BIV Magazines: LifeSciences 2008

Here’s a little known fact for you: of the top 10 biotech companies in Canada, half were homegrown in B.C. But while B.C. has the science and academic research and expertise to make this type of impact, in pharmaceutical circles the province is yet to reach the altitude of San Diego, San Francisco or Boston.

Why is that? And what success is B.C. having in attracting big pharma to the big country?

Think catch-22. The Boston effect refers to the acknowledgment by the pharmaceutical industry of outstanding academic centres and pools of scientific experts resident around Boston and Cambridge, Massachusetts. The pharmaceutical and large biotech companies establish their headquarters around these centres and make significant infrastructure investments, which in turn become a hub or magnet for outstanding people. Those folks spend some time working for the big pharmas, then often branch out and start their own companies. They are a huge stimulus for economic growth.

Now look at B.C. We are known as the intellectual property generating arm of non-Canadian companies. In other words, we have the talent to make exciting discoveries which are then purchased and moved elsewhere.

The catch-22 is that we need big pharma investment locally in order to be the next Boston and we cannot get it because we keep selling our technology and knowledge to other Bostons.

“What we do well is innovate,” said Simon Pimstone, chair of LifeSciences BC and CEO of Xenon Pharmaceuticals. “Imagine, if B.C. facilities hired out of the universities and attracted people here – imagine the economic stimulus.”

We make good discoveries here, he said. Then, essentially, those discoveries leave B.C., so the economic value is derived elsewhere. We don’t have major development opportunities in B.C. nor commercial capitalization where a lot of value is created in scientific discoveries.

“The Boston effect would create the type of environment to bring in capital and expertise to build far more sustainable companies in B.C.,” said Pimstone. But so far, our province hasn’t been seen as a very favourable jurisdiction to do this type of business in, though some progress has been made.

“What’s remarkable is how much B.C. has done with so little,” said Pimstone, noting that B.C. is home to three of the world’s profitable biotech companies.

But change is in the air, and pharma money is beginning to flow into B.C.

In October 2007, Providence Health Care announced a $4.25 million contribution from Pfizer Canada ($3 million to a tropism strain test for HIV/AIDS and $1.25 million for the creation of the first Canadian research chair in cardiovascular prevention research).

“We wanted to build a program around a person,” said Dr. Andrew Ignaszewski, head of the division of cardiology at Providence. “We came up with the idea of a chair. It’s a very expensive endeavour.”

He said that Pfizer has a large portfolio of pharmaceuticals in cardiovascular disease prevention and not only want its medications to be taken properly but want to advance the well-being of patients who take its medications.

“I’m very happy about it. It’s a good example of corporate citizenship,” he said. “It further supports the reputation of B.C. as a centre of excellence in research, especially when there is no government or peer review funding, so I see it is startup funding.”

He mentioned other big pharma investment, notably AstraZeneca’s $1.5 million to study the emerging epidemic of obesity and pre-diabetic metabolic syndrome, and Merck Frosst’s $1 million to SFU.

“I like to think it’s opening the door for maybe other companies to follow suit,” he said. “Without [Pfizer’s investment], we likely would not have a chair yet – or ever.”

Pfizer also gave $1 million to the Centre for Drug Research and Development (CDRD) to fund research with commercialization potential in common disease areas. The Pfizer-CDRD Innovation Fund aims to fast-track the commercialization of some of B.C.’s most promising academic research projects into high-value medicines that form the basis for new companies or licensing opportunities.

“For us, they are a key partner – our first substantial funding from an industry partner,” said Kathryn Hayashi, chief financial officer at the CDRD. “We consider it an important seed investment and hope to build a broader relationship with Pfizer.”

Funding these technologies with pharmaceutical partners is the obvious way to make it happen, she said.

“We hope, if we can demonstrate value and accelerate academic discoveries to move toward commercial viability, we’ll attract interest and investment from pharma once we have all the ingredients – the right research, technology, investment climate and industry partners,” she said. “When they do come together, we’ll have a vibrant cluster.”

Hayashi also explained that it’s very expensive to fund studies, and many research grants only fund limited study. If a researcher can provide a more complete package of information, a potential partner can more readily determine if the research is viable then invest in it.

“The investment to date is a start,” said Pimstone, “but it’s not going to change the paradigm here. We need a pendulum swing. This is shifting – the pendulum – and it’s a good thing, but a few million dollars here and there is not going to change the industry.”

He said we need to provide more and multiple incentives for industry to establish infrastructure here, like $10 million at a time.

“It’s not just about pharmaceutical investment,” he said. “We need tax incentives, foreign venture capital and people to flow into the province and a personal tax structure to recruit executives. We need more out of the province. It’s not all up to the pharmaceutical industry. The government has a role to play. There’s positive movement to be done to make maximum competitiveness.”

It would fulfil a second catch-22. To build a Boston effect here, Pimstone said there needs to be capital gains exemptions and stock options – a small measure to stimulate the economy. As more high-income earners and their families move to B.C., they are paying taxes here, buying homes, spending money. He said it’s a smart move economically.

“We need the world’s best,” said Pimstone, “and we need many of them.” •

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