In the eye of the storm: An interview with Mario Lebrun, executive director of BioQuébec

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By Chris Rogers

As we peer deeper and deeper into how the biotech industry operates in Québec, one thing is clear: with so many organizations and initiatives it can be difficult to get a comprehensive lay of the land. Luckily, Mario Lebrun is able to tackle just such a task.

As executive director of BioQuébec, and an organization representing over 175 companies and R&D centres in Québec, Lebrun can not only give a brilliant overview of where the province’s biotech industry currently finds itself, but he can also forecast where it’s heading.

Lebrun understands the breadth of organizations surrounding the biotech industry and clearly differentiates BioQuébec’s role.

“We are a trade association,” said Lebrun. “We are the only trade association which represents the economic interests of the biopharmaceutical industry. When I say biopharmaceutical industry I mean biotech companies, the big pharmas and also CRO’s and CMO’s - that’s the breadth of our membership. And that’s our mission: to effectively lobby government to change or to put in place policies that will help to develop the industry.”

It can be difficult to decipher the plethora of partnerships and associations in the biotech industry, and this point is not lost on Lebrun. He said he has even had recent talks with members about the confusion.

“We are not an economic development agency financed by the government, we are totally financed by our members and we are a trade association in that regard with no subsidy from government, and we lobby government for the economic interests of our members.”

That is not to say that Lebrun and BioQuébec do not support the initiatives of other groups or the forward thinking they promote.

“As a trade association, we do partner with many organizations as much as possible to echo the interests of our members.”

In fact, Lebrun sees partnerships as essential to the success of the industry, but more on that later.

Since BioQuébec’s direction is driven by the interests of its members, it’s important to understand its makeup.

“If you look at the profile of our membership, 65 per cent of those members are what I call, industry members: biotech companies, big pharma and technical research organizations and contract research organizations…35 per cent of our membership is service members, and in service I include all the service providers such as law firms and accounting firms which are also members of BioQuébec.”

Lebrun was keen to note that when he joined BioQuébec as executive director, membership was closer to a 50/50 split between industry and services. He said that they have been able to refocus their actions to better answer the needs of their industry members and overall, their value as a trade association.
Despite the successes that BioQuébec has had in its composition, Lebrun isn’t happy.

“In absolute terms, over the last three years we’ve lost members,” he said. “We’ve been losing members due to economic conditions and the mere economic reality: the business environment. It hasn’t been easy. I would say this has been accentuated over the last six months by the economic climate.”

The problem of declining membership for an association such as BioQuébec should be an indicator that something is amiss in the industry. Unfortunately, this is not the early warning siren, times are much more desperate. This is the whistle of the bombs dropping.

“We were saying in 2007, 43 per cent of the biotech companies in Québec had less than a year of cash flow,” expounded Lebrun. “When you look at the situation in 2008, it has been pretty dramatic because 66 per cent of those companies say they now have less than a year of cash flow. So in a one year period the situation has gotten worse.”

Lebrun puts it lightly. He estimates that 25 per cent of those companies have less than three months ahead of them. He adds that although he doesn’t have data for 2009 yet, he senses things are getting worse.

“It is quite dramatic to see those companies suffering from the economic reality, and as a trade association we have pressured the provincial government to come up with some measures both short term, and mid-to-long term…to really help the industry,” he said. Dramatic.

“The main issues facing a biotech company here in Québec is not any different from the rest of Canada – there’s limited access to financing, not only for their future development but for their own immediate existence,” he contends. “When 66 per cent say that they have less than a year of cash flow and 25 per cent of them say that they have less than three months: it’s quite dramatic.”

Again, Lebrun calls the situation dramatic; he is being kind.

“We’ve called for some emergency measures and there was nothing in the last provincial budget,” he laments. “And just to give you two real specific emergency measures that we would want government to do: one is convert tax dollars into tax credits, which is pretty similar to what BIOTECanada is asking for, and second, is to allow for bio-companies to be able to receive on a quarterly basis, in advance, their tax credits for research. That would help cash flow.”

As was alluded to earlier, BioQuébec is very active in fostering partnerships to better the industry. Specifically, the goal is to create better integration and partnership between big pharma and biotech. Lebrun said that although BioQuébec was pursuing this element last year, it has been heightened over the last two months.

“We would like the government to really put forth a vision that will really bring together - more closely than ever - big pharma and biotech; and really be part of a real industrial strategy for this sector.”

Lebrun likens his hopes for the province’s biotech industry to that of Québec’s tradition of very strong industrial policies in aerospace. That is, they will subsidize or finance to build a new manufacturing site but in return they want to ensure the creation of so many jobs, and a certain percentage of the suppliers are from Québec.

“It should be the same thing by analogy in the biopharmaceutical environment,” he said. “Make sure that big pharma have better market access, or increased market access and in return, [it will] benefit the biotech industry in Québec. It makes sense because in Québec, as opposed to other provinces, we have a critical amount of brand name big pharmaceutical companies. So why not use that as leverage?”

“The idea is, find something that will allow increased overall pharma revenues thanks to better market access for the biotech companies,” he said.

Lebrun explained that in the last year, there has been a real push on the part of BioQuébec to get closer to big pharma. When he joined BioQuébec only three pharmaceutical companies were members, now he boasts 17 members. He understands the importance of bringing all sides of the equation together.

“I think the government, with the meetings we’ve had with them, at both the political and bureaucratic level - they see the value as well,” he said.

But clearly, the current strategies in Québec are not perfect.

“We sense that Québec is losing its leadership role in Canada for some reason,” Lebrun blazons. “And there is certainly a strong willingness on the part of the Ontario government to play a greater role and a leadership role in that area, and we don’t seem to get that same feeling.”

And as cut and dry as it may seem, with an industry as complex as biotech, the problems are perhaps, mere shades of grey.

“Now don’t get me wrong, the government, over the last year or two has not diminished fiscal incentive - financial benefit for the industry, that’s not the case,” Lebrun argues. “There is a sense of disconnect somehow between the level of support needed by the industry to really develop versus the government commitment there.”

Time will tell how badly Québec’s biotech industry has been hit by the recession but Lebrun’s bleak story is a compelling call to arms for a province so imbued with biotech.