The tradition started in 2010, to provide bioscience industry leadership with a unique opportunity to connect and discuss industry issues in a relaxed interacitve setting while enjoying a fine meal and refreshments. Building on last year’s positive word of mouth, the 2011 event was over-subscribed. This year, over 50 guests from across Canada came together at, ‘The Rosewater Supper Club’ in downtown Toronto for a cocktail reception before joining tablemates and embarking on the evening’s agenda.

The conversation was enriched by the perspectives of guests from British Columbia and Manitoba in addition to Québec and host province, Ontario. Attendees included industry leadership from therapeutic, device, diagnostic and healthcare IT companies, lawyers with sector and IP expertise; accountants with industry experience in programs such as SR&ED (Scientific Research and Experimental Development Tax Incentive Program) and financial and capital market executives.

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CEO-LED ADVOCACY WINS $3-MILLION FINANCING FOR
EXPORT-FOCUSED ONTARIO BIOSCIENCE COMPANIES

New treatments and technologies for common diseases have global market potential

TORONTO (July 27) – Four Ontario bioscience companies engaged in the development of groundbreaking new drug therapies and a diagnostic screening technology have each been awarded up to $1 million in financing to fund clinical trials and facilitate commercialization. The financing comes as the result of a report by the CEO-led Ontario Bioscience Industry Organization™ (OBIO™) that was presented to the Government of Ontario in 2009.

Following release of OBIO’s report, “Industry-Generated Recommendations for Sustainability and Growth of Ontario’s Bioscience Industry in 2010 and Beyond”, the Government of Ontario announced an initial, one-time special financing of $7 million exclusively for Ontario-based bioscience companies. Funding was awarded by the Investment Accelerator Fund of the Province of Ontario.

Gail Garland, President and Chief Executive Officer, Ontario Bioscience Industry Organization, said: “OBIO is pleased to see deployment of the funds get underway. Our industry CEOs devoted many hours of volunteer time to developing OBIO’s recommendations which, if implemented in full, will ensure a thriving bioscience sector to help grow Ontario’s knowledge economy.”

Dr. Niclas Stiernholm, Chief Executive Officer of funding-recipient Trillium Therapeutics Inc., said: “This new round of financing is pivotal, because it will help fund clinical trials of a promising unique new therapy that has the potential to become a global export. We are grateful for OBIO’s advocacy to government and the resulting funds as they will enable us to start clinical trials this year.”

Financing recipients, all of whose therapies and technologies address unmet clinical needs on a global scale, are:

Cytochroma Inc., of Markham, to accelerate development of capsules for the treatment of a form of hyperparathyroidism associated with vitamin D deficiency in patients with chronic kidney disease (CKD). More than 28 million people in North America have CKD, which has high morbidity and mortality.

Profound Medical Inc., of Toronto, to advance commercialization of its unique minimally-invasive treatment of prostate cancer that combines the clinical efficiency of ultrasound thermal therapy with the imaging capabilities of MRI to achieve an unmatched level of precision in treatment of the prostate.

Trillium Therapeutics Inc., of Toronto, to fund clinical trials of a unique new therapy for interstitial cystitis (IC), a common chronic disease of the bladder, that, unlike existing therapies, treats the cause of IC rather its symptoms. IC affects more than one million North Americans – 90 percent of them women – and millions more around the world. Urination may be as frequent as 60 to 70 times a day, making it difficult for patients to hold full-time jobs.

Xagenic Inc., of Toronto, to advance commercialization of its revolutionary chip-based diagnostic screening technology that provides rapid, on-demand, sample-to-answer detection of pathogens in less than 30 minutes instead of the days that physicians and patients are accustomed to waiting.

About OBIO

Ontario Bioscience Industry Organization (OBIO™) is Ontario’s leading advocate for the life-science sector. A private sector, membership-based organization, OBIO engages in policy advocacy and government relations activities to enable successful development and commercialization of life-science technology through investment, strategic alliances, stakeholder engagement and industry promotion.
OBIO is supported by Members and Sponsors, among whom are Amgen Canada, AstraZeneca Canada, BDC, Eli Lilly Canada, Gowlings LLP, HealthComm, Merck, Norton Rose LLP, Novartis Canada, Pfizer Canada, PricewaterhouseCoopers, Purdue Pharma Canada, RBC Royal Bank, Sanofi, Torys LLP.
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Further information: Gail Garland – 416-575-7805 / gailgarland@obio.ca; Joan Lister, HealthComm – 905-206-1025 x 222 / lister@healthcomm.ca

For most of the past decade, the rallying cry of the Ontario life science industry has been “commercialization is key.” Now, more than ever, that message rings true, but it has also evolved, and as it stands, the Ontario bioscience industry is looking for investment, incentives and the capital it needs to be the juggernaut most believe it can be. The plan to get the province to that point is what OBEST(TM), the Ontario Bioscience Economic Strategy Team hopes to bestow upon the industry… [More]

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The Best Laid Plans

How OBIO(TM) is looking to overcome the past, change the course of the bioscience industry in Ontario and steer the ship out of the storm.

By: Christopher Rogers
Biotechnology Technology Focus
December 2010/January 2011

Innovation and Bioscience go hand and hand. It is a symbiotic relationship – both depend on one another. Yet, for Ontario, a province teeming with groundbreaking initiatives in the bioscience field, there is something missing. A broken link between this would-be flourishing industry and reality. True, the recession of 2008 to 2009 hit the industry hard, but the seeds of insufficiency were planted far earlier.

For most of the past decade, the rallying cry of the Ontario life science industry has been “commercialization is key.” Now, more than ever, that message rings true, but it has also evolved, and as it stands, the Ontario bioscience industry is looking for investment, incentives and the capital it needs to be the juggernaut most believe it can be. The plan to get the province to that point is what OBEST(TM), the Ontario Bioscience Economic Strategy Team hopes to bestow upon the industry.

Created by OBIO (Ontario Bioscience Industry Organization), in response to a call to action from OBIO’s CEO’s to develop and implement a strategic plan for building a competitive bioscience industry, OBEST takes a grass roots approach to fashioning a plan for a commercially viable, competitive, bioscience community in Ontario.

Since its initial launch in late September 2010, OBEST has already seen good participation from the community, and as the program wraps in February 2011, that participation is quickly being turned into an action plan.

Gail Garland, CEO, Ontario Bioscience Industry Organization, explained that in the larger scheme of things, OBEST is really about facilitating innovation and delivering economic prosperity and health to Ontarians.

“OBEST engages the Ontario bioscience ecosystem in a collaborative, iterative process, aimed at bringing the best ideas forward with which to support the growth of an innovative bioscience industry,” she said.

The backbone of that ecosystem is already in place and OBEST looks to take advantage of all the pieces, including: Ontario’s well educated populace, productive educational institutions, and significant levels of direct- and indirect- government support for research and development. Certainly, these are the foundations upon which a thriving industry can be built. These pieces form an opportunity, while OBEST looks to overcome the current crisis.

Garland outlined both sides of the story, saying on one side there is opportunity in, “the gap created by the decline in Ontario’s manufacturing, plus the opportunity to compete in a knowledge based industry. The critical need for affordable and better healthcare – the opportunity to deploy our highly educated workforce and exploit our world-class based research. Ontario can be a natural home for a vibrant, innovative, bioscience industry that creates wealth and innovative healthcare solutions.”

OBEST is built around three strategic pillars: an advisory board, a task force and seven regional clusters of bioscience industry professionals. Each of the regional clusters meets three times and the results of these assemblies is presented to the advisory board, which meets four times. The OBEST task force, acts as the go-betweens, champions and facilitators of the process.

“The OBEST task force are the real heroes of the OBEST process,” Garland said. “This dedicated group has met weekly since September to plan next steps, work with the regional leadership, to organize the regional cluster meetings, to develop and populate an e-room, to support all of our efforts and provide a forum for us to have an ongoing dialogue – the OBEST task force is the glue that holds everything together.”

OBEST is more of a process than an organization. The outcome of the process will be a final plan in the form of a report which will lay the five-year path for Ontario to follow down the road to bioscience stardom. The report is due following the final advisory board meeting in February 2011.

“The overall picture is a five-year time frame but we were very conscious of the fact that we would not have something that is only metrics,” Daniel Billen, chair of the OBEST Advisory Board, said. “Our recommendations will be structured in such a way that it’s an overall five-year umbrella with metrics along the way with what do we want to accomplish by year one, two, three etc.”

It is an innovative process but how does OBEST plan to succeed where others have failed?

David Young, chair of the OBIO board of directors said that strategic plans have been introduced by government but there was never a clear strategy for implementation.

“To me, this process is industry’s reaction to being responsible for its own destiny, and I think it starts to overcome some of that cultural inertia where we think government has the primary role,” he said. “I think in this case, what we’re seeing is that each of the stakeholders have a responsibility for creating an environment for success and creating broad based change. I think that perhaps the most important point here is that government is an important partner, but you need everyone working off of the same play-book, and I think OBEST might be the first instance of this in Ontario.”

Sean Thompson, head of the OBEST task force, sees the goals of OBEST as noble.

“I think one of the things that unites us here together is that we’re here for a greater cause – and I think that cause is the reason why a lot of us are working in the area of human health sciences,” Thompson said. “This is a noble cause and, we as beneficiaries of this tremendous province have an obligation to create a much better province at the end of our lifetimes.”

Thompson joined the task force in September of 2010. He said the first meeting was small, with only four or five participants but by the second week, that number had more than doubled. Thompson said the task force is made up of members from various industry sectors – from quasi-government agencies to private companies, “just a group of hard working volunteers who wanted to be part of building significant change in the province.”

The task force has the most arduous schedule – meeting weekly to make sure the entire OBEST process stays on the rails.

Each of the task force members is responsible for one of the seven regional clusters – with clusters big enough to warrant two task force members. The task force spends much of their time simply getting the word out and drumming up support for the regional meetings.

Already over 120 stakeholders have participated in the OBEST process. And, the task force has also prepared a number of case studies based on other worldwide jurisdictions with similar requirements to Ontario.

The research is made available to the OBEST community through an electronic portal, which has been set-up to also facilitate discussion during the off-periods between meetings. Young also said that it creates transparency in the process.

“This way there is an open democratic integrity to the process so that you don’t see any one group potentially hijacking the OBEST process – and essentially I think the process can have a lot of weight behind it because of the board constituency behind it.

One of the potential flaws here is that one group would be advocating for their own interests instead of the interests of the province and the sector as a whole, so that transparency is a great check,” he said.

When the regional clusters come together – they discuss the needs of their constituents and identify their strengths and where they need assistance. Garland highlighted some of the findings, “Among the strengths, we identified: strong academic research; clinical infrastructure, and diverse population base; focused research priorities with programs such as the Ontario Institute for Cancer Research; a strong pipeline of early stage IP and startup opportunities; and a good business environment in Ontario.

“Weaknesses: no receptors; no large multi-national corporation to spin-out ideas and manpower; access to capital issues; a lack of industry ready talent; a lack of a mind-set for building a viable industry; challenges commercializing academic IP, limited mentoring and a negative perception on access to the local market.”

Garland also said that the groups have identified threats to the industry as well as opportunities for success.

“We talked about the healthcare budget – opportunities to partner with hospitals, creative financing solutions, the strengths of the Canadian brand. That was a really interesting finding – how many discussed the strength of the Canadian brand,” she said.

Garland said threats include undervalued companies, the loss of ROI to the implicit investor, and that Ontario imports so many healthcare products, yet, develops and manufacturers so few of them.

The process has, so far, culminated in the creation of four goals that OBEST feels address the needs of the bioscience community: capital; capability and people; innovation adoption and export; anchoring the industry. There are also two themes which permeate the findings: culture, and integration.

Billen reiterated that capabilities and people are very important to a successful outcome.

“The overall goal is how are we going to support, retain and attract entrepreneurs and skilled personnel to deliver innovation and achieve consistent growth of high value jobs in this sector,” he said.

Billen commented that sometimes we have the right research but that does not mean we have the right people for the job.

As far as determining the success of the project, Billen sees job creation as a key metric.

“The success of the project is going to be employment in the sector – people are not going to employ or create high-value jobs if the business is not successful – if it’s not sustainable,” he said.

The next step for OBEST involves going back to the regional clusters for discussion around these six key areas.

Thompson is very optimistic about the outcome of the OBEST process.

“…I’m so incredibly heartened by the tremendous response from all the CEO’s who have come together to create OBIO and the subsequent engagement of the much larger network because at the end of the day – it’s only by working together that we are able to make change.”

The 2010 OBIO Survey speaks to the persistence of challenges in accessing capital and impediments to accessing both funding and markets. The survey serves as a scorecard for existing government programs and as an important source of industry-led ideas for supporting the growth and commercial potential of Ontario’s life sciences sector.

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Economic strategy team tackles challenges facing the future of Ontario health-science companies

Once the world’s third largest biotechnology cluster, province’s bioscience sector now struggles for survival. Industry leaders map out evergreen strategy for sustainability
TORONTO, November 10 – Thought leaders from every facet of Ontario’s
health-science sector and all regions of the province, working together on the Ontario Bioscience Economic Strategy Team (OBEST™), today announced the initial phase of an evergreen strategy for sustainability of the province’s health-sciences industry. Innovative ideas are being sought from everyone with a stake in the industry, said a spokesperson for OBEST™.

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In the summer of 2009, the CEOs of Ontario’s SME bioscience companies came together at the open invitation of Ontario Bioscience
Industry Organization (OBIO) for a meeting hosted in Gowlings Toronto boardroom. On the agenda was a discussion of the future of Ontario’s bioscience industry and its unprecedented lack of access to capital, a worsening situation threatening the sustainability of the industry.

OBIO’s objective for the meeting was to facilitate the start of a dialogue with industry CEOs which would be ongoing, inclusive, transparent and democratic. The assembled CEOs responded to the need to develop a robust industry dialogue and an industry action plan. Out of this call to action, six dedicated CEOs (Table 1) volunteered to organize their regional colleagues into working groups for the purpose of developing ideas to stabilize and grow the bioscience industry in Ontario and identifying important government programs, which could be modified to enhance the sustainability of Ontario based biotech companies. Each group was responsible for producing a set of draft recommendations which would be presented by Working Group Leaders to OBIO.

Equicom Inc., a Toronto based investor relations firm, worked with OBIO to summarize input from the working groups: to identify the priority programs, specific recommendations for improvement and possible future areas to review. Findings were then prioritized and voted on by CEOs across the province as part of an online consultation and vote held in October 2009.
Working within extremely tight timelines in order to present recommendations to the Government of Ontario by early November 2009, a team of volunteers and industry experts worked 24/7 to analyze the data and produce a report detailing:
•     key fiscal challenges faced by companies;
•     industry recommendations for changes to existing government programs, and
•     anticipated impact of increased eligibility on the ability of bioscience enterprises to operate.

The top seven fiscal issues facing Ontario’s bioscience companies, as identified by industry CEOs, are shown in Table 2. Not surprisingly, the two top issues facing Ontario bioscience companies are: raising external finance and maintaining working capital. Also not surprising, given the top two issues, is that ‘survival’ made it into the top seven.

Based on their Working Group dialogues and further development with OBIO online consultation, CEOs identified five specific recommendations which focus on changes to three existing government programs (Table 3), all of which target short-term relief for the Ontario bioscience industry and may, if necessary, be modified within the next fiscal year.

For each of the above-mentioned government programs, CEOs identified changes to existing eligibility criteria which, if made, would benefit their companies and have a direct economic benefit for Ontario. They quantified and ranked the impact of program changes on their business using seven criteria: Gain Eligibility (qualify for the program); Extend Runway (ability to continue core operations); Add Jobs (create additional positions); Increase Investment (ability to attract capital investments); Increase Sales (increase in top line sales); Ontario Base (continue operations in Ontario), and R&D Spend (increase R&D expenditure). A summary of recommended program changes and their impact on bioscience companies is summarized in Table 4.

More than $120 million in the BIP program remained uncommitted at the end of 2009. Owing to lack of performance, the BIP program as currently structured will probably be closed. In that event, a window of opportunity would open for unspent monies remaining in the BIP program to be rapidly deployed in order to assist Ontario’s cash-starved SME bioscience companies. While the money would come from the BIP program, deployment might logically be done using a framework already in place for existing programs. Such a framework might be, for example, a modified OETF or Investment Accelerator Fund (administered via Ontario Center of Excellence) for structuring and due diligence, but with eligibility criteria tailored to meet the needs of the bioscience industry.
Since publication of OBIO’s report in early November 2009 (available at: www.obio.ca), numerous discussions have taken place with senior government officials, elected representatives and stakeholders who understand and value the contribution a strong bioscience industry can make to Ontario’s economy. Ontario CEOs have begun meeting with their MPPs, engaging them in discussion about the role of the bioscience industry as a vital engine of Ontario’s future knowledge economy. It is a good story. Let’s hope Ontario’s bioscience industry survives to tell it.

• First and foremost, as entrepreneurs our duty is to create shareholder wealth with products and services the marketplace demands.  This cannot be substituted with or diverted by any government funding program.
• Quebec:  Tax holidays for key employees; tax exemption for new products developed in Quebec
  • Quebec’s SR&ED tax credit regime is a differentiator, especially when combined with the Investment Quebec loan guarantee program
  • Ontario:   Emerging Technology Fund has the potential to be very helpful if bioscience companies could access it.
  • Federal:  Amendment of Section 116 tax code, should increase access to capital by non-residents and in particular venture capital and private equity funds.  This will help put Canadian companies on an even footing to compete globally

As a Quebec/Ontario CEO what are the strengths of your sector?

• In Quebec the creation of Teralys Capital is seen as beneficial as long as the venture captil funds that it finances invest in the life science sector
• In Ontario the formation of OBIO to represent the CEOs of the industry helps move the agenda of the bioscience industry forward so companies can get beyond life-support

What advantages do other jurisdictions (i.e. USA) have?

• The US government procurement policy is very nurturing to small business and innovative early-stage businesses.   The SBIR program is a massive engine that fuels hundreds of life science start-ups per year.
• US companies do not go public as early and are better capitalized when they do
• Germany has invested heavily for the last decade in the biotechnology and has a strong industry with over 400 health-related biotech companies

What opportunities does the Quebec-Ontario biocorridor represent?

• Encourage mergers and acquisitions to leverage strengths and build stronger companies
• As a biocluster Quebec and Ontario become one of the largest clusters in North America and increase their marketing strength to outside investors
• Increase understanding in both provinces of the amount of money and time required to take a product to commercialization
• Expand the value proposition that bioscience offers to the economy of both provinces and to Canada

What single action can we take to build the Quebec-Ontario biocluster?

• Ontario spends $46B on healthcare – challenge is making the spend more effective
• Ontario, as both a healthcare payer and provider should be:
  • A funder of life science companies that can help improve the effectiveness and efficiency of our $46B healthcare spend
  • A lead customer and early adopter of these products and services

• Provide more grant money to life science companies
• Make public companies eligible for SR&ED
• Flow through share programs used successfully in mining represent a model for a program that could be both feasible from a public funds perspective and compelling to industry
• Flow through shares to biotech companies
• Re-engage Canadian investors in this sector
• More events like this evening’s dinner to encourage discussion and create natural opportunities for mentoring.

The panel presentations are archived within the “Ministry of Research and Innovation” folder at:   http://hosting.epresence.tv/UTM/1/Page/Published/99.aspx
Click on the “OBIO – OETF Launch Panel” event.  Password: OBIO