BIOTECanada’s Peter Benders on the state of the sector

What top three big-picture issues face biotech firms in Canada in the foreseeable future?  Top of the list is, of course, financing.  Even after an economically difficult year that saw global markets shy away from “risky” investments like biotech, within the industry, much scepticism remains about capital coming back.  On the one hand, we see firms responding with a wealth of innovative partnerships and revenue-generating structures: whether diverse product lines; in-licensing; contract research or a greater focus on partnerships and joint development work, firms are maximizing the expertise of their leadership and in-house teams to do more with less.  The other plus is our companies have great technologies that foreign investors are only just now realizing present a huge opportunity.

On the flip side, it is no secret the Canadian financing environment leaves much to be desired.  BIOTECanada has been leading the charge for needed changes.  Two years ago, we realized significant increase to SR&ED thresholds and limits, and, after a long advocacy campaign, we were pleased to see the removal of section 116 certificates from the Income Tax Act, facilitating foreign investment in our firms.  There is more to be done.  At a recent capital formation roundtable that BIOTECanada convened with the industry and our investors and venture capitalist leaders, we explored solutions such as flow through shares for biotechnology companies and creating a new fund of funds.  Canada’s competitive landscape continues to evolve, and we are challenging ourselves and our governments to keep pace.

These big questions are explored in our recently published industry strategy, Beyond Moose and Mountains.  How can Canada attract investment for commercialization, stimulate new capital formation, and achieve the sort of capital environment that creates incentives for the biotech-powered economy — the bio-economy of the future — to take root here?

Of course, financing is arguably part of the bigger package — namely, business climate (or operating environment) and the people question. In a recent issue of CMAJ, editor Jean Hébert wrote about the gap between great research and commercialization, speaking of the need to attract more clinical trials to Canada faster.  The issue is symptomatic of the overall need to create, in Canada, a regulatory system that facilitates market entry.  Canada has the fundamentals in our companies and our system; we now need an operating environment energized to support success. As long as the larger, more populous European and American markets drive our field, regulators need to focus on the means to make our environment become a competitive advantage – and showcase Canada’s global leadership.

A strong management team is, as common knowledge tells us, the real key for financing success and overall growth for a firm.  Incentivizing good managers to stay in Canada (or to consider it in the first place) is one area of attention. However, biotech is a team sport, and with countries like China and Asia graduating thousands of able scientists and PhDs every year, Canada must step up its commitments to in-house education and to attracting the best and brightest here.

A strong sense of optimism and great growth pervades the industry this year.  This year, we’re seeing many companies reaching milestones and approvals — as I write this, Theratechnologies is four weeks away from an FDA decision, and Cardiome has just received a positive recommendation from a committee of the European Medicines Agency.  The challenge remains stable long term growth with a commitment to innovation — and working together, the success we expect is certainly in sight.

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This blog was graciously written and submitted by Peter A. Brenders.  Peter is the President and CEO of BIOTECanada, Canada’s national association representing the biotechnology sector.

BIOTECanada is dedicated to the sustainable commercial development of biotechnology innovation in Canada.  It is the national industry-funded association with over 250 member companies representing the broad spectrum of biotech constituents including emerging and established firms in the health, industrial, and agricultural sectors, as well as academic and research institutions and other related organizations. To learn more, please visit BIOTECanada’s website.

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