infrastructure that exists through the granting councils and the Canada Foundation for Innovation. The government has identified $195 million over the next two years to support competitions in this new program.

According to Michaliszyn, R&D is strongest when there is a coordinated approach that brings together scientists at academic research institutions, governments and the private sector to set priorities, collaborate and share resources. Michaliszyn feels that Canada needs more research and commercialization centres to provide global leadership.

"The federal government is prepared to invest in partnership with other levels of government and the private sector to create centres that operate at international standards of excellence and put knowledge to work for social and economic benefits for Canadians.

The federal government will target resources to areas where Canada has the potential to be a world leader - energy, environmental technologies, information technologies and health sciences," said Michaliszyn.
In the past 10 years Michaliszyn has seen remarkable developments among a variety of high-growth industries in Canada.

As for the future, Michaliszyn sees the role of genomics in medicine increasing and accelerate the trend towards personalized medicine. "Pharmacogenomics will allow us to determine which patients are best suited to receive a particular course of therapy," said Michaliszyn. He also predicts that monoclonal antibody based therapies, vaccine technologies and stem cells will continue to drive the evolution of new therapeutic opportunities in the sector. From the non-health perspective, the cost of traditional energy (oil) and climate change impacts will persuade traditional industries to look towards more sustainable approaches and sourcing carbon from renewable resources rather than non-renewable sources. Biotechnology through the industrial products or bioproducts will continue to facilitate this economic transition.

As for the global pharmaceutical industry, he predicts it will continue to undergo global restructuring and rationalization of the full range of its activities from research, development, manufacturing, marketing and distribution. Also, because of continually escalating R&D costs, high pipeline attrition rates and greater regulatory challenges, there is serious need to increase investment in technologies to improve R&D efficiencies.

"The world economy is changing. New players are emerging as major economic powers. Competition in world markets is fierce, as more and more countries are actively competing globally and regionally to attract FDI," said Michaliszyn. "By positioning Canada internationally as 'Your Innovation Partner,' we hope to communicate the many advantages that Canada offers and why it is a great place to grow your business."