The Trials and Tribulations of the Canadian Biopharma Industry

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By Tonya Costoff

As of late, there has been lots of talk of the Canadian biopharma industry suffering from a dwindling pipeline. The pharma companies are of course anxious to refill the pipelines before they run dry completely, and the common solution has been to turn towards promising upstart biotech companies. The Canadian government has even gone so far as to identify biopharmaceuticals as an important leader in innovation.

Mergers and collaborations between big pharma and biotech companies are of course nothing new, but they seem to be happening more and more lately.

One such deal that seems to be generating a lot buzz right now is Roche’s acquisition of Arius Research. Arius is the developer of a proprietary antibody platform called FunctionFIRSTTM, which rapidly identifies and selects antibodies based on its functional ability to affect disease before progressing into clinical development. This antibody generation engine has enabled Arius to develop a pipeline of more than 500 antibody drug candidates. The FunctionFIRST(TM) technology platform will allow Roche to further strengthen its developmental portfolio, initially within the areas of oncology and inflammatory diseases where this new technique offers potentially broad therapeutic applications.

The Canadian Biopharmaceutical Industry Technology Roadmap is a report that was released by the Canadian government, with the purpose of assessing the situation and planning for the future of the technology by outlining strategic choices for the most effective use of resources. Its intent is to provide guidance to industry, government and the research and development communities.

The report states that “as the Canadian health sector advances through the 21st century, pharmaceuticals and bio–pharmaceuticals remain a key component to a sector that is one of the most important drivers of the global economy.”

Q: What are some of the trends you see taking place right now?

There has been a movement in the investment community away from the high risk investment in the biotech industry in Canada. One problem in the past was that the investment community did not spend enough time reviewing and understanding the industry. The easy way out was to fund one product/technology companies which are easy to review but very high risk. The result was a large number of single product companies, which eventually have a failure and then cannot raise anymore money.
One result of this is that with more funding it is possible that many of these products/technologies may have looked at alternative indications or treatment programs and eventually some would have succeeded. It appears to be a hit or miss scenario in Canada with little in between.

Q: There is lots of talk of the dwindling Canadian pharmaceutical pipeline in the next few years, what are you thoughts on this?

I don’t think the pipeline has dwindled, I think the funding for the pipeline has dwindled but the majority of products come out of academic research and that has increased (I believe) over the last few years. One problem with the funding is it is mostly matching dollars funding, which means to obtain a government grant you need some participation from industry/provincial organizations. This has likely led to a decrease in innovative research and an increase in established research programs.

Q: In relation to the question above, do you have any suggestions on what you think Canada should do to make sure its biopharma market stays healthy in the future?

More untied research funding. If you look at the successful locations for biotechnology they are all around highly funded innovative academic research centres.

Q: How do you feel about strategic alliances and/or collaborations? Do you think they work? Why or why not?

Some work and some don’t but they cannot be the driver to establish a strong industry. No-one can predict where the current bounds of research will be stretched through innovation and research so this must be given a strong funding. Most academic/industry collaborations are for targeted research, which limits the output in a number of ways. This is especially true in Canada but also true in other locations as well.

Q: There is lots of talk about the gap in financing in the Canadian life sciences sector, do you have any thoughts on this?

Not really other than there isn’t enough funding to sufficiently fund a new company for the time required to establish itself.

Q: Can you discuss your own opinion of the growth and evolution of the Canadian biopharma market?

It grew out of two impetuses; one the development of products and technologies that led to highly successful companies especially in the US but this grew out of a number of very strong funding initiatives including curing cancer and solving AIDS. We lacked these strong funding initiatives in Canada and unlike some I don’t see the research activity in Canada as very strong.
The second is the push by the Federal and Provincial governments to use the development of the industry as a means of economic development but without the concept that they would or could be a partner in this.

Q: In your opinion, what are some of the major challenges facing the Canadian biopharma sector right now and in the future, and what can Canada do to overcome them?

Funding issues are the big challenge at the present and they seem unlikely to go away anytime soon. I do not believe that the governments can solve this problem given how many attempts there have been in the past. Perhaps we are mainly hewers of wood and drawers of water after all.

Q: On the flip side, can you identify areas that the Canadian biopharma market is doing well in?

No

Q: Do you think we should be looking at what other countries are doing in their own biopharma sectors and learning from them? If so, do you have any examples?

There is no need to look very far. The biggest driver of our industry is located in the US.