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Bio business championing the business of biotechnology in canada

  1. 1. The Future of Food in CanadaCHAMPIONING THE BUSINESS OF BIOTECHNOLOGY IN CANADA October/November 2008 ENTREPRENEUR EDITION What does it take to launch a successful bio venture? HARNESSING INNOVATION Canuck executives build Canada’s bio-entrepreneurial culture… one success at a time Startup Checklist Key criteria to launching Canadian Publications Mail Product—Agreement 40063567 a product or company The Initial Pitch What do Investors look for?
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  3. 3. ContentsBio BusinessCHAMPIONING THE BUSINESS OF BIOTECHNOLOGY IN CANADA ON THE COVER: 18–28 Thomas Wellner, President and CEO, Therapure BioPharma Inc. Entrepreneur Edition (Above) Wellner with Dr. Dirk Alkema, Several forward-thinking VP, Operations, at Therapure Canuck executives aim to boost the bio-entrepreneurial culture in Canada by their 30 “ Photos by Jason Hagerman very successalso inside NBW 200812 standards A look back at this year’s celebration Harnessing Innovation18 5 EDITOR’S NOTE Canuck executives endeavor to build Canada’s bio-entrepreneurial 7 NEWS culture…one success at a time 36 Startup Checklist NEW PRODUCTS20 A quick list of key criteria you need ” to know22 Q&A Q&A with Lorna Shaw-Lennox, Commercializing R&D is not for the faint of heart, Start-Up Company Specialist the impatient or the poor. Turning an idea into a28 The Initial Pitch successful company is very risky, complex and The basic business principles of a expensive. It takes patience, specialized knowledge, pitch to investors superior management skills and lots of money.30 Discoveries Canadian scientists advance – Dr. Jacques Simoneau, Executive Vice President, Investments, agri-food science and technologies Business Development Bank of Canada (BDC), in a May 200838 In Person speech to the House of Commons Standing Committee on McGill’s Professor Richard Gold seeks to Industry, Science and Technology reform dated intellectual property laws October/November 2008 Bio Business 3
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  5. 5. Bio Business Editor’s Note Championing the Business of Biotechnology in Canada Publisher Christopher J. Forbes & CEO Executive Bernadette Johnson Editor Editor Theresa Rogers Writer Jason Hagerman Editorial Intern Erica Tennenhouse Art Tammy White Director Risky Bruce Lee Secretary/ Treasurer Sales Manager Susan A. Browne Beth Kukkonen Business Promotion Nancy Sim I Manager t comes as little surprise that the biggest and application for their product or Promotion Jessica Forbes challenge for biotechs today is a lack of innovation, then build it; they create a Co-ordinator money. Our panel of entrepreneurs in distribution and sales strategy, and execute Production Roberta Dick this issue’s cover story on page 18 has not it; they manage the basic business opera- Manager been without its own set of financing tions of the company like HR; and all the Production Sara Forget hurdles. However, they have been blessed while, they attempt to attract money to Co-ordinator in some respects. And with good reason. keep everything afloat.Bio Business is published 5 times per year by Jesmar If you’ve ever wondered whether or not But it does take two to raise money.Communications Inc., 30 East Beaver Creek Rd., Suite202, Richmond Hill, Ontario L4B 1J2. 905.886.5040 your company would be eligible for ven- We know research commercializationFax: 905.886.6615 One year ture capital, Jacques Simoneau, BDC definitely represents a higher degree ofsubscription: Canada $35.00, US $35.00 and foreign $95. Executive Vice President, Investments, risk than other types of businesses. EachSingle copies $9.00. Please add GST where applicable. BioBusiness subscription and circulation enquiries: Garth suggests you first ask yourself: “Is my of our examples in the story boasts back-Atkinson, Fax: business going to change the world?” In ers who were willing to take that risk —to905.509.0735 Subscriptions to business address only. Onoccasion, our list is made available to organizations whose an article titled Entrepreneurship at the varying degrees—and stick with them forproducts or services may be of interest to you. If you’d rather highest risk level, Simoneau writes: “That the long haul.not receive information, write to us at the address above or may seem like a lofty goal but venture Axela’s Rocky Ganske believes a dedi-call 905.509.3511 The contents of this publication may notbe reproduced either in part or in whole without the written capital is reserved for a small percentage cated investor is critical to boosting theconsent of the publisher. GST Registration #R124380270. of entrepreneurs who are trailblazers success rates of life sciences companies in in their fields. They often have very Canada, as well as growing entrepreneuri-PUBLICATIONS MAIL AGREEMENT NO. ambitious objectives.” alism among the sector. Without Ven-40063567RETURN UNDELIVERABLE CANADIAN If you take the panelists in our cover Growth’s support, he says “Axela wouldADDRESSES TO story this issue, that statement does not be where we are today.”CIRCULATION DEPT.202-30 EAST BEAVER CREEK RD indeed hold true—each was recruitedRICHMOND HILL, ON L4B 1J2 from far and wide because they had a host Cheers,email: of skills and experience to bring to the table. You want ambition? Just over three Bio Business is a proud member of years in and Natrix’s Lisa Crossley is BIOTECanada and the Toronto already predicting her company will be Executive Editor Biotechnology Initiative (TBI). worth half a billion dollars within five years “at the outside”. Entrepreneurs like this bunch do it all: through market research, among other things, they determine a commercial value Publisher of LAB BUSINESS Magazine LAB BUSINESS Cards BIO BUSINESS Magazine Printed in Canada October/November 2008 Bio Business 5
  6. 6. News Canadian-Chaired Group Releases Critical Study of IP Laws new study released by an international coalition of experts blocking negotiations that couldA calls upon governments across the world to consider amassive restructuring of intellectual property laws. have benefited both sides, as well as the larger public.”The report was released in September by members of the Information was gathered throughInternational Expert Group on Biotechnology, Innovation and group sessions in which former indus-IP, a group chaired by McGill University’s Prof. Richard Gold. try competitors were allowed to sit Titled Toward a New Era of Intellectual Property: From and speak with each other, revealingConfrontation to Negotiation, the report outlines a number of information that made clear to bothstrategies for governments, universities and industry players to sides the reasons for their inability toincrease innovation, which Gold believes has long been stifled find common IP laws. Among these is a call to governments to work with The report highlights recentindustry in creating respected and trusted entities whose mem- examples of patents and privately-bers can be counted on to mediate disputes fairly and encourage controlled research limiting potential innovation—the $612indigenous and local communities in policy development. For million patent suit that nearly shut down thepatent offices to collect standardized patent-related informa- World’s Blackberries; Myriad Genetics’ inability to introducetion, and for universities to develop measures of the success of its breast cancer screening test in Canada and Europe; a phar-transfer of technology based on social returns rather than on the maceutical industry with an increasingly bare medicine cabinet;sheer number of patents held. Industry entities are also encour- an ongoing failure to deliver life-saving medications to develop-aged to participate actively in the creation of public-private ing countries.partnerships and other collaborative mechanisms. As with any fringe technology, biotechnology suffers greatly Based on seven years of research involving case studies from from vague, out-of-date and almost obstructive IP laws, accord-Brazil, Canada, Kenya, the United States, the European Union, ing to Gold. The industry itself, he believes, must be the primaryJapan, Australia and India, as well as discussions with policy- agent of change.makers, industry representatives, scientists and academics from “Law deals with technology that we had 5 to 10 years ago,”around the world, the report found consistent roadblocks said Gold. “To get things to happen you really have to changearound the globe. the minds of the people actually doing the research. We’re in ruts “We found the same stumbling blocks in the traditional of thinking. For any biotech to say ‘the old model doesn’t work,communities of Brazil as we did in the boardroom of a corpora- we’re going to go out on a limb here and come up with some-tion that holds the patent to a gene that can determine the thing new’, they’re afraid nobody’s going to back them. We allchance a woman will develop breast cancer,” said Gold. “No know the model doesn’t work, nobody is taking the first step tomatter where we looked, the lack of trust played a vital role in move it forward.” The Future of Pharma? “To remain at the forefront of medical research…the A ccording to research launched by Price- waterhouseCoopers, the research industry needs a faster, more predictive way of testing molecules before they go into humans,” says Gord Jans, and development process for leader of the Canadian Life Sciences practice. life sciences companies may Some companies are already using an incarnation of be shortened by two-thirds in virtual testing, and have reduced clinical trial times by 40 as few as 12 years. per cent. PwC’s research identifies the need for collaborative The report, Pharma 2020: Virtual R&D, which path will efforts between pharma companies, as well as the need you take?, focuses on the potential development of a “virtual for regulatory bodies which will be responsible for man,” which will enable researchers to rapidly test the licensing and reimbursement. effects of new drug candidates before they enter human “Connectivity—technological, intellectual and social— beings. This would result in massive forward progress in the will ultimately enable us to make sense of ourselves and area of R&D. the diseases from which we suffer,” says Jans. October/November 2008 Bio Business 7
  7. 7. NewsExpenditures in Higher Education R & D Near $10 B Energy Costs a Major Concern for ccording to Stats Canada, spending on research and development in the higherA education sector amounted to $9.6 billion for the fiscal year of 2006/2007. This Canadian Businessincludes money used in affiliated research hospitals, experimental stations and clinics.Broken up by category, miscellaneous natural sciences accounted for 41 per cent ofthe total, while health sciences came in at 39 per cent and social sciences andhumanities accounting for the remaining 20 per cent. Higher education institutions themselves were the largest contributors, funding A Canadian Institute of Chartered Accountants (CICA)/ Royal Bank of Canada (RBC) report$4.4 billion, followed by the federal government with $2.5 billion in funding, provin-cial governments with $992 million, business enterprises $808 million, private NPO’s released in August says corporatewith $775 million, and finally foreign bodies contributing $125 million. confidence in the Canadian econo- my is startlingly low, and that rising energy costs are a major factor. “A year ago, oil was selling for DNA Sequencing an average of $US 71.00 a barrel, to Explode gas prices at the pumps were aver- A ccording to a new technical market research report, DNA Sequencing: Emerging Technologies and Applications, aging $1.07, and the Canadian dollar was perched at 94 cents US. It’s been a tumultuous 12 released by BCC Research, the global months and that is reflected in the market for DNA sequencing should drop in confidence and optimism reach $1.7 billion by 2013—averaging levels of this latest report,” explains an annual growth rate of 14.7 per cent. Shauneen Bruder, EVP, RBC Business The report breaks the market down and Commercial Banking. into three segments. Research/drug The exception to the CICA/RBC discovery and development, which has the largest share of the 2007 market, Business Monitor findings is Western at $600.4 million, and is expected to grow by $40 million in 2008, and to Canada, where rising commodity over $1 billion by 2013. Commercial applications is the second segment, with prices have contributed to higher $193.6 million in 2007, $218.8 million in 2008, and an expectation of $426.1 economic confidence and optimism million in 2013. The third segment, emerging applications, currently has the small- —with oil and gas industry execu- est market share, at $3.1 million by the end of 2008, but will grow exceptionally tives reporting the highest levels of quickly, reaching $272.5 million by 2013, a growth rate of 144.8 per cent. confidence. DNA sequencing allows scientists catalogue variations within the human The Business Monitor, which is genome sequence that make us phenotypically different, and that cause resistance issued quarterly, reports that three in and susceptibility to disease. Rapidly evolving sequencing technologies provide four executive chartered accountants unprecedented analytical tools that allow reserachers to identify this sequence indicated their companies have variation, in humans as well as in other species. absorbed all or some of the increas- Technology and market forces are working a fundamental shift, according ing energy costs, while less than 40 to the study, in the DNA sequencing industry. Directing the industry away per cent took action to offset energy from stagnant/declining growth and into the polar opposite. costs.Appointments Quebec’s Æterna BIOTECanada welcomed Toronto’s Biovail Corp.The Alberta Medical Zentaris appoint- Jazmín Bolaños as Manager appointed Peggy Mulligan,Association Edmonton, ed Prof. Jürgen of Marketing and Programs. FCA as Chief Financial Officer.inducted its new president Engel, Ph.D. as its Among other things Bolaños Mulligan succeeds Adrian A. Defor 2008-09. Dr. Noel W. new President and will be responsible for defining Saldanha, who had been servingGrisdale is a family physician. CEO. Engel was formerly and implementing the as Interim CFO. Mulligan wasHe has been a member of the Executive Vice-president and association’s marketing most recently a Principal at PriivaAMA Board of Directors Chief Scientific Officer of programs and strategies. Consulting Corp. Prior to that, shesince 2001. Æterna Zentaris. served as EVP, CFO and Treasurer of Linamar Corporation.8 Bio Business October/November 2008
  8. 8. Canada Painfully Slow at Adopting Modern Medical Technology, Report Says A new study by independent research organization the Fraser Institute says Canada is painfully slow in adopting new medical technologies which could provide faster and more efficient identification and treatment of disease. The study, titled Medical Technology in Canada, evaluates the availability of medical technology in Canada compared to other nations within the Organization of Economic Cooperation and Development (OECD); measures the age and sophistica- tion of medical technology in Canada; and measures the stock of available cutting-edge medical technology in Toronto, Montreal, Vancouver, Ottawa, and Calgary. The study focuses principally on technologies in the diagnostic imaging, laboratory diagnostic, Canada West surgical, and patient services areas. “The results of our failure to invest in new medical technologies are exemplified by Foundation Calls for long waiting times, less efficient use of medical resources, and less timely and sophis- Clean Energy Goals ticated diagnosis and treatment,” says Nadeem Esmail, Director of Health System Performance Studies at The Fraser Institute and co-author of the study. The study also identifies Canada’s health care system as one of the most expensive T he Canada West Foundation released a report calling on municipal, provincial and the federal government to begin in the world. Esmail points out that the federal government transferred $3 billion in work on an energy strategy. Canada’s targeted funding to the provinces between 2000 and 2004 in an effort to improve the Power Play argues that the Canadian availability of medical technology. Yet, according to the study, modern medical tech- government needs to take a grander nologies still remain notably rare. approach to the issue of climate change According to OECD data, the number of MRI units in Canada, 6.2 per million and set specific energy goals. people, lags behind the OECD average of 10.2 per million. Likewise, CT scanners, 12 “Canada’s federal and provincial per million people in Canada, lag behind the OECD average of 19.2 per million. governments have made strides toward setting climate change goals, but these are distinct from energy goals,” says the China, Canada Partner to Increase Canola Production report’s co-author, Dr. Roger Gibbins. A new partnership between Canada and China aims to increase the production of Canola through genetic research. Over the next five years, The National Research Council “If we want to be a clean energy super- power, then we have to keep our eye on the energy policy ball. This means Canada (NRC) will contribute $210,000 worth of resources setting goals that will enable us to use and facilities, and the Oil Crips Research Institute branch of the Chinese Academy our energy capital to be global leaders.” Among the recommendations are: of Agricultural Sciences will contribute $300,000 in cash. establish hard energy production targets “Food and energy shortages are an escalating problem and increasing canola across a range of energy sources for both productivity is something that can help these global issues,” said Dr. Han-zhong domestic consumption and export thatResearch Council Canada Wang, Director of the Oil Crops Research Institute. He added that since Canada go beyond dealing with GHG emissionsPhoto credit: National is the proverbial birthplace of canola, the partnership is all the more fitting. and develop policy scenarios for meeting The first project to be undertaken under this agreement is to complete these goals; stress energy conservation genomics work on canola to identify genes that affect yield and adaptation to and market-based incentives; and coor- various environmental stresses. dinate federal, provincial, territorial and municipal energy policy initiatives. The Canada Council for Markham’s Cytochroma appointed Healthscreen Solutions Topigen the Arts appointed MaRS Steven I. Engel, M.S., Pharm.D., as Inc. appointed Ken Killin Chief Pharmaceuticals Director Joseph L. Rotman Vice-president of Regulatory Affairs Financial Officer. Previously a Inc., Montreal, Chair of the organization, and Quality Assurance. Engel company advisor, Killin replaces appointed Mark Parry- which fosters and promotes brings over 20 years of experience Eugene Bomba, who will be Billings, Ph.D., as Chief the study, enjoyment and in regulatory affairs and quality leaving his position to return Executive Officer. Parry-Billings production of art. assurance. He will be based in to private practice. joined Topigen in 2007 as Chief Cytochroma’s Illinois office. Development Officer. October/November 2008 Bio Business 9
  9. 9. NewsE V E N T WAT C HHigh-level Speakers Address Bio PacificRim SummitW ith biofuels, as with anything else, there is a right way to doit and a wrong way to do it. ChrisSomerville, director of the EnergyBiosciences Institute at the Universityof California Berkley, and DonO’Connor, president of S&T, spokein Vancouver at Bio’s Pacific RimSummit on the subject of doingbiofuel right. “Like any other activity, bioenergyand biofuels can be well done or Feds Contribute $3 Millionpoorly done,” O’Connor said. “Ifthey are done poorly, then the envi-ronmental and social benefits willnot be delivered. It is not what youdo but how you do it that createsan environmental benefit.” to Oilseed Research Somerville spoke on the concept of“responsible biofuels”—those that donot displace food production, do not T he Industrial Oilseed Network (IOSN) is set to receive $3 million in funding courtesy of the Government of Canada. The IOSN will dole out $2.556 million to Vancouver-based Linnaeus Plant Sciences Inc. Linnaeus will be responsible forconvert undeveloped land, do notincrease erosion or runoff and show the administration of a research network, and the funding of non-governmenta reduction of greenhouse gas emis- research activities. The research network will develop a new type of oilseed that will be used solelysions through a full life cycle analysis. for the production of petroleum substitutes for use in a variety of applications, suchThings like wheat straw and tallow as fuel additives for use in heavy equipment and marine towing operations; bio-basedand animal fats fall into this category. hydraulic fluids; and bio-based oils in the construction industry, civic bus transporta- tion, and lobster fishing. “Oilseed crops have the potential to provide bio-based alternatives to a variety of petroleum products,” said Jack Grushcow, the President of Linnaeus Plant Sciences Inc. and the project lead for the ABIP Industrial Oil Seed Network. “The Industrial Oil Seed Network will transition non-food Canadian oilseeds crops from a low value commodity to a high value industrial feed stock that can substitute for petroleum in a variety of applications.” OLEOTEK, located in Thetford Mines, will receive a total of $235,000 as one of the participants in the network. François Dornier, President of the Centres for the Transfer of Technology, says: “The contract will give OLEOTEK an opportunity to work with a multidisciplinary team throughout the country to achieve a sustainable development objective.”(C) 2008 Biotechnology Industry IOSN will also involve researchers in the United States who will share their sig-Organization nificant expertise in soybean oil so that it can be applied to Canadian oilseed crops.Province of Ontario Ranked as Key Biotechnology CentreT he June 2008 report issued by Genome Technology Online ranked Ontario as one of the top locations in the world for biotechnology. The high ranking came as a result of the abundance of resident biotech companies (120 private and 26 public), the presence ofmajor biotech initiatives like the Ontario Genomics Institute and the Ontario Institute for Cancer Research, as well as the creation ofa biotech-centric zone in the core of Toronto anchored by the MaRS Discovery District. Biotech organizations in Ontario were alsorecognized for forming several recent collaborations with out of country biotech clusters. Among other top ranked regions wereBoston/Cambridge, Washington D.C. Metro Area and Singapore.10 Bio Business October/November 2008
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  11. 11. NBW 2008A Look Back at NationalBiotech Week 2008T he fifth annual National Biotechnology Week was launched election October in Montreal September 18. Kick-off cocktails—hosted at the 14th, BIOTECanada Musée D’Arts Contemporain—drew a large crowd of leading postponed theindustry players, and proved to be an excellent opportunity to National Advocacyunveil BIOTECanada’s annual national polling results exploring Day of September 23.Canadians’ attitudes about biotechnology. Peter Brenders, Advocacy efforts at the provincial level continued in at least fivePresident of BIOTECanada delivered the findings (see sidebar). provinces. On the federal level, BIOTECanada did conduct an Many events took place across the country during the intensive E-Advocacy Campaign with the top 75 ridings in Canada whoweek of biotechnology advocacy, from September 19 to 26. In its have established bases of biotech operations. The online cam-milestone fifth year, the week is an important opportunity for paign provided federal election candidates with information onBIOTECanada and the community at large to engage partners— the companies active in their riding and on the main issues fac-government agencies and officials, local media, and the public—to ing Canadians today in building the industry.educate and raise awareness about the positive impact our industry Across the country, individual provinces and cities hostedhas on Canadians and their way of life. events such as conferences, career fairs, and guided tours of Typically, each year, biotech CEOs also meet with senior biotech facilities—all designed to outline the importance offederal decision makers in Ottawa to discuss issues relating to biotech to their communities and constituents. Here’s a samplingbiotechnology in Canada. This year however, in light of the of National Biotechnology Week events and announcements: Splicing the Data BioTalent identifies the critical role of human resources in Canada’s bio-economyAmong the week’s many announcements, was the launch of R&D 59.1%; clinical/field trials and regulatory: 24.7%; produc-BioTalent’s comprehensive, benchmark-establishing labour market tion/manufacturing 20.0%; commercialization/marketing 46.5%information (LMI) report of Canada’s biotechnology sector. The • Product/service breadth: 25.2% of companies focus on one toproduct of extensive research and analysis, it is in fact the only two products (across all stages of development)report of its kind in this country, developed under the leadership of • Full-time employment: 8 out 10 companies have fewer than 50industry and yielding statistically significant results that paint a full-time employeesclear—and occasionally surprising—portrait of Canada’s bio- • Outsourcing: 55.0% of all companies outsource some skills oreconomy. Here is a snapshot of the findings, intended to help the tasks, regardless of company size; IP (26.4%) and manufacturingcountry’s biotechnology industry identify their areas of need and (24.2%) are the principal functions outsourcedbegin planning strategically to ensure a successful future—in part- • Vacant positions: Roughly a third of companies have unfillednership with each other, with educational institutions, government positions today—with most of those in preclinical research/R&Dbodies and organizations such as BioTalent Canada: (51.9%); marketing, sales and communications (27.9%); and man-• Significant expansion: 77.2% growth in number of biotechnology ufacturing/distribution (26.0%) companies in Canada over past 20 years • Recruitment and retention: Top 3 challenges are lack of candi-• Revenue challenge: 28.1% of pharmaceutical companies gener- dates with required skill sets/experience (55.6%); insufficient cap- ate revenues of less than $50,000 per year ital/resources to recruit appropriate candidates (34.1%); and• Stages of development for primary and secondary products: competition for qualified candidates (32.8%)12 Bio Business October/November 2008
  12. 12. Canadians Value Biotechnology and 81% Want Governments to Support It TooBIOTECanada releases national poll on Canadians’ attitudes on biotechnologyBIOTECanada’s fifth annual National Biotechnology Week Findings also included:launched in Montreal with the release of national polling resultsshowing Canadians overwhelmingly value biotechnology’s contri- • The biotechnology footprint: Over 550 firms in Canada arebution to their food, their health, their environment and the econo- part of an industry that invests $ 1.7 billion per year inmy. The poll, conducted by Nanos Research, found that overall research alone.impressions of biotechnology continue to be positive. For the • Biotechnology creates prosperity: Almost nine of every tenfourth year in a row, biotechnology matters to Canadians. Canadians (88%) believe biotechnology is important to Eighty-eight per cent of Canadians understand that biotechnol- Canada’s future economic prosperity.ogy is important to future prosperity, indicating support for a • Canadians want to see governments support biotech-strong bio-based economy in Canada that is based on a sound nology: Eight of every ten Canadians (81%) supported thebusiness framework, and financing for innovative firms. Strong use of government financial incentives to encourage inno-majorities of Canadians support research in biotechnology and the vation in biotechnology. Eighty per cent thought the healthuse of products and processes that involve biotechnology across care system should pay more to introduce biotechnologicalthe board. Canadians see biotechnology is bringing a positive con- advances into our care.tribution to agriculture, the environment, and notably, believe the • Quebecers are especially strong supporters of biotech-greatest benefits will be in health sciences. Canadians expect to nology: Ninety-two per cent of Quebecers (92%) supportedbenefit from biotechnology in their lifetimes—and they expect biotechnology for research. Compared to the national aver-their governments to invest in innovation to bring biotechnology age, Quebecers were significantly more likely to believeinto health care, and to financially support the sector, whether there would be major benefits from biotechnology in thethrough tax incentives or grants. areas of health, environment and agriculture. Third Annual GPI BioGolf Tournament The Guelph Partnership for Innovations (GPI) held its annual BioGolf tourna- ment at the Guelph Lakes Golf and Country Club. Custom-made trophies featured a useable Putt for the Planet golf ball. The latter balls were also used for the putting contest. The tournament also included a biotech business trivia game for prizes and glory. GPI also held its annual GPI Networking Breakfast Series. Started in 2003, it aims to inform, connect and inspire attendees on topics of interest to the Guelph agritechnology cluster. (Bottom left) Novelist and GPI Breakfast Speaker William Atkinson chats with attendees at the breakfast. GPI is a consortium of life science stakeholders with the vision of making Guelph one of the top five life sciences centres in North America. October/November 2008 Bio Business 13
  13. 13. NBW 2008London Celebrates Biotechnology Week with Friendly Competition TechAlliance hosted the 5th annual London Biotechnology Week. This year’s celebration of the local and national biotechnology sector was launched through a keynote presentation from Dr. Michael Strong on the Lifecycle Research Network, of which he is Director, and later in the week followed by a business seminar showcasing new government programs available to entrepreneurs to help their technology based busi- nesses grow and prosper. Additionally, the week brought together 100 students and nearly 100 community leaders to participate in the fourth annual BIOlympics, an event that engages grade 7 and 8 students through competing in a round robin of fun biotech-related challenges. The winners this year were the Bacteriocides from St. Mary Choir Catholic School with Team Leader Police Chief Murray Faulkner. For a second year, TechAlliance also ran the Secondary School Biotechnology Awareness Campaign, giving high school classrooms the opportunity to hear from and engage with seasoned industry experts. This initiative stimulates interest and encourages local students to pur- sue careers in the biotechnology and life science industries. Throughout the week, over 350 participants joined London Biotech Week and marked this year’s initiative as a true success. Teachers Receive National Award for Teaching Excellence Three teachers from Winnipeg, Vancouver and Moncton received can understand and take advantage of these changes.” the third annual BIOTECanada-Biogen Idec Teaching Excellence “Our business was founded on innovation. Building scientific Award. Albert Chang, Robert Adamson, and Lawrence McGillivary knowledge in Canada is crucial to encourage the next generation of were judged by a panel of industry experts to be the three top edu- entrepreneurs, and the work these teachers do builds that founda- cators in a secondary school level biotechnology program. This tion,” said Richard Francis, President and CEO of Biogen Idec program awards a total of $10,000 annually to the 3 winning teach- Canada Inc. “Biogen Idec is extremely proud to recognize the con- ers and their respective schools. tribution of three teachers in raising the bar in scientific under- “This year, our National Biotechnology Week celebrated educa- standing in Canada.” tion and we are extremely pleased to be able to recognize the contri- The first place winner, Albert Chang, from David Thompson butions of these three individuals in instilling a love of science in stu- Secondary School in Vancouver, receives $5,000, to be shared with dents,” said Peter Brenders, President and CEO of BIOTECanada. his school. Chang was recognised for the depth of his teaching “Biotechnology is changing the world around us in fundamental program, which combines scientific theory and practice with the ways. Through their commitment and passion to teaching the latest history of biotechnology, patent law basics, and media analysis, and biotechnology science, teachers are ensuring the next generation for his significant mentorship of his students outside the classroom.14 Bio Business October/November 2008
  14. 14. C001.A1.0115.E © 2003, 2006 Eppendorf AGl Reduced operating forcesl Pipette and tip color-coding systemsl Comfortable fitl Ergonomics approved by TÜV Fantastic fit. Intuitive operation—Minimal user exertionEppendorf PhysioCare Concept pipettes. ®Specially developed precision components and an optimaldesign produce a pipette that is easy to use and requiresless force to operate. The results are reduced mental andphysical strain and a more efficient lab process.TÜV Rheinland approved our manual pipettes as:ergonomic, user-friendly and user-tested. To find out more about the complete PhysioCare Concept please visit: • Email: • Application hotline: 516-515-2258 In the U.S.: Eppendorf North America, Inc. 800-645-3050 • In Canada: Eppendorf Canada Ltd. 800-263-8715
  15. 15. NBW 2008 DNA Extraction…and dancing?MaRS celebrated National Biotechnology ting the slurry with water. The mixtureWeek with two free events Friday, Sept. was then filtered through cheesecloth to26. For Biotechnology 101, Northern remove the large chunks. Alcohol wasSecondary School’s Dr. Danielle Gauci, then introduced to the concoction,2007 winner of the OGI Genomics which separated from the water, andTeaching Prize and Biogen IDEC drew the DNA content to the surface ofBiotechnology Teaching Excellence the water, which the alcohol restedAward, presented students with the basics, above. Students were able to remove theincluding the impact of biotechnology jelly DNA from the liquid and take itand its applications. The second event, home to display their scientific prowess.Dance ‘N Action in the Park, involved After the DNA Extraction seminar,lively streetside performances by buskers, students made a short trek to Metrodancers and other artists at Metro Hall. Square for a presentation hosted by theThe two free events were hosted by the Ontario Genomics Institute (OGI) andMaRS Discovery District, the Canadian the Golden Horseshoe BiosciencesBiotechnology Education Resource Network. The mysteries of DNA wereCentre (CBERC), The Biotechnology first unraveled through the Top Rock,Initiative (TBI), the Ontario Genomics Drops and Freezes of a three-man breakInstitute (OGI) and the Golden dancing crew.Horseshoe Biosciences Network. Following some real life accounts of Students from across the GTA con- the impact of genetics, some DNA poet-gregated at the MaRS building in down- ry and a tin-drum/ saxophone duet, atown Toronto, for an engaging seminar single interpretive dancer took to thepresented by Dr. Danielle Gauci that floor to act out the colourful life of a dou-included hands-on DNA extraction by ble helix. In the second performance in asthe students themselves. Students first many days, the double helix was thebroke down bananas using plastic forks, centre of attention for more than 225reducing them to mush/pulp and split- students from as many as 8 schools. Photos by Jason Hagerman Premier Ghiz officially decrees National Biotechnology Week in PEI at the PEI BioAlliance Launch day, September 1916 Bio Business October/November 2008
  16. 16. HARNESSING18 Bio Business October/November 2008
  17. 17. INNOVATION Special Report Canuck executives endeavor to build Canada’s bio-entrepreneurial success at a time B io-entrepreneurialism. It’s quite a mouthful. By definition, it means the art or the endeavor of organizing, managing, and assuming the risks of a sci- ence- or biotechnology-based business or enterprise. “Commercializing R&D is not for the faint of heart, the impatient or the poor,” Dr. Jacques Simoneau, Executive Vice President, Investments, Business Development Bank of Canada (BDC) said in a May 2008 speech to the House of Commons Standing Committee on Industry, Science and Technology. “Turning an idea into a successfulPhoto by Jason Hagerman company is very risky, complex and expensive. It takes patience, specialized knowledge, superior manage- (From left to right) Dr. Dirk Alkema, VP, Operations, and Thomas Wellner, ment skills and lots of money.” President and CEO, Therapure BioPharma Inc. at the company’s And by most accounts, it doesn’t happen often new 130,000-square-foot cGMP enough in Canada. Indeed, pundits say an entrepre- manufacturing facility in Mississauga neurial environment is sorely lacking north of the border…for the very reasons listed by Simoneau. October/November 2008 Bio Business 19
  18. 18. “In Canada, there isn’t the same kind of entrepreneurial culture that Thomas Wellner spent the last 10 years working in the UKthere is in the States,” says Lisa Crossley, PhD, P.Eng., President and Germany in top positions for Eli Lilly, following 10 yearsand CEO of Burlington-based Natrix Separations Inc. (formerly with the company in Canada. He recently returned to take on theNysa Membrane Technologies), a supplier of high performance, role of President and CEO of Mississauga’s Therapuresingle use and multi-cycle disposable chromatography products. Biopharma Inc., a new, first-of-its-kind Canadian biopharma-Prior to launching Natrix in 2005, Crossley spent five years cutting ceutical company specializing in developing, manufacturing,her teeth in the American biotech industry taking two lead thera- purifying, and packaging biological protein therapeutics—at apeutic candidates through clinical trials in four indications—leads very large scale and small scale.that ultimately powered the company’s IPO. “Down there, we had “The biotechnology scene has changed a lot since I was herea lot of startup exposure. Everyone I knew was at a startup compa- 10 years ago. There was quite a robust industry then. It seem tony. That experience had a tremendous impact on me and definite- have been somewhat decimated,” he says. “There are somely accelerated my professional development.” tremendous brains and discoveries kicking around the labs here. The mindset of U.S. entrepreneurs is to look toward the exit But we need more investment and more focus around the com-more so than toward the job itself, says Rocky Ganske, President & mercialization of biotechnology.”CEO, Axela Inc., Toronto, which provides protein detection, char- Crossley, Ganske and Wellner are among several forward- “I make no bones about it. I’m here toacterization and monitoring products used in life science, healthand clinical research (read more on Axela in Entrepreneurial create wealth—both for myself, myBeginnings, page 26). And he would know. Ganske, an American, [team]…and my investors.”came north specifically to launch Axela. “I make no bones about it.I’m clearly here to create wealth—both for myself, my manage-ment team, my employees and my investors.” Startup Checklist A quick list of key rules you need to know prior to launching a product or company • Build a good business plan. The single most important • Think commercially from the get-go. What is the commer- thing you can do is to put together a good business plan, cial need for your product/technology? What else is out says Natrix’s Crossley, not a research plan. “You need to there in this category? Your product has to be so com- use real, concrete, measurable data—not something you pelling that people are willing to adopt yours over what’s just pulled out of a market research report. What is the already out there, says Ganske: “You want your product to market size? How much of it can you address? And when be so good that it is unconscionable for anyone to say no.” can you do that? Barriers to entry? You need to bring investors references that they can contact—actual end • Get to know your potential customers and get them users, or key thought leaders in the industry to validate engaged early. Says U of S’s Shaw-Lennox: “People are your concept/product,” she says. “So many people give happy to give their opinion on something that you are the formula that everybody learns in business school, but creating—and if you can’t get them involved in that that doesn’t translate into how you are going to penetrate creative process, you’re certainly not going to get them to the market and when.” buy your gizmo.” • Look early on at commercial partners. This world today is • Broaden your horizons and think globally. There is this becoming more and more a game of partnerships, says local mindset that looks at the market opportunity within the Ganske of Axela. “Sometimes you have to go to other peo- confines of the Canadian jurisdiction, says Therapure’s ple for technology. The challenge that some of the less- Wellner. “You have to have a global mindset and under- experienced entrepreneurs in Ontario have is that they feel stand not just the local politics, and the provincial and fed- as though they have to invent everything themselves— eral shenanigans that go on but also European require- there’s no need to do that.” Rather, says Ganske, develop ments and U.S./FDA drivers,” he says. “You have to be relationships—either licensing or distribution partner- able to put yourself in a greater, global context to be able ships—and you’ll be introduced to new people, often with to truly appreciate the opportunities that are out there. And connections, that want to play with you. there are vast numbers of opportunities.”20 Bio Business October/November 2008
  19. 19. Special Reportthinking Canuck executives trying to stymie some of the negativetrends that are occurring. By their very success, they hope toboost, among other things, the bio-entrepreneurial culture inCanada. “We have a really great opportunity here in Canada to buildthe next layer of business leaders in this space by showingthem what it’s like to create this wealth and to createenergy,” says Ganske. “They’ll go forward with that samehunger. It’s a function of getting enough successes.” Even distributor VWR is hoping to make its mark.Axela and Natrix are the first pieces of its NorthAmerican business development initiative that aimsto help young biotech companies get their products infront of customers, and ultimately drive the adoption ofnew technologies, says Doug Ward, VP Marketing,Canada, at VWR International. In partnering with anddistributing the products of new companies, it hopes togrow its life sciences program and fill gaps in its productportfolio. Depending on the U R NofN G partnership, the I O N I N T O T nature I the I N N O VATcompany can also provide market guidance and support given H ECONOMIC GROWTits knowledge of the end user and of the industry. “I’ve been around a long time, and I’ve seen so many peopledevelop a product and sell it off. It’s the Canadian reality. There in the Business, education and governmentare very few folks taking it to the market on theNiagara stage joined forces Hamilton, Halton and global regionslike these two [Axela and energize our existing biosciences strengths and to Natrix]. That really attractedme…taking risks in Canada is not something that happens very help turn breakthroughs into business success.often,” says Ward. Join us as we build this regional initiative! “I’ve come back to Canadatransform to start and Horseshoe into a Help wanting the Golden lead aCanadian-based, but globally focused, companyeconomic powerhouse of knowledge-based, that through itssuccess will hopefully contribute positively and the Canadian research, growth to,” adds Wellner. For its part, Therapure Biopharma web site today to man- out more! Visit our Inc. provides protein findufacturing services on a contract basis, but also forms joint devel-opment partnerships with biotechnology firms—sharing the costand risk of manufacturing complex biologicals at commercialw. g h b n . o r g w w lev-els. The company is also seeking to acquire pre-approval productsand to forge potential equity participation in some cases. “The intention is that we are all about helping biotech andinnovative companies bring their products to life,” he says. “We’llpartner with them early on or midstream and stay with themthrough commercialization. There are not many biotech compa-nies that happen to have $250 million kicking around to build alarge-scale biomanufacturing facility like we have.” It’s a unique business model, Wellner adds, made possiblethrough the company’s relationship with backer Catalyst CapitalGroup Fund II. Therapure’s unique and flexible 130,000-square-foot cGMP manufacturing facility will be completed this fall,generating at least 100 high-quality, value-added jobs forOntarians, says Wellner. (Therapure Biopharma acquired itsCanadian built and conceived facility from HemosolCorporation, a specialist in therapies derived from hemoglobin, ablood protein.) October/November 2008 Bio Business 21
  20. 20. QA Special Report Wellner cites famous University of Toronto scientists FredrickBanting and Charles Best as early examples of what happens to with Lorna Shaw-Lennox, Start-Up Company Specialist,most Canadian scientists and discoveries…and indeed one of the Industry Liaison Office, University of Saskatchewanmain challenges Therapure is hoping to address. “Their discoveryof insulin in 1921 changed the course of a disease. But they couldnot make the product at a global, commercial scale on their own. What is your role as startup company specialist?They were compelled to partner with a U.S. company that could Our role at the industry liaison office is to tech transfer for the university.provide them with the technical competency and capability.” We commercialize technology. If something looks like a good platform tech- The current market conditions in Canada, he continues, nology, and if we have an entrepreneurial researcher who is interested in aencourage scientists to sell their products and ideas before they startup company—and it meets all the other criteria like patentability andhave to start spending money on phase two and three clinicals, marketability—then we would decide to build a startup around thatand commercialization. “We need some Canadian success stories. technology. That’s when it comes into my portfolio. I help them do a marketI want to see them stick through it…but to do that you need assessment; help them write a business plan; I can link or network them withaccess to a significant amount of capital, and the amounts that people who could serve as a management team.float around to support biotech in Canada are minuscule com-pared to what they are in the U.S.” How do you define an entrepreneurial researcher? Do the two go The fact that Canadians are quick to sell out is one of hand in hand?Crossley’s biggest pet peeves. “Up here, when we get that initial Someone who has expressed an interest in starting a company or has aearly offer of acquisition from a U.S.-based company for a couple willingness to work with you—that’s important. They must have some sensemillion dollars, we sell out.” of what it means to be an entrepreneur. Not many people I deal with are She agrees this trend is fueled by a lack of venture capital, entrepreneurial-minded. They are technology minded—that’s what they do.which then drives Canadian firms south for funding, which in And it’s not a bad or a good thing, it’s just that’s their brain. People who haveturn usually invites the pressures of moving operations to the U.S. that entrepreneurial bent are rare. There aren’t a lot of people who are“We’re never actually able to achieve a critical mass of startup willing to take the high stakes and the risk that entrepreneurs do. They are acompanies that have gone beyond seed stage. We create tons of unique breed.value up here, but we’re never the ones who capture it. If we’regoing to change our culture in Canada, we need larger funds, but So do you have your work cut out for you then?“I’ve come back to Canada to start For me, what’s really important is to be able to prove that there’s a market, and know who those customer are and what their needs are. The challengeand lead a Canadian-based, but glob- then is to take it and say ‘ok now we need to find someone who will take this and champion it’. We have a couple companies (Adnavance Technologies focused, company that through and MCN BioProducts Inc.) to draw from—both spearheaded by Todd L. Lahti,its success will contribute positively a serial entrepreneur or CEO-for-hire, basically. He has the business background. People like him are very important to that entrepreneurial cycleto the Canadian space.” and getting the research into the market. Would you say Canada, or Saskatchewan, has a bio-entrepreneur- ial culture?maybe fewer of them. It’s a tough problem to overcome.” I think it’s growing. But the biotech sector is technology based, and I think we Axela’s Ganske agrees new programs and approaches are have this drive and understanding of how important it is, but we don’t haveneeded. He admits progress has been made to increase the the depth of the entrepreneurial people we need to move it forward.SRED levels, but argues the only way to get cash back, is to Among other things, we need mentors and mentorship programs to helpspend it in the first place. He points to the labour-sponsored drive this, but we haven’t set up a system where we can engage those peoplefunds of years gone by, which were allowing capital to start build- who have the battle scars and the experience and can lend that to the younging companies up, only to be cut in less than a five-year period. “I people. I think [universities] need to start developing those networks. Manywas left questioning the logic of the individuals [running the universities have ‘entrepreneur in residence’ programs. That sort of hand-show] and their knowledge of this space, as investments in this holding, and roll-up-your-sleeve-and-get-involved programs are great. I thinkspace take much longer to build value” Ganske says. “Now, we’ve that’s the model we need to start looking at.unfortunately created a shopping mall for U.S. venture capital Entrepreneurial training and education is also important. It’s important toguys. They can come in here and buy stuff on the cheap because get undergrads, grads, etc. thinking about the value of their research. Wethere’s no money to support it.” need to let them know commercialization is an option. There are some simple The funding gap, Ganske says, exists particularly beyond the rules that they need to know. For example, if they think that commercializingseed stage. “Unless we find a way, quickly, to infuse some capital22 Bio Business October/November 2008
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  22. 22. to bring those companies from that point, they will simply getrained out…they will run out of capital. It’s unfortunate because might be a potential or viable route for them, don’t publish. Our businesswe need to get this momentum moving.” school is starting an entrepreneurial centre and they’re going in to sectors— not just natural sciences, but also kinesiology and social sciences—to show Crossley cites her own journey with Natrix as an example of them what’s possible. I think that’s an exciting place to be.strategically avoiding some of the potential pitfalls. Three yearsago, the technology behind Natrix was still in a university lab at Do programs like BioVenture incorporate many of theseMcMaster in Hamilton. Natrix develops a membrane-based plat- components?form technology to improve the safety and economics of the The initial phase is just to submit your idea. Then the five people who arebiotechnology separation processes required to purify proteins and shortlisted go through a few months of a mentoring process—we hook themother life sciences compounds. With the technology, the compa- up with lawyers, or tech transfer people. We’re giving them very specific,ny hopes to create novel, high value products for specific applica- hands-on guidance on market assessment, and getting to know yourtions, including large-scale bioprocessing, blood processing, and customers and getting them engaged before you finish the product. That’sfood and beverage processing. According to Crossley, the technol- really hard for kids with a technology background to understand, but that’sogy is the first new thing to happen in separations in decades, and where we’re going with them.has a total addressable/accessible market of $9 billion. Working with these young people and their ideas is so exciting. It’s so “I think this company will be worth half a billion dollars with- exciting to see their energy and passion for what they’re doing. Most of themin five years at the outside. It is a very attractive candidate to exit are like sponges—they just want to learn how to do this. It’s quite rewardingeither via IPO or MA. It’s a good story if you’re an investor.” for us as well. The proof is in the pudding. The company initially raised$2M in seed financing through MDS Capital and BDC Venture Are all universities grappling with these same issues andCapital. “They gave us $2 million instead of the usual $500,000 challenges?investment. This really accelerated our progress by just allowing Yes. Tech transfer offices are becoming quite entrepreneurial in theirus to concentrate on developing our products,” she says. approaches. There is a great debate within tech transfer offices: Is the best“This company will be worth half a way to license your technology out, and get measured on how many dollars you bring in immediately and how many patents you license? Often thebillion dollars within five years…It’s a traditional way that tech transfer offices commercialize technologies is togood story if you’re an investor.” license them—usually to the U.S. or Europe. Alternatively, would it be better to be measured on your regional economic development, the development of innovations, and are your efforts to create that sense of entrepreneurialism in your region? More universities are starting to focus more on startups, and This spring, Natrix leveraged the progress it had made on the growing them locally to be successful.initial seed investment to attract $19 million of financing fromBDC, JovInvestment Management, and a new lead U.S. investor—D.E. Shaw Ventures. the time to exit is reasonable, there is money out there. “In my In the last two years, Natrix assumed ownership of the tech- experience there is a lot of money out there. If you have a realnology they initially licensed from McMaster, leased 25,000 fundable value proposition, you’ll find the funding.”square feet of space in Burlington, Ontario, built a state-of-the- But success, she says, also comes down to ensuring you haveart lab and manufacturing facility, and grew its staff from six to the right management team in place to turn your company into37 people, including sales and product managers in the U.S. In a success story—essentially the right mix of technical knowl-addition to selling directly to high-volume markets, the company edge, business acumen and entrepreneurial drive. “With tech-recently launched its first group of products into the research nology companies, leaders have to have some technical depth tomarket through distributor VWR Canada. Incidentally, the com- position the company and products externally. But investors relypany has subcontracted some work to Therapure’s new facility. on the business skills to carry the company to revenue, growth Crossley says they looked south for some funding because of and ultimately exit,” says Crossley. “There is a tremendous depththe size of the investment needed: “We needed some deep pock- of VP talent in Canada, she continues. You don’t have to bringets. But we were very clear with our investors that we would not in a U.S. team, but you do have to be discriminating about whatmove to the States. Collectively we said: ‘We are going to be a you’re looking for.”major global player and we will do it from Canada, not the U.S.’ Ganske says he initially brought in two U.S. individuals toIt did weed out some investors—those who assumed we would lead various parts of Axela’s business. Today, however, the com-move to Boston.” pany boasts more Canadian management than U.S. “I’m cog- While money is one of the largest hurdles, Crossley believes if nizant of what Axela is doing to build that next group of biotechyou have a truly compelling value proposition, and it looks like leaders in the Toronto space, based on the shared experience of24 Bio Business October/November 2008
  23. 23. Special Reportthe current management team,” he says. Ganske disagrees with those who say Canada doesn’t have theright skills or the right people. “We have found very goodCanadian management that we’ve been able to put into place. Atthe same time, when you have the capital support, if there isdomain expertise you need to reach down into the States to get,you can do that,” he says “People will come north—but they won’tcome north without the capital and they won’t come north with-out understanding the support is there to drive the company tothe finish line.”“In my experience there is a lot ofmoney out there. If you have a realfundable value proposition, you’llfind the funding.” go to the States and make many times what I’m making. That is what drives many people’s decisions on where the talent goes.” The U.S., for instance, he says, also boasts robustness and Money, after all, makes the world go around. And it’s ultimate- vibrance of activity and deal-making, which he says alsoly what lures many Canadian entrepreneurs south, or overseas for stimulates the structure of the industry and a lot of the entrepre-that matter, Wellner adds. “As an executive, I’ve taken a significant neurial cut to come back to Canada, but that’s a personal choice I’ve Crossley argues another big challenge in Canada is thatmade for my children and my wife, but it’s a 1 9/9/08 “I could AM Page 1 Xerox Engineer Dimensions:Layout cost,” he says. 10:48 Continued on page 28... Xerox’s Nan Xing Hu was th just awarded his 74 U.S. patent. Would you have hired him? Seventy-four U.S. patents is no small feat. And he is just one of five skilled immigrants who are breaking new ground in innovation at the Xerox Research Centre of Canada. Today, more and more successful companies are tapping into the power and talent of the skilled immigrant workforce. These companies have discovered that skilled immigrants bring insights and fresh thinking to the table, along with their degrees. Given that the Ontario workforce is expected to shrink over the next few years, isn’t it time your company took advantage of this opportunity? Do yourself a favour. Hire a skilled immigrant. Funded by the Government of Ontario October/November 2008 Bio Business 25