Canada is in serious danger of becoming the world’s laggard in terms of biotechnology research and development and is already falling off the pace, according to experts in the industry.
The Conference Board of Canada Tuesday published a report called “Biotechnology in Canada: a technology platform for growth” as a call to action. “Biotechnology platforms are emerging in the world’s most advanced countries, and Canada has the potential to capitalize on this platform as well,” the report states.
But there are currently impediments that must be overcome in order for Canada to take advantage of any potential in the field, said Trefor Munn-Venn, the report’s author and principal research associate in the Conference Board of Canada’s innovation and knowledge management group.
“Canada is where it usually is in some ways: we’re not bad but we’re not great. The rest of the world is moving really, really quickly and focusing really intently on biotechnology,” said Munn-Venn.
The largest obstacle, he said, is funding – finding the risk capital for research and the commercialization of biotechnology products. “Investors in Canada are a little bit cooler than they are in the united States and other parts of the world. Even Japan, which hasn’t had a robust history of risk capital is seeing risk capital come on strong as it relates to biotechnology,” he explained.
The industry has certainly suffered in recent years, said Mark Smith, IT operations manager for Caprion Pharmaceuticals based in Montreal, and lack of funding is a principal cause.
“It’s pretty frustrating,” he said. “It doesn’t matter how attractive your product and your company looks on the books — you could go to market and just find that there’s nobody there.”
The problem hasn’t escaped the notice of government. Ontario Premier Dalton McGuinty gave a speech on Monday at the opening of the MaRS research centre in Toronto and noted that the province needs to make funding a priority. McGuinty said he will appoint an Ontario Research and Innovation Council to advise him on how best to spend the $1.7 billion the province has earmarked for investment in R&D for biotechnology and other research areas.
But it may take some fresh success stories in biotechnology firms to begin to draw the interest of venture capitalists, said Smith. Stricter regulation around accounting practices in Canada may help make that a reality, he added – the nation may need a piece of legislation like Sarbanes-Oxley in the U.S. which came to light following the Enron scandal.
The Nortel situation, where the firm was investigated for alleged accounting fraud, was an important lesson for all Canadian enterprises, he added. “I think what went on with Nortel was painful, but I think it was important to get our financial houses in order.”
Canadian biotech firms also face the challenge of competing for resources, said Munn-Venn, particularly when it comes to find a skilled labour force. “If biotech is anything, it’s a talent war,” he said, adding that the nation must be open to collaborating with talent in the U.S. and overseas. “This is a knowledge-based business and no one has a monopoly of that knowledge.”
Canada could take a lead from Singapore, he added, which has committed resources to the advancement of biotechnology. When the nation opened “Biopolis,” a state-of-the-art research facility designed to draw the best minds in the field, it declared biotech to be the future of the country.
In that regard, Canada may be hampered by its success in other fields, from manufacturing to information technology and as a result, “we’re not prepared to really make the hard decisions to focus on a few particular areas that are going to springboard us into global leadership positions,” he said.
“We are beyond the point of discussing whether or not Canada should embrace biotechnology as a technology platform for growth,” wrote Munn-Venn in his report. “It would be like discussing whether or not we should embrace electricity or the Internet. It is no longer a matter of if we should establish a biotechnology platform but how we will establish it.”