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Championing the Business of Biotechnology in Canada

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PMS PMS PMS PMS PMS FOIL Contents

Championing the Business of Biotechnology in Canada on the cover 12 Going abroad

As the world becomes more interconnected there are more and more opportunities for biotechs to explore new markets. Bio Business takes a look at what Russia, India, Turkey and Brazil have to offer.

also inside

8 Regional Profile: PEI PEI is sometimes viewed as an agricultural outpost but it is starting to push for recognition as one of the top biotech clusters in the country.

10 Active Ingredients With the majority of active ingredient production for drugs taking place in the developing world, governments are struggling to keep up and make sure drugs are safe.

16 BIO Convention The annual BIO Convention touched down in Chicago in late April. Bio Business was there to see some young Canadians and two of the country’s most exciting up-and-coming 8 companies win awards.

“There has been a growing standards concern over the quality of AI by health regulators around 5 Editorial the world.” 6 News –Leona Aglukkaq, Canada’s Minister of Health page 10 22 Business Leadership

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Job # 13-0925 Publication BioBusiness Trim Size 8.375” x 10.875” Run Date 04/15/13 Editorial

Championing the Business of Biotechnology in Canada Publisher Christopher J. Forbes & CEO [email protected]

Executive Editor Theresa Rogers [email protected]

Associate Editor Nicolas Heffernan [email protected]

Staff Writer Lindsay Grummett [email protected] Editorial Intern Chelsea Kowalski Cashing in Some Capital Art Katrina Teimourabadi Director [email protected]

Secretary/ It’s really just confirmation of common knowledge.

Treasurer Susan A. Browne Canadian biotech companies need more funding. Nobody needed an Ernst & Young Marketing Lisa Pressacco report to tell them that. Manager [email protected] But the numbers don’t paint a happy picture: total funding remained flat at US$733 Marketing Keri LaPlante million, public companies’ R&D expenditures fell 12 per cent last year, revenues were Co-ordinator [email protected] flat, the number of public companies in Canada decreased seven per cent to 63 compa- VP of Roberta Dick nies and the overall employment in the sector also fell five per cent. Production [email protected] But the part that really sticks out and what is of biggest concern is venture funding Production Crystal Himes was down by 60 per cent to $US68 million. The problem is there’s no knight in shining Manager [email protected] armor on the horizon. There’s no plan in place to attract funding; it seems like everyone Production Joanna Forbes will just keep drifting along and hope for the best. It’s disappointing because there are a Co-ordinator [email protected] lot of brilliant minds and great ideas in this country but they don’t have the money to Bio Business is published 6 times per year by see the light of day. Jesmar Communications Inc., 30 East Beaver Creek Rd., Suite 202, Richmond Hill, Ontario L4B 1J2. I’m not going to pretend that I have the ideas to solve this problem and it’s defi- 905.886.5040 Fax: 905.886.6615 nitely not a quick and easy fix. But something needs to be done quickly to make sure all www.biobusinessmag.com One year subscription: Canada $35.00, US $35.00 and foreign $95. Single the potential that Canada holds in biotech doesn’t just fall by the wayside. copies $9.00. Please add GST/HST where applicable. Bio Business subscription and circulation enquiries: Garth Atkinson, biondj16@publication partners.com Fax: 905.509.0735 Subscriptions to Nicolas Heffernan business address only. On occasion, our list is made Associate Editor available to organizations whose products or services may be of interest to you. If you’d rather not receive information, write to us at the address above or call 905.509.3511 The contents of this publication may not On the Web at be reproduced either in part or in whole without the www.biobusinessmag.com written consent of the publisher. @ GST Registration #R124380270. on twitter at @biolabmag PUBLICATIONS MAIL AGREEMENT NO. 40063567 RETURN UNDELIVERABLE CANADIAN on facebook at ADDRESSES TO /biolabmag CIRCULATION DEPT. 202-30 EAST BEAVER CREEK RD RICHMOND HILL, ON L4B 1J2

May/June 2013 www.labbusinessmag.com PEI • BIO Convention • Active Ingredients email: [email protected] Your Career Path ChromatograPhY Dr. hani el-gabalawY Championing the Business of BioteChnology in Canada may/June 2013

The definitive source for lab products, news and developments Bio Business is a proud member RUSSIA AND Do the flip! ICE SAND TURKEY of BioteCanada and Canadian-led team finds proof camel lived in Arctic INDIA Head to the Arctic as a Canadian-led Life Sciences Ontario. team uses pioneering techniques to BRAZIL identify 3.5-million-year-old camel bones. Ahoy!Markets Biotech markets abroad offer businesses Canadian Publications Mail Product Sales Agreement 40063567 Canadian Publications Mail Product Sales Publisher of 40063567 Canadian Publications Mail Product—Agreement www.biobusinessmag.com new avenues for success

LB_MayJune13_KT.indd 1 6/4/13 1:36 PM Lab Business Magazine BB_MayJune13_KT.indd 1 6/6/13 12:38 PM Bio Business Magazine Printed in Canada www.biobusinessmag.com 5 News Sanofi Promising Cancer Inaugurates Therapies Still New Office Awaiting Green Light

Even royalty made it out to Sanofi’s Lymphoma Foundation Canada (LFC) be twice as effective and better tolerat- inauguration of its new Canadian cor- says faster approvals are needed for ed versus previous treatments for indo- porate head office in Laval, Quebec. coverage by provincial drug plans. The lent non-Hodgkin lymphoma. His Excellency Philippe Zeller, recent approval by Health Canada of a But other patients are still waiting Ambassador of France to Canada; Mr. highly effective new treatment for for access to other drugs, such as Alexandre Duplessis, Mayor of Laval; non-Hodgkin lymphoma and the sub- Adcetris (brentuximab vedotin), an anti- and Mr. Nicolas Marceau, Quebec sequent decision by several provinces body-drug conjugate (ADC) that has Minister of Finance and the Economy, to cover the cost for cancer patients is produced significant results in people were on hand for the event in early very good news, says the LFC. suffering from Hodgkin lymphoma. It May. The new offices, together with a However, the organization says more was approved for use by Health Canada new Canadian centre for distribution must be done to speed up the cover- on February 1, but it can take eight in Kirkland, Que., form a renewed age by provincial drug plans for a host months or longer for provinces to add investment of $12M by Sanofi in the of promising new treatment options. such new treatments to their formularies. province. In April, Treanda (bendamustine) “The issue is the time it still takes to Sanofi companies in Canada was listed on provincial formularies in get these new treatments covered by include Sanofi Canada (pharmaceuti- the western provinces, and is expect- provincial health plans. It's time that cals), Sanofi Pasteur (vaccines), ed to be listed on formularies in some patients simply don't have,” says Sanofi Consumer Health (health and Ontario and the Atlantic provinces Sue Robson, LFC Executive Director, beauty), Genzyme (rare diseases) and very shortly. In combination with noting that waits in Ontario are consis- Merial (animal health). Together they rituximab, Treanda has been found to tently among the longest. employ more than 1,700 Canadians and, in 2012, invested $122 million in R&D in Canada. “As part of Laval's Biotech City, we and into the market requires unique remain committed to bringing innova- MaRS Teams public-private partnerships,” says Dr. tive new medicines to Quebec and Up With Pfizer Raphael Hofstein, President and CEO of Canada, and hope to those living with MaRS Innovation. “Partnering with diabetes, cancer and other diseases,” MaRS Innovation gives Pfizer access to says Jon Fairest, President and Chief MaRS Innovation, a Centre of Toronto's robust innovation pipeline and Executive Officer of Sanofi Canada. Excellence for Commercialization a close look at emerging IP from “Our new head office and distribution and Research, is forming a strategic Canada. It signals both the strength and centre ensure that Sanofi continues to partnership with Pfizer Inc., to attractiveness of our commercialization benefit from the expertise in the life advance early-stage technologies model and Toronto-based research sciences sector that Quebec has related to human health in therapeu- technologies to global industry players.” to offer.” tics and diagnostics. Pfizer will provide funding over a Through this collaboration, MaRS three-year period to support promising Innovation and Pfizer will jointly iden- individual projects based on their due tify investment opportunities emerg- diligence, which will be leveraged with ing from well-validated scientific financial support from MaRS Innovation. research discoveries within MaRS Together, it is intended to accelerate the Innovation's 16 member institutions, development and validation of health- including the University care technologies within a of Toronto and its nine highly innovative academic affiliated teaching hospi- cluster in Canada. tals. “There's growing consensus that transfer- ring technologies from the university lab bench

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LCMS 8040 for Lab Bus.indd 1 9/14/12 12:53 PM PEI is emerging as an unlikely hotspot Biotech in PEI... for biotech

COMPANIES By Nicolas Heffernan 38 Think about it: 38 bioscience companies. $70 million in R&D yearly. $100 million in sales. 1,000 people working in the sector. $70 This is not supposed to happen in what’s considered a rural part MILLION of Canada. IN R&D Yet biotech could be the vehicle that eclipses Prince Edward Island’s reputation as an agricultural community and offer secu- in 2009. TCI was attracted rity in the future. 1,000 to PEI by the climate, the “It’s a crucial part of this province’s future to have industry SECTOR WORKERS experience of local farmers sectors like this that are attractive to capital and to brain power in managing traceable and and can really sustain our communities across the province with identity-preserved crops, new opportunities,” says Rory Francis, Executive Director of the and grower experience with small crops like oilseed. Prince Edward Island BioAlliance the private sector-led partner- “Probably one of the biggest factors was the influence of the ship of business, research, and government agencies that coordi- bioscience community in Prince Edward Island, particularly the nates the bio-sector growth strategy. presence of the National Research Council and the University of PEI is still trying to overcome that ‘agriculture, fisheries and Prince Edward Island,” says Steve Howatt, Technology Crops’ VP tourism’ reputation but once prospective companies visit the of Business Development. “The province’s direction and support island and see what it has to offer, their opinions change quickly. for expanding the bioscience community really lent a lot of cred- “Our Canadian reputation is still largely about great beaches ibility to PEI as being the right location for us. We are very and potatoes and lobster and Anne of Green Gables,” says focused on agricultural bioscience and natural product chemistry Francis. “But in the bioscience sector, we exceed people’s expecta- which the NRC here specializes in and PEI is very much an agri- tions every time someone comes into town. They just don’t realize cultural centre.” until they really get here and see the quality of the companies, the And the glue that holds the bioscience community together is infrastructure, and the kind of science and product development the BioAlliance. “The BioAlliance has become the forum where that’s going on.” the conversation takes place within the partnership of business, With a specific focus on natural product chemistry, bio-busi- research and government agencies,” says Francis. “Ensuring that nesses on the Island are developing and marketing natural health the strategy moving forward is creating the right conditions for products such as cosmetic ingredients, nutraceuticals, animal businesses to be successful, growing our science capability and health therapeutics, fish vaccines and active pharmaceutical ingre- working together to see that the public policy piece fits in.” dients, including therapies for specialized areas of human health In an environment as globally competitive as bioscience, PEI such as Parkinson’s Disease, Alzheimer’s, and ALS. has relied on a well-coordinated plan in terms of managing its Technology Crops International, based in North Carolina, priorities, allocating resources, growing companies already located built an $8 million specialized oilseed refinery in Kensington, PEI in the province, and attracting new business. “So that’s really

8 Bio Business May/June 2013 Regional Profile

Access to quality infrastructure is also critical. In 2011, the provincial government opened the PEI BioCommons, a 65 acre industrial park developed to support the growing bioscience sector “It adds a key piece of infrastructure in terms of going from what we would think of as pilot scale to full-scale commercialization,” says Joan Turner Adams, Business Development Officer at Bioscience Innovation PEI. “The park itself is meant to be flexible space that can accommodate varying needs and varying sizes.” Companies have a choice of leasing space or building their own facilities. The province also offers a short-term rental subsidy on top of the competitive lease rate. The Light Manufacturing Centre (LMC) at the park is more than half full at this stage. The shell was completed in the spring of 2012. “We constructed the LMC with the basic infrastructure requirements within it and then individualized for the companies that were coming in,” says Turner Adams.

left to right: Rory Francis, Executive Director of the PEI BioAlliance. become one of our strategic advantages as a cluster – those close Technology Crops’ manufacturing facility in Kensington, PEI. relationships around a focused strategy and everyone in the same boat rowing together,” Francis says. Steve Howatt, Technology Crops International’s VP of Business Development, speaks at a launch event at new BioCommons Research The BioAlliance plays on the cluster’s strengths as a collabora- Park in Charlottetown. tive environment where companies have access to advice to navi- Dr. Russ Kerr, Nautilus Biosciences Canada. gate the challenges that businesses face. Francis also cites the quality of life, a good, safe environment and the lack of a rush hour commute. “It’s really a community – a bioscience commu- The goal is to have the LMC filled by the end of 2013. “We’ve nity – that we strive to establish and connect people to,” Francis also had discussions with companies that are large enough and their says. “I think they feel they can be part of something that’s moving needs are great enough that they could construct a facility of their in the right direction and they want to catch the wave.” own.” She’d also like to establish an incubation and scale-up facility PEI offers companies access to skilled labour from Holland and work is proceeding on how it will be financed and operated. College and the University of Prince Edward Island. If that Since PEI is a relatively new and developing cluster, the capacity isn’t available regionally, they’ve had success recruiting BioAlliance is not hesitant to look beyond the province’s borders for from around the globe. “PEI’s quality of life is attractive to people help. “We need to reach out and have a very good network nation- that are looking for a place to have a great career without the ally and internationally to access the brain power and the experience urban rat-race. It’s a stable workforce so you don’t have quite the that we need to guide some of the companies,” says Francis. turnover you have in larger centres,” says Francis. One way of developing that network is by bringing partners But as with many technology centres around the world, the from all over the globe to PEI. “This year we will host Vethealth main difficulty is attracting sufficient capital. The BioAlliance Global, our International Veterinary Business Conference, and tries to help companies by making sure their business plan is as Biotech and Human Health, a conference focused on Neurological strong as it can be. “As much as it’s a challenge, there is money Disease.” available,” says Francis. “Money is looking for quality investment Francis predicts some fairly aggressive growth in terms of pri- opportunities, so the most important thing is to make sure the vate sector revenue, job creation and investment in R&D. “No one companies are really investable... that have really thought through thinks we’re anywhere near any limiting factor when it comes to the their commercialization strategy really well and have their ducks growth of this sector. There’s lots of room and all kinds of opportu- lined up.” nity. In fact, we’re just at liftoff.” BB

www.biobusinessmag.com 9 Who’s Watching Asia? Asia’s drug ingredient manufacturing dominance creates worries about shortages and lack of regulations By Nicolas Heffernan

The 29th Olympic Games were a perfect example of the depen- global over the last decade or so, so has the API industry. Fifteen dence the rest of the world has on Asia for the active pharmaceu- to 20 years ago, AIs were almost exclusively manufactured in tical ingredients (API) in drugs. central Europe – namely Italy, Greece and Spain. But now manu- China shut down large swaths of manufacturers, including facturing is almost solely taking place in the developing world – those producing APIs, in the lead up to and during the 2008 sum- over 90 per cent in China and India according to Yadav. And a mer games in Beijing to minimize pollution. study co-sponsored by PricewaterhouseCoopers and published by “There were shortages of API in the market around that time Axendia, Inc. called Achieving Global Supply Chain Visibility, because those factories had shut down for three weeks or four Control & Collaboration in Life Sciences: Business Imperative, weeks in some cases,” says Prashant Yadav, a Senior Research Regulatory Necessity, 70 per cent of industry executives said they Fellow and Director of the Health Care Research Initiative at the have key suppliers in China and 57 per cent in India. Generally William Davidson Institute (WDI) at the University of Michigan. speaking, the larger manufacturers who have made investments at “And people were worried that prices will be going up and there lower costs of capital are in China, while India is essentially a would be a shortage.” finished product producer. Prices did go up, and though there were no shortages, it serves The lack of official oversight and regulation is becoming an as a stark reminder how dependant the world has become on issue, executives say. The majority of the 112 executives from China and also India to provide the active ingredients that serve pharmaceuticals, medical devices, and biotechnology companies as the basis for drugs around the world. around the globe surveyed in the Axendia report acknowledged “The global trail has brought us to a point where events such the issue, with 50 per cent saying they see raw materials sourced as the Olympics in China can drive active ingredient prices up or outside of the United States as the greatest vulnerability to the even create a shortage,” says Yadav. supply chain, and 61 per cent viewing contaminated or noncon- The overall API market was valued at $101.08 billion in 2010, forming raw materials as the top threat in the next five years. and is expected to grow at a compound annual growth rate “At best I would say [AI quality] is questionable,” says Yadav. (CAGR) of 7.9 per cent from 2011 to 2016. The high potency “In many cases we don’t know so it would be inappropriate to say API (HPAPI) market is driving global growth at a fast rate. As whether it’s good or bad. It’ll be fair to say except for finished these compounds are extremely effective in the treatment of can- product manufacturers who themselves put a lot of emphasis on cers, respiratory disorders, and hormonal imbalances, the HPAPI ensuring quality... for the rest, quality of active ingredients is ques- market is mostly driven by the growth in the oncology therapeu- tionable... it’s just uncertain. We don’t know.” tics. The global HPAPI market was valued at $8.9 billion in 2011, “There has been a growing concern over the quality of AI by growing at a CAGR of 8.3 per cent through 2016. health regulators around the world,” says Leona Aglukkaq, As the biotech sector in general has become much more Canada’s Minister of Health.

10 Bio Business May/June 2013 API

The SFDA in China and the Drug Controller General of year in Canada during the last four years with an annual average India are responsible for overseeing the regulation of APIs in their of 193 recalls. In the past, industry has suggested informally that respective countries. “If you look at the SFDA, I think it’s a rea- it costs the sector about $1 million per recall in Canada. If the sonably well functioning authority,” says Yadav. “But if you look at proposed general manufacturing practices (GMP) requirements the Indian regulator, manufacturing comes under a state review... could prevent the need for these recalls, the savings could range every state can have its own set of laws and inspectorates. So between $3.8 million and $15.4 million annually. finished product manufacturing can never be controlled very well In light of these concerns, the federal government is extending in such a fragmented regulatory environment.” The issue in China the drug GMP requirements set out in the Food and Drug is that the quality of AI manufacturing is the responsibility of the Regulations so that they apply to all active ingredients used in finished product manufacturer. drugs for human use and sold in Canada, no matter where in the “Many regulators in developing countries don’t regulate active world they are produced. The amendments will also create a new ingredient manufacturing; they just regulate finished product record-keeping requirement in order to trace the AI from begin- manufacturing,” says Yadav. “So that complicates things because... ning to end in the manufacturing process. The new rules pro- it essentially boils down to whether the finished product manufac- posed will only newly apply to chemical active pharmaceutical turer has a lot of capacity to go and do the inspections themselves, ingredients (APIs). GMPs already apply to the equivalent biolog- which they try to do, but not to the extent that a good regulator ics products (bulk process intermediates or BPIs). can and that’s where the source of all the quality problems start in “It’s a move in the right direction,” says Yadav. “It’s in accor- some ways.” dance with what most countries are doing. … It’s certainly high But a fully functioning regulator would negate the inefficiency time Canada should do it.” and duplicated effort that occurs when individual companies have Indeed, the guidelines Canada has adopted have been in prac- to send their own teams to inspect APIs. Yadav says, “I think if we tice around most of the world for more than a decade. In 2000, wait for China and India to improve their regulatory processes, these guidelines were developed and adopted at the International we’re talking about decades not years,” because of the political Conference on Harmonisation and is known as ICH guideline processes in the countries and how the division of responsibilities Q7. In the years since it was finalized, many industrialized coun- between states and federal governments are structured. The best tries, including the U.S., the European Union, Japan, Singapore bet for a functional regulatory process in the near future is through and Australia, have implemented the guideline in law. industry collaboration, such as initiatives like Rx360 and the “These amendments show our government's commitment to Active Pharmaceutical Inspection Committee. help protect the health and safety of Canadians and strengthen At the same time, both the FDA and WHO’s medicine partnerships with other health regulators," says Aglukkaq. prequalification program are becoming more and more involved The question is where the implementation or enforcement in regulating API sources of products. Manufacturers are being capacity will come from and whether it’s been appropriately bud- asked to produce details of who their API sources are so they can geted for. be inspected. And with 94 per cent of the executives surveyed in the “International regulators are working together more than ever Axendia report saying global product sales outside of the United to ensure the safety and efficacy of pharmaceutical products, States will be increasing in the next few years, 78 per cent saying including Health Canada,” says Russell Williams, President of global sourcing outside of the United States will be increasing and Canada’s Research-Based Pharmaceutical Companies. “Rx&D 76 per cent believing their global manufacturing outside of the supports this collaborative approach as it helps ensure effective United States will be increasing, the issue will become increas- monitoring while promoting efficient use of resources.” ingly important. Yadav acknowledges the effort but says the foreign regulators Yadav says that in order to combat worries about ingredients will always be fighting a losing battle. “There is no way the gov- in the short term, the regulators in countries that are members of ernment agencies will have the resources to do very periodic the ICH or the Pharmaceutical Inspection Scheme should make inspections,” says Yadav. “So they can go once in a year but not any the API quality regulations much more stringent than in the past. more frequently than that so in some ways they could do better if The next step would be better sharing mechanisms. In the like Rx360, they formed their own internal inspection-sharing medium to long term, everyone will have to rely on better func- mechanism.” tioning pharmaceutical regulation in the product’s country of Canada’s pharmaceutical industry has also become much more origin. “There will have to be pressure on the regulators in India global. From 2000 to 2010, pharmaceutical exports and imports and China and that pressure could come through trade-related between Canada and the rest of the world have increased by 250 discussion or negotiations,” says Yadav. “Unless the foreign regula- per cent and 130 per cent respectively. tors are willing to create an equivalent scheme, then it’s hard to There is evidence to support API-related problems being keep sending that number of North American or European responsible for an estimated two to eight per cent of dosage-form inspectors. The exporting counties will have to come up to the recalls in Canada. There were between 135 and 241 recalls per same level.” BB

www.biobusinessmag.com 11 Emerging markets russia turkey

A focused look at four international locations covering everything from industry focus to governmental incentives

By Lindsay Grummett

Biotechnology creates opportunity for was causing a lot of buzz at BIO. Turkey, economic growth and nations considered in addition to Brazil, Russia, India, all to be emerging markets are making this revealed the attractive benefits of setting sector a priority. Emerging markets offer up shop in their countries including future investors the prospect of high returns, but development strategies, core strengths as also come with challenges such as political well as policy and initiatives available to instability or infrastructure issues. push innovation in the field of biotech. About one-third of the BIO Convention attendees were from outside the U.S., and the scheduled programming Brazil Scheduled programming reflected the global perspective including reflected the global break-out sessions focusing on the prom- Contact perspective including ise of international locales. The BRIC Igor Brandão, Project Manager break-out sessions countries had a spotlight series with each of the four nations (Brazil, Russia, India Company focusing on the promise and China) presenting panel discussions Apex Brasil of international locales designed to identify specific initiatives that are driving the pace of biotechnology Strengths innovation. Sugarcane biofuels and the agribusiness. According to The Atlantic, China’s The productivity of Brazil in agri-business economy expanded by $1 trillion in 2012 has grown in the last few years exponen- while Russia and India’s grew by $100 bil- tially. This is due to a huge investment in lion and Brazil’s shrunk. With China’s new seeds and new methodologies. This is economy flourishing, Bio Business focused a strong sector and a positive area for our on an alternative emerging market that country.

12 Bio Business May/June 2013 Emerging Markets

About one-third of BIO Convention attendees were from outside the U.S.

india turkey brazil

Areas of Focus/Growth Pfizer, Janssen, they operate in Brazil, are area that is getting investments from We can split this answer into two big making a lot of money in Brazil and are abroad as well as Brazilian companies. areas. The first one would be agri-business investing a lot in R&D to develop new I think the huge feud for development including biofuels and bioenergy. In these products. We keep saying that Brazil is a is healthcare, health devices, vaccines. I fields we have already developed many stable economy. We had a session yester- believe that the biodiversity that’s in Brazil solutions the public is interested in. Brazil day with my colleague from the invest- will give us many solutions for the prob- has one of the cleanest energy [matrices] ment unit at Apex on the panel. Apex is lems in terms of nutraceutical, pharma- in the world. More than 50 per cent of our not only the export promotion agency, we ceuticals, biomeds and biosimilars. cars already use the ethanol from sugar- also are the FDI (foreign direct invest- cane produced in Brazil. We have the ment) attraction. We have this area that second-largest area planted with iatro- promotes Brazil as an investment destina- genic products. We have one of the big- tion and we provide data to companies gest references in terms of biotech applied who are interested in getting their busi- to agri-business. ness in Brazil. We put them in touch with In terms of health, pharma and inputs, all the agencies that are related to biotech. we have a lot of challenges and there’s a lot We put them in touch with state govern- to be done. The prospective is extremely ments and provide information on tax positive. Brazil houses around 25 per cent breaks and the business environment. of the biodiversity in the world so when I There are a lot of services that are pro- say, “shaping the future,” this is what I vided to companies who are looking to mean. We have the resources and we have invest in Brazil. the talent. We truly believe that Brazil is going to be involved in the production Future and business models that are going to I mentioned bioenergy and biofuels as an appear in the next few years. area where we have an expertise. I can mention that Novozymes is a multi- Policy/Investment national that’s operating in Brazil. They’re Most of the giants of the sector are already investing a lot in this second generation BRAZIL in Brazil. If you look at Amgen, Merck, ethanol. This is one example of a mature

www.biobusinessmag.com 13 Turkey against expropriation. Whatever money RUSSIA you make here, once you pay your taxes Contact you’re free to transfer it anywhere in the Talha Karataş, Project Director world. You also have access to real estate so if you’re an investor you can buy the Company land and own the property. In some coun- Republic of Turkey Prime Minister– tries that is restricted. Investment Support and Promotion We’ve also divided Turkey into zones Agency of Turkey to push particular industries to those areas (auto industry, chemical) so if companies Strengths bring their businesses to the particular Turkey is the 16th largest economy in the area they receive incentives. That’s how world with a population of 75 million. We we’re generating capital. have the largest youth population in European countries which makes for a Future dynamic and stable economy. We set up 2023 goals and we’d like to put Our mission is to increase and attract three per cent of our GDP for research investments coming from overseas. Turkey and development. To reach this target we is very central. People come up with the have to invest in biotechnology, innova- So it’s more cost-efficient to do research counter argument saying Greece is central tion and industrialization. These are the in Russia – that’s probably the key. If the or Italy is central too, but they don’t have governmental goals. project owners are willing to give up rights similar backgrounds with the Middle East to the former Soviet Union for their proj- or North Africa. We can sit down with ect and spend some percentage of their both European and Arabic people. We Russia research in Russia, there’s quite significant have culture ties with every region unlike money to be made. I know a lot of compa- other countries in our area. Contact nies who are doing that. Usually it’s an Alex Ablaev, President American company with some Russian- Areas of Focus/Growth speaking people. There are some really Auto is our primary industry at the Company good examples of companies who received moment, but mining – which is huge in Russian Biofuels Association lots of money to research to get products Canada – is one of our sectoral targets. to the later stage. All energy pipelines go through Turkey. Strengths If Europe has a demand for gas and oil in Russia has money. They’ll give you some Areas of Focus/Growth winter, everything can go through Turkey money and lead you through the registra- The government finally approved a pro- giving us a key role in the energy sector. tion stage all the way up to the market. gram of industrial biotechnology develop- There are a lot of products in development where it indicates a biofuel target Policy/Investment ment right now and we expect to replace and bioplastic targets. Russia has a lot of Let’s say you’re a company and want to most of the biosimilars with expiring resources for large-scale biotechnology invest in Turkey. There’s a 20 per cent flat (expired) patents. production. There’s a lot of support to rate corporate income tax and protection Scientists are relatively cheap as well. push this from a business perspective. However, there are a lot of myths and stereotypes about Russia that we must TURKEY overcome. Russia – especially Moscow – is now extremely European and many people speak English. There’s been a lot of progress here, similar to Brazil. If you’re thinking of bringing business here you should spend some time in Russia and find a trusted partner.

Policy and Investment Over the last five to seven years, the government has begun to recognize the potential of biotech and has enough money from oil sales so they started to fund different areas. First it was biophar-

14 Bio Business May/June 2013 Emerging Markets maceuticals and now they’ve expanded the south of India. Most of the biotech- population which is very, very strong, from that to industrial biotechnology. nology industries are located in our state the middle class. Therefore we have a In terms of biopharmaceuticals, the and in our neighbouring state. Together market. That market allows you to come government funded a lot of academic we do more than 60 per cent of the entire and invest. research. Now, it’s starting to move toward country’s biotechnology. In our state we applied research. The goal is to get that have what is called Genome Valley with Areas of Focus/Growth new product onto the Russian market – lots of big names already operating there. Presently we are focusing on the health- including genetic and biosimilar products. So the purpose of our visit to the bio con- care sector, however, the next focus area is Based on that, we’re trying to build a ference is to make others aware of what the agri-biotech because we have a large competency to start new products. we have to offer. population and we have to feed our peo- India has a large population. For those ple. In India, we have the UN body Future who want to invest and sell, we have a ICRISAT (International Crop Research Now is the time for Russia. We’re getting ready market. We have a middle class Institute for the Semi-Arid Tropics) sta- a lot of money for smart research. You can population that is bigger than the popula- tioned in our country. go to Russia and build a lab finding bright tion of the USA. This is one of our biggest but cheap scientists. strengths. If you look at the entire country, Policy and Investment Russia implements, from the begin- we may not have the per capita incomes or The government has established policy to ning, the best that is available. We’re try- the GDP but we do have a segment of our encourage investments and job creation in ing to follow the general trends of where Andhra Pradesh. We (the government) the rest of the world is going. INDIA understand the industry and the specific needs of the industry. We try to customize our incentive packages to make them India more attractive to the investor. In addition to this, we also hold BIO ASIA. About 60 Contact to 70 countries participate although it’s Eapen Joseph, Branch Head not as big as this BIO conference.

Company Future Stark Communication We are looking for businesses to come and set up shop. We can provide space, give Strengths you the right connections and allow you to India consists of many provinces. We rep- work together with various people. The resent Andhra Pradesh and are located to problem is that people are not aware. BB

www.biobusinessmag.com 15 The Numbers

The world descends on Chicago for Are IN record-breaking BIO convention By Lindsay Grummett

The success of this year’s BIO convention “All the people that we want to discuss can be seen in the numbers. More than business with in Russia come here. It gives 13,500 industry leaders from 62 countries us the opportunity to meet with everyone attended the convention with record- in one place which is unique,” explains breaking 25,573 partnering meetings Yuri Deigin of Pharma Bio in Russia. scheduled between 2,800 companies. This year, Canada topped the list as “I’ve been a regular attendee at BIO for the largest international delegation fol- many years,” says David Main, president lowed by the United Kingdom and and CEO of Aquinox Pharmaceuticals. Germany. Politicians from across Canada top left, clockwise: “It’s probably the premier event for educa- attended the event, offering their support Double helix on the show floor. tion in the life sciences industry, but to the Canadian biotechnology industry The Canadian pavilion was one of the high- what’s more important now is that it’s including P.E.I. Premier Robert Ghiz; lights of BIO in Chicago. really a place that facilitates meeting with Alberta’s Minister of Health, Fred Horne; Cocktails are served following potential partners and potential investors.” Ontario’s Minister of Research and BIOTECanada's Gold Leaf Awards ceremony. Taking place late April in Chicago, the Innovation, Reza Moridi; and Hazel Companies explore the global pavilions to event featured keynotes and sessions from McCallion, Mayor of Mississauga for the find out more about the benefits of doing policymakers, scientists, CEOs and last 34 years. McCallion spoke to the business in that area. offered key networking and partnering crowd in the Canadian pavilion saying, RCMP officers became an attraction for opportunities. The BIO International “I’m very proud that in my city we have international attendees in the Canadian pavilion. Convention is the largest event for the 400 biotech companies and employ biotechnology industry and attracts big 25,000 people in the industry. Healthy Quebec’s Minister of Finance, Nicolas Marceau, spoke to a full house at the players from across the globe with many people and healthy communities mean a Rendez-vous Québec evening reception. companies using the convention as an healthy economy. Bio is a great industry. convention Ladies in lederhosen explained the benefits opportunity to seek out connections, even Think of what it’s doing – not just for of doing business in Germany. from their own countries. Canada – but for the world.” BB bio

16 Bio Business May/June 2013 Bio Convention

chicago attendance... 62 13,500 COUNTRIES INDUSTRY LEADERS 2,800 COMPANIES

www.biobusinessmag.com 17 BIOTECanada hands out Gold Leaf Awards

Aquinox and Okanagan Specialty Fruits take home Early Stage Company honours

By Lindsay Grummett

The Canadian pavilion was the site of the Gold Leaf Awards as BIOTECanada recognized two of the country’s elite companies for the significant achievements they’ve made in the industry. The 2013 Company of the Year award went to Xenon Pharmaceuticals, which secured two major deals in 2012 and are said to have discovery stage assets that should pave the way for future clinical products. Aquinox Pharmaceuticals took home the Early Stage Company of the Year award in the category of Health while Okanagan Specialty Fruits took home the same award in the category of Industrial/ Agriculture.

Aquinox Pharmaceuticals The Early Stage Company of the Year award is given out to pre-commercialized companies who’ve distinguished themselves from their peers through techno- logical innovation or achieved milestones. Aquinox Pharmaceuticals’ primary objective is to develop new drugs for seri- ous inflammation disease with a focus on the treatment of Chronic Obstructive Pulmonary Disease (COPD) and bladder inflammation. “A collection of world-renowned immunologists made a discovery at the University of British Columbia that there’s a certain enzyme that controls how the immune system is regulated on the surface of the lungs, the GI system and the bladder,” says David Main, president convention and CEO. Main saw the potential in this discov- bio

18 Bio Business May/June 2013 Bio Convention ery and formed a company to raise money for drug development. Over the next five years, Aquinox secured approximately $60 million with Pfizer and Johnson & Johnson representing two of their largest shareholders. “It’s a new approach that no one else has,” he says explaining the company’s early success. “Our company is built around very seasoned management teams. We collectively have a strong track record in executing clinical development right through to the approval process. It’s those two things that appeal to investors.” Aquinox moved rapidly through the development stage and is currently working through drug trial studies for its flag- ship product. “Our lead drug is a once-a- day pill that is taken to control abnormal inflammation. We’ve already done two Phase II studies and we’re about to embark on two very large Phase IIB studies.” Main is grateful his company receive the award and says it’s a representation of the Aquinox team’s hard work. “I feel really lucky to work in this industry with people who just love science and want to see that science transformed into something that will help people,” says Main. “You end up dealing with failure more often than you do with success, so to be recognized by your peers is truly appre- ciated.”

Okanagan Specialty Fruits Okanagan Specialty Fruits (OSF) won in the Agricultural/Industrial category and is finding success through a simple, yet novel agricultural concept. The company specializes in the development of tree fruits opposite page: that have value-added traits. The compa- top: Andrew Casey, President and CEO of BIOTECanada, ny’s lead product is a non-browning apple. addresses Canadian politicians and businessmen at the OSF’s team of scientists isolated and opening of the Canadian Cafe. silenced the apple’s polyphenol oxidase bottom: Ontario’s Minister of Research and Innovation, Reza (PPO) gene, whose activity leads to the Moridi, promotes the province’s biotechnology sector at the BIO convention. browning. This means Arctic apples produce less than 10 per cent of the PPO of this page: their conventional counterparts, or not top: Minister of Industry, Christian Paradis (left), and the enough for the apples to brown. Mayor of Mississauga, Hazel McCallion (right) discuss “We’re taking the apple’s own genes business before the opening of the Canada Cafe. and using them in a manner that allows it middle: Neal Carter (centre) stands with the Minister of State (Science and Technology), Gary Goodyear (left), and Andrew to disrupt production of the enzyme that Casey (right), after receiving Early Stage Company of the Year makes the browning reaction,” says Neal (Agriculture) award. Carter, fruit grower, bioresource engineer bottom: David Main, President and CEO of Aquinox and president of OSF. “In terms of genet- Pharmaceuticals Inc., accepts his company’s award for Early ic engineering, it’s a very simple approach, Stage Company of the Year in Health.

www.biobusinessmag.com 19 High School Students By Lindsay Grummett but the end product of an apple that Show Off Smarts doesn’t go brown is incredibly novel. You There was no shortage of geniuses at could spend 10 lifetimes trying to breed at the International the BIO convention this year and a that.” BioGENEius Challenge small group of these intellectuals went The non-browning property of the to Chicago with their research—and a apple will have a wide range of benefits for chaperone. those in every step of the food supply The BioGENEius Challenge is an chain including growers, packers, proces- international competition with the sors, retailers, food service providers and objective of highlighting the out- consumers by reducing food waste, standing biotechnology research being increasing convenience, helping control performed by high school students product quality and allowing for new from around the globe. Students are product options. judged on the quality of their research, “This apple is going to allow the peo- presentation skills, responses to ques- ple who are making it to get a little bit tions testing scientific knowledge and better margins,” says Carter. “It’s going to the potential for commercial applica- change the price point which will really tion. influence sales and that’ll drive apple con- Arjun Nair, 16, and Selin Jessa, 17, sumption. As a fruit grower, that’s good took first and second place respec- for me.” tively in the Canadian finals beating Currently, Okanagan Specialty Fruits out nine other students and earning is working through its first licensing deals them a spot in the international com- for the right to plant the trees, grow the petition. fruit and to use the trademark Arctic Nair investigated a form of cancer brand to sell the product – a typical pro- treatment called photothermal thera- cess for the tree fruits business. Carter says py while Jessa researched genetic vari- the Arctic apple’s royalty structure is on ations found in a small number of the lower end of the spectrum compared HIV-infected patients. to regular apples that lack value-added “Scientists have identified about traits. nine mutations that seem to help “We want uptake. We want people to make HIV weaker in a specific protein do it. We may modify our royalty structure called Nef,” says Jessa. “I selected one later, but, for us, we want trees in the of those mutations and engineered it ground and we want fruit,” says Carter. in the Nef protein and looked at The first step is passing the regulatory whether the mutation had any impact hurdles in Canada and the United States. on the protein function.” Carter is confident in his product, saying, Jessa’s project earned her fourth “We see all indications are that it’ll hap- place and $1,000 in prize money, but pen this year: U.S., Q3 and Canada, Q4. more importantly, solidified her idea In the meantime, we’re out there interact- of a dream career. ing with growers, packers, shippers, sales “I fell in love with all parts of the desks and building interest and excite- research process so I’m really interest- ment.” ed in becoming a scientist,” she says. From there, the company expects a Grade 11 student, Natalie Ng, slow build but anticipates commercial from California was the winner of the planting to occur in the both the U.S. and competition for her research in breast Canada by next spring. “It’s good because cancer and biomarkers. She’ll be we get time to build, grow and educate,” working with a bioinformatics based says Carter who’s passionate about teach- company over the summer and still ing the world the benefits of agriculture hasn’t decided what she wants to do biotechnology. when she grows up. Something tells us In 2012, he spoke to audiences at a that Ng and the rest of the competi- TEDx event offering insight on how bio- convention tors will have promising careers, per- technology can help agriculture meet the haps in the biotech industry. expanding global food demands. While at bio

20 Bio Business May/June 2013 Bio Convention

LIST OF ADVERTISERS & WEBSITES

Bio-Rad Laboratories Page 4 ...... www. bio-rad.com/ad/ngcsystems.ca

BioTalent Page 2 ...... www.biotalent.ca

Caledon Laboratory Chemicals Page 15 ...... www.caledonlabs.com

eppendorf Page 23...... www.eppendorf.ca

The Mayor of Mississauga, Hazel McCallion, talks to the crowd about the benefits of doing Life sciences ontario business in her city. Page 21 ...... www.lifesciencesontario.ca

SHIMADZU BIO this year, Carter gave an encore pre- innovation is the answer to key global Page 7 ...... www.ssi.shimadzu.com/8040 sentation in the Food and Agricultural issues was the recurring message at this Pavilion addressing the need for agricul- year’s BIO conference and Canadian VWR tural biotech saying, “We need this tech- companies, politicians and industry sup- Page 24 ...... www.vwr.com nology if we’re going to feed and sustain porters showed the world that our country our planet and improve our environment.” will be at the forefront of innovation and The concept that biotechnological novel concepts. BB

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www.biobusinessmag.com 21 Business Leadership

Mark Lievonen Leader is recognized for 30 years of commitment and dedication to healthcare

By Chelsea Kowalski

Mark Lievonen just celebrated his 30th year at Sanofi Pasteur, Canada’s biggest vaccine company. He has seen the development of many vaccines come from Sanofi, including the five–component acellular pertussis vaccine, otherwise known as the whooping cough vaccine, which generates benefits for millions around the world. With many more vaccines to come, Lievonen remains nology world, but he notes that it could not have been done focused on continuously improving immunization rates and vac- without his staff to help him. “Multinational companies are cines for Canada. matrix organizations and to ensure everything runs smoothly, I After three decades in the biotechnology industry, Lievonen count on my team of talented and dedicated staff. I truly believe was recently inducted into the Canadian Marketing Healthcare that people are every organization’s most valuable asset.” Hall of Fame. Thirty years at one company could certainly Once he got a taste of the biotechnology field, he absolutely become tedious for some, but he doesn’t see it that way. “Everyday, loved it. Lievonen has been inspired from the start, asking, “How I wake up, excited to go into work. One reason is that the biotech- could you not get motivated?” Through his entire career, he has nology industry continues to grow and so does Sanofi Pasteur.” had mentors who have supported and aided him with advice and Over the years, there have been different goals and mandates, actions. In 1994, the Sanofi BioGENEius Challenge Canada was some of which have been to provide a range of vaccines and make created to help talented high school youths in the biotechnology immunization more accessible. According to Lievonen, the top field. Lievonen used it as an exciting way to become a mentor. His priority is to “have the patient at the heart of it all.” message to the participants is that “it’s important that you pursue With the eradication of smallpox through worldwide vaccina- something you like” and it’s clear that Lievonen took that to heart tion campaigns, Lievonen notes many diseases are still without a before starting his career. vaccine, and sometimes a lack of awareness is the problem. Lievonen says “one significant challenge is the level of government and public awareness of the “Multinational companies are matrix organizations and to value of innovative medicines and vaccines. In ensure everything runs smoothly, I count on my team of Canada, procurement decisions are primarily based talented and dedicated staff.” on the cost of the drug or vaccine, but I hope the conversation will shift to focus more on the overall benefits to the healthcare system.” If anyone can say the biotechnology industry is always chang- Just like Sanofi, Lievonen is a respected leader in the health- ing and reinventing itself, it would be Lievonen. He thinks this is care industry. “I have been in the industry for 30 years. I am important for everyone interested in this industry to know. For honoured to be a part of it and to play a small role in expanding Lievonen, enthusiasm comes with the job. “Knowing that I con- the industry for the economic and social benefit of all Canadians.” tribute to the prevention of disease and saving lives in some small Lievonen has made great advances in the healthcare and biotech- way keeps me motivated every day.” BB

22 Bio Business May/June 2013

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