Biotechnology Focus December 2017/January 2018

INSIGHTS FOR THE LIFE SCIENCE INDUSTRY

DECEMBER 2017/JANUARY 2018 VOLUME 20, NUMBER 6

The Importance

of Strategic Outsourcing

Special Report:

The key

Publication Mail Registration Number: 40052410

to a successful therapeutics company in Canada

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FEATURES

contents December 2017/January 2018 – VOLUME 20 – NUMBER 6

10

Blockchain and the future of outsourcing in biotech

Can blockchain technology help biotech firms improve their outsourcing process?

(By Nestor Arellano)

11

The Importance of Strategic Outsourcing to Life Science Companies Important disciplines for an early-stage or emerging life science company (By Jeffrey Graham)

21 Outsourcing Directory Listing A compilation of companies that outsource from around Canada (Compiled by Michelle Currie)

26

Plant-made pharma specialist faces challenges of outsourcing to grow business Pick-up some key outsourcing dos and don’ts from the experiences of Ontario’s PlantForm Corp.

(By Nestor Arellano)

28

13

20th Anniversary Special We continue our celebration of Biotechnology Focus’ twentieth anniversary as we approach the new year (By Shawn Lawrence )

Special Report: Outsourcing Landscape for Therapeutics Development in Canada.

The key to a successful therapeutics company (Robert Merson and Brian Bobechko)

DEPARTMENTS 6

Research news

8

Business corner

31 Calendar of events

www.biotechnologyfocus.ca

in every issue

30

The Last Word

A look ahead at biotech and pharmaceutical outsourcing in Canada (By Jean-Francois Denault)

December 2017/January 2018 BIOTECHNOLOGY FOCUS 3

PUBLISHER’S note PUBLISHER/ EDITOR-IN-CHIEF

Terri Pavelic

Editor

Nestor Arellano

Writer

Michelle Currie

CONTRIBUTING WRITERS

Shawn Lawrence

Jeffrey Graham Robert Merson Brian Bobechko Jean-Francois Denault GRAPHIC DESIGNER CONTROLLER MARKETING MANAGER

A small but significant step towards addressing Canada’s intellectual property regime shortcomings In this issue of Biotechnology Focus, we will be discussing outsourcing. A topic defined as “a business practice used by companies to reduce costs or improve efficiency by shifting tasks, operations, jobs or processes to an external contracted third party for a significant period of time.”

Our special report by Robert Merson and Brian Bobechko goes in depth about the outsourcing landscape for therapeutics development in Canada. It highlights the keys to a successful therapeutics company, and how to engage and manage best partners to advance technology through pre-clinical, clinical, manufacturing and regulatory stages of development as part of an overview of the current landscape for outsourcing therapeutics development in Canada.

Sticking with the outsourcing theme, we have a contributed piece by Jeffrey Graham, a partner at Borden Ladner Gervais LLP, who reviews the importance of strategic outsourcing while outlining the important disciplines for an early-stage or emerging life science company. Find out more in the story, The importance of strategic outsourcing to life science companies.

Our second feature is written by Nestor Arellano and examines the challenges that outsourcing can pose when trying to grow your business. Pick up some key outsourcing do’s and don’ts from the experiences of Ontario’s Plantform Corp.

Additionally, we have compiled a directory near the end of the issue with the Canadian companies that offer outsourcing services to help you grow your business.

In our Last Word editorial, professional marketing consultant Jean-Francois Denault takes a look at how outsourcing in the life science sector is changing. To find out why, read his piece: A look ahead at biotech and pharmaceutical outsourcing in Canada.

This is also the last anniversary issue to look back at the past twenty years of Biotechnology Focus. Let’s raise a glass during this festive season and toast to the many individuals that have strived to accelerate the life science industry and continue to make scientific advancements a commercial reality.

4 BIOTECHNOLOGY FOCUS December 2017/January 2018

Elena Pankova John R. Jones Melisa Sukhdeo

CIRCULATION DIRECTOR Mary Labao circulation@promotivemedia.ca Tel: 905-841-7389

EDITORIAL ADVISORY BOARD Christine Beyaert, Roche Canada; Pierre Bourassa, IRAP, Montréal; Murray McLaughlin, Sustainable Chemistry Alliance; Ulli Krull, UTM; John Kelly, KeliRo Company Inc.; Peter Pekos, Dalton Pharma Services; Robert Foldes, Viteava Pharmaceuticals Inc.; Gail Garland, OBIO; Barry Gee, CDRD; Bonnie Kuehl, Scientific Insights Consulting Group Inc.; Raphael Hofstein, MaRS Innovation; Roberto Bellini, Bellus Health; Peter van der Velden, Lumira Capital; Albert Friesen, Medicure Inc.; Ali Tehrani, Zymeworks Inc.; Dr. Jason Field, Life Sciences Ontario; Andrew Casey, BIOTECanada

Biotechnology Focus is published 6 times per year by Promotive Communications Inc. 1-226 Edward Street, Aurora, ON L4G 3S8, Phone 905-727-3875 Fax 905-727-4428 www.biotechnologyfocus.ca E-mail: biotechnology_focus@promotive.net Subscription rate in Canada $35/year; USA $60/year; other countries $100/year. All rights reserved. No part of this publication may be reproduced without written consent. Publications Mail Registration Number: 40052410 Return undeliverable Canadian addresses to: circulation department – 1-226 Edward Street, Aurora, ON L4G 3S8 National Library of Canada ISSN 1486-3138 All opinions expressed herein are those of the contributors and do not necessarily reflect the views of the publisher or any person or organization associated with the magazine.

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R&D news Medical cannabis firm launches cancer research Vancouver-based Veritas Pharma Inc. is assessing the effects of select cannabis strains on several human cancer cell lines.

The early-stage pharmaceutical and IP development firm is specifically investigating lung, prostate, colon, breast, and melanoma cancer cell lines. The company’s research arm, Cannevert Therapeutics Ltd. will provide the required cannabis strains and oversee the implementation of the project.

In the current medical literature, there is insufficient scientific evidence that demonstrates cannabis or cannabinoids

can cut the risk of cancer in people, according to Veritas. Most cancer scientists focus on understanding how different cancers respond to specific compounds in cannabis.

However, Franciosi hopes his company can prove that cannabis can be used to treat cancer. Cannevert also aims to develop cannabis strains (cultivars) for treating pain, nausea, epilepsy, and PTSD. To see this story online visit http://biotechnologyfocus.ca/medical-cannabis-firm-launches-cancerresearch/

Novo Nordisk releases new basal insulin for diabetics

Novo Nordisk Canada Inc. announces the availability of Tresiba in Canada. It is a new basal insulin for the once-daily treatment for adults with diabetes mellitus to improve glycemic control. Tresiba is dissimilar from other basal insulins, providing a duration of action beyond 42 hours with a flat and stable glucose-lowering effect. It has been shown to provide a risk of overall nocturnal and severe hypoglycemia but is the first insulin to be added to Canada’s national Register of Innovative Drugs by Health Canada since its inception in 2006.

Hypoglycemia, also known as low blood sugar, is one of the most common side effects of insulin therapy. It is more likely to occur when the level of glucose in the blood drops below normal. The incidence of severe hypoglycemia in the Canadian population with diabetes is estimated to be 1.9 and 2.6 episodes per patient per year in patients with type I and II diabetes, respectively, while

Scanning for skin cancer with the sKan It is called the sKan. It’s basically a handheld scanner which could one day help physicians detect melanoma painlessly and more accurately.

The device was developed by a team of students from McMaster University as part of a class project during their final year.

Recently, the work of Michael Tekla, Rotimi Fadiya, Prateek Mathur, and Shivad Bhavsar, now all graduates of the university’s Electrical and Biomedical Engineering program, bagged the James Dyson Award. With that recognition comes the prize money of $50,000 to support the futher development of the sKan. Current methods of diagnosing skin cancer are based on visual inspection. Doctors obtain qualitative information based on skin spots they see on a patient’s skin. The information helps doctors decide which patients are candidates for a biopsy.

The sKan offers an improved method of recognizing melanoma. The device creates a thermal map of the region of the skin being inspected. The sKan then provides a quantitative measurement for diagnosing skin cancer.

The team now hopes to develop their device until it receives medical approval as a clinical tool that would assist doctors with their diagnosis. The team also believe the sKan could one day become a household device that would allow individuals to easily conduct melanoma checks in the comfort of their homes.

the incidence of non-severe hypoglycemia is estimated to be 102 and 66 episodes per patient per year. Severe long-term complications of hypoglycemia include micro and macrovascular complications. Nocturnal hypoglycemia may be the most common type of hypoglycemia in individuals with diabetes using insulin. It often goes undetected and may lead to unconsciousness and death in severe cases.

Health Canada approved this once-daily treatment based on an extensive clinical trial for glycemic control on type I and II diabetics. The most common side effects from Tresiba are hypoglycemia, allergic reactions, injection site reactions, lipodystrophy, pruritus, rash, edema, and weight gain.

To see this story online visit http://biotechnologyfocus.ca/novonordisk-releases-new-basal-insulin-fordiabetics/

6 BIOTECHNOLOGY FOCUS December 2017/January 2018

To see this story online visit http://biotechnologyfocus.ca/scanningfor-skin-cancer-with-the-skan/

R&D news

‘Chemo brain’ likely not caused by cancer therapy alone say researchers

For years cancer patients have complained of experiencing memory and thinking problems that occur after cancer treatment. The condition, which has been called “chemo brain” or “chemo fog,” has been thought to be a chemotherapy-related cognitive impairment. However, researchers from the University of Toronto have recently found evidence that the dysfunction could be partially the cause of cancer itself.

The U of T team conducted an experiment where they found that female mice with a form of breast cancer demonstrated impaired performance on learning and memory tests before chemotherapy drugs were administered.

Researchers were able to identify three different brain changes caused by the progression of cancer and the drugs used in treatment, according to the U of T news site.

As the tumour develops, the body’s immune system responds by releasing cytokines to inhibit the cancer’s development.

Researchers discovered that the body’s re-

U.S. biotech firm claims gene editing first The stocks of a California-based biotech company shot upwards by more than 10 per cent to US$14.30 following the announcement that their company was able to successfully edit the DNA cells of a patient with Hunter’s syndrome.

Sangamo Therapeutics Inc. released the results of its Phase I/II clinical trial for evaluating SB-913 – an investigational in vivo genome editing therapy for people with mucopolysaccharidosis type II (MPSA-II).

Sangamo’s approach for treating MPS II involves using genome editing to insert a corrective gene into a precise location in the DNA of liver cells. The goal is to enable the patient’s liver to produce a stable supply of an enzyme the patient currently lacks.

Without that enzyme, called iduronate2-sulfatase (IDS), people with MPS II suffer debilitating buildup of toxic carbohydrates in cells throughout their body.

According to Sangamo, its approach differs from other editing methods because of its ability to permanently and precisely integrate the therapeutic IDS gene.

Sangamo’s genome editing therapeutics for hemophilia B and MPS I are also being evaluated in two other clinical trials in the U.S.

action causes inflammation in the brain’s nervous system, which impacts its function.

Chemotherapy, meanwhile, was found to limit the production of new brain cells in regions responsible for memory function, which leads to a loss of memory.

Researchers found that prior to treatment, mice with tumours performed worse on learning and memory tests compared to their normal counterparts.

After chemotherapy, the performance of cancerous mice worsened and the noncancerous mice also showed signs of cognitive impairment.

This study was done in collaboration with researchers at the Princess Margaret Cancer Centre and U of T, and supported by the Canadian Institutes of Health Research, the Canadian Cancer Society, and the Canadian Breast Cancer Foundation.

To see this story online visit http://biotechnologyfocus.ca/ chemo-brain-likely-not-caused-bycancer-therapy-says-researchers/

To see this story online visit http://biotechnologyfocus.ca/u-s-biotech-firm-claims-gene-editing-first/ December 2017/January 2018 BIOTECHNOLOGY FOCUS 7

BUSINESS corner Pharmed conference puts the pieces together on outsourcing Pharmed Canada recently held the only Canadian conference dedicated to the manufacturing and outsourcing in pharmaceutical and healthcare industries in Mississauga, Ontario. It was the first conference of its kind to discuss the impact and trends throughout the country.

There were many small to mid-sized enterprises (SMEs) that gathered at the conference to facilitate networking and learn more about the growing and beneficial partnership opportunities within the pharmaceutical community. With more and more big pharma companies deciding to delve into contract research and development and

with the worldwide pharma market expected to hit $1.3 trillion by 2021, outsourcing should become more than a thought – it will be needed.

There has been a steady growth of CMO’s and CDMO’s since 2015 that lends the impression that outsourcing has become more prevalent and an unequivocally favourable option.

There were many speakers that presented on topics such as global outsourcing and manufacturing trends, Good Manufacturing Practice Review (GMP) updates, evolving outsourcing models, biosimilars challenges and opportunities, as well as building

a Canadian manufacturing strategy. The key speaker, Gil Roth, president of the Pharma and Biopharma Outsourcing Association (PBOA), a US-based trade association representing CMOs and CDMOs, spoke in-depth about the regulatory and business issues for Canadian and US companies.

The conference was of great insight into the outsourcing community and how it amalgamates companies across the country.

To see this story online visit http://biotechnologyfocus.ca/pharmedconference-puts-the-pieces-together-onoutsourcing/

Zymeworks enters into sixth major pharmaceutical partnership

Zymeworks Inc. a Vancouver-based clinical-stage biopharmaceutical company, announces that it has entered into its sixth major pharmaceutical partnership with Janssen Biotech Inc., one of the pharmaceutical companies of Johnson & Johnson.

In the terms of their agreement, Zymeworks will provide Janssen with a worldwide, royalty-bearing licence to research, develop and commercialize up to six

biospecific antibodies directed to Janssen therapeutics products using Zymeworks, Aymetric, and Efect platforms. Janssen’s responsibilities will include all research, development, and commercial activities. The company will receive an initial payment of US$50 million and possibly receive up to another US$282 million in development, and up to US$1.12 billion in commercial milestone payments, and tiered royalties on potential sales. Janssen also has the option

8 BIOTECHNOLOGY FOCUS December 2017/January 2018

to develop two additional bispecific programs under the agreement subject to a future option payment.

The different platforms serve diverse functions that work simultaneously together. The Azymetric platform enables the transformation of monospecific antibodies into bispecific antibodies, which gives them the ability to simultaneously bind two different targets. The bispecific technology enables the development of multifunctional biotherapeutics that can block multiple signaling pathways, recruit immune cells to tumours, enhance receptor clustering degradation, and increase tumour-specific targeting leading to greater efficacy while reducing toxicities and the potential for drug-resistance.

Meanwhile, the Efect platform is a library of antibody Fc modifications engineered to modulate the activity of the antibody-mediated immune response, which includes both the up and downregulation of effector functions. This platform is compatible with traditional monoclonal as well as Azymetric bispecific antibodies to further enable the customization of therapeutic responses for different diseases.

To see this story online visit http://biotechnologyfocus.ca/ zymeworks-enters-into-sixth-majorpharmaceutical-partnership/

BUSINESS corner

Zenabis signs largest deal of its kind

Microbix Biosystems announces the completion of its second tranche Microbix Biosystems Inc. announces that it has completed a second and final tranche on October 19, 2017, of the brokered private placement financing. The first tranche gross proceeds were $2.33 million and an accumulation of 7,784,500 issued units. Microbix has now closed the second tranche of private placement funding for a further $1.17 million, which totals 3,882,133 issued units at $0.30 per unit.

Each individual unit consists of one common share of Microbix, and one-half of one warrant to purchase one common share.

Each whole warrant accredits the holder to purchase one additional common share at a price of $0.36 for three years.

The proceeds of the last tranche will be used to upgrade some of the production facilities, such as additional bio-

It is becoming a year of firsts for Canada as the pending legalization of marijuana has opened up a mound of opportunity for small and medium-sized companies. Although it will not be legal to smoke anywhere you want and will soon be on the market, this contemporary law has opened avenues for companies like Zenabis, to seize opportunities for business expansion of pharmaceutical-grade marijuana.

Signing the largest deal of its kind, Zenabis and the government of New Brunswick announced a memorandum of understanding for the safe and secure supply of cannabis and cannabis-related products for the province’s recreational users. Under this agreement, Zenabis will provide four million grams of cannabis and derivatives to the province – retailed at roughly $40-50 million.

This deal will bring about 450 new jobs to the village of Atholville over the next two years, which is home to Zenabis’ 393,000 square foot state-of-the-art facility for the manufacturing and supply of pharmaceutical-grade cannabis.

In addition to the Athloville facility, Zenabis holds a second 30,000 square foot production license in Delta, B.C. and is in the late stages of securing a third license for a 280,000 square foot facility in Stellarton, Nova Scotia. This makes Zenabis one of the country’s largest, and the only coast-tocoast producer.

To see this story online visit http://biotechnologyfocus.ca/zenabissigns-largest-deal-of-its-kind/

reactor equipment, support the commercialization of quality assurance or proficiency control products and provide further working capital.

Microbix Biosystems Inc. is a publicly traded company that is listed on the Toronto Stock Exchange and headquartered in Mississauga, Ontario, Canada. The company specializes in the development of proprietary biological and technology solutions for human health and well-being and manufactures a wide range of critical biological materials for the global diagnostics industry.

To see this story online visit http://biotechnologyfocus.ca/microbixbiosystems-announces-the-completionof-its-second-tranche/

Canadian drug firm fined £34-M for overcharging U.K. health system Britain’s National Health Services (NHS) has slapped a £34 million ($57.5 million) fine to drug company Concordia International for allegedly overcharging the health provider by more than $169 million over a period of 10 years for the sale of a thyroid drug used by thousands of patients.

According to the United Kingdom’s Competition Markets Authority, Oakville, Ontbased specialist in generic and legacy pharmaceutical products jacked up the price of its liothyronine drug from £4.46 ($7.54) in 2007 to £258.19 ($436.59) in July this year

– that’s an increase of almost 6,000 per cent.

Liothyronine is a synthetic form of triiodothyronine (T3), a thyroid hormone used to treat underactive thyroid and myxedema coma.

The price hike caused NHS’s bill for the drug shoot to £34 million ($54.5 million) in 2016 from just about £600,000 ($1 million) in 2015, the CMA said.

The CMA began its price investigations in October 2016. The probe relates to three products including liothyronine tablets, according to Concordia. The CMA issued a statement of objection (SO) to Concordia and the former owners of the company’s international segment, Hg Capital and Cinven, in relation to the pricing of liothyronine in the U.K. from November 2007 and July 2017.

To see this story online visit https://biotechnologyfocus.ca/canadiandrug-firm-fined-34-m-for-overcharging-uk-health-system/

December 2017/January 2018 BIOTECHNOLOGY FOCUS 9

Best Practices

| By Nestor Arellano

Blockchain

and the future of outsourcing in biotech

Can blockchain technology help biotech firms improve their outsourcing process?

B

lockchain entered the public’s awareness when Bitcoins and other digital cryptocurrencies began hitting the headlines. As the underlying system that facilitated the transaction of digital funds, blockchain could not escape the notoriety attached to the idea of a clandestine exchange of cryptocurrency in the so-called Dark Web. However, it didn’t take long for banks and investment companies to realize the potential of blockchains in the financial industry. Pretty soon other top tech companies such as IBM, Amazon, and Microsoft have begun offering enterprise firms a way to incorporate blockchain networks into their businesses.

Can blockchain help biotech companies enhance their outsourcing process?

Definitely, says Bill Fearnley, research director for worldwide blockchain strategies at analyst firm IDC. Speaking at a recent blockchain conference sponsored by the Information Technology Association of Canada (ITACT) in Toronto, the IDC analyst noted that financial services, retail, manufacturing, and supply chain, government, and healthcare are among the verticals where blockchain technology can make its mark.

“The supply chain has embraced blockchain. The most obvious use is in track and trace,” according to Fearnley.

Track and trace is a big sell for blockchain.

For example, IBM’s Watson Internet of Things (IoT) platform now with blockchain integration. The blockchain’s distributed repli-

cation allows business partners to verify each transaction. This removes the need for central control and management. The blockchain records what each participant does and everyone is accountable for the overall transaction.

Blockchain allows digital information to be distributed but not copied. Think of it as a giant accounting ledger which resides on the Internet. This ledger is arranged in batches of data called blocks. The blocks use cryptographic validation to link to each other.

Each block references and identifies the previous block forming an unbroken chain.

This serves as a built-in validation that cannot be tampered with. Old transactions are retained forever in the blockchain. New transactions are added to the chain.

Data in any given block cannot be altered without affecting succeeding blocks. Changes cannot be made with the collusion of the network members.

One important bonus – the blockchain is distributed. It does not exist in one place, it exists in multiple computers of members of the particular blockchain network.

“A blockchain is an immutable record,” says Fearnley. “It provides security and permanence of data enabling the establishment of identity, the management of provenance of assets as well as date-stamping and geostamping events, and more.”

In the context of outsourcing, biotech companies can create a blockchain dedicated to monitoring and recording the activities associated with various service

10 BIOTECHNOLOGY FOCUS December 2017/January 2018

providers it needs to manufacture a product.

One of the advantages of a blockchain is that it enables the use of so-called smart contracts or self-executing contracts.

Rather than go to the process of hiring a lawyer to draw a contract to cover payment for services rendered, smart contracts can be configured to release a certain amount of funds to particular providers when they have completed a certain task.

Much like traditional contracts, smart contracts can be programmed to define rules and penalties around an agreement. One difference is that smart contracts can automatically enforce these rules and penalties.

Blockchain technology can also be used as an electronic system for processing marketing authorization submissions and updates to global regulatory authorities. Manufacturers can use it as blockchains as a digital ledger for managing required documentation and correspondence.

Clinical trial management is another area where blockchains can be of use. For instance, as more laboratories work with large molecules and compounds that originate from various places, an immutable record becomes indispensable for validating information associated to various stages of clinical trials especially when laboratories are located in different parts of the globe.

To see this story online visit www.biotechnologyfocus.ca/blockchainand-the-future-of-outsourcing-in-biotech/

outsourcing

| By Jeffrey Graham

The Importance of Strategic Outsourcing to Life Science Companies

One of the most important disciplines for an early-stage or emerging life science company is the ability to successfully execute strategies to outsource key functions within the organization to third parties.

I

t is well recognized that advances in genomics, combinatorial chemistry, highthroughput screening (HTS), among other things, have all contributed to an explosion in the number of new promising biological targets and lead molecules. However, early stage or emerging life science companies rarely have either the funding or the expertise to fully embrace the new technologies’ potential. Thus, companies often choose to outsource their research programs to specialized CROs or academic centers capable of providing a state-of-the-art expertise in certain areas.

December 2017/January 2018 BIOTECHNOLOGY FOCUS 11

outsourcing

In addition, to increase the success rate of drug discovery programs, life science companies are often seeking to accelerate every stage of early drug discovery process.

Starting from target identification and validation all the way towards a preclinical drug candidate. In many cases, it is less expensive and more efficient to outsource those challenges to external organizations than it is to create in-house infrastructure and hire the necessary research staff.

There are several principles of outsourcing that are often cited in the literature and applied in practice. Some of the most important principles are briefly summarized below.

First, it is key to select the right partner. It is important to ask questions about a partner’s background, track record and experience. A partner who lacks the expertise required to achieve the desired result or who fails to deliver on time can result in a costly operation.

The right partner should also have experience in the entire development process to foresee and prevent any issues from arising.

Part of the due diligence process should be a careful review of the experience of the partner with similar projects in the past.

Checking with current and past clients of the prospective partner is good business practice.

Second, companies that successfully outsource have a clear objective in mind that is understood by both the key internal parties who will be responsible for managing the relationship with the outsourced partner and the key representatives of the partner.

Third, in addition to the partner’s background, track record and experience, another key for success is that the culture of the company and its partner be compatible.

Alignment is key. Often this issue of cultural alignment will become apparent during the negotiation phase of the relationship. If the representatives of the prospective partner appear to make the process unduly difficult, this may be an indication that there is a reasonable prospect that post agreement, those responsible for delivering the project will also be difficult. Getting to a “yes” during a contract negotiation can sometimes be very

time consuming and complex. However, one expects that a prospective partner will be willing to make reasonable concessions to gain the mandate. If that is not apparent from the early stage of contractual negotiations, this fact can be an indication that the post contract relationship may be less cooperative than optimal.

Fourth, it is important that those within the company responsible for the outsourcing have the relevant experience to manage the partner effectively. Experience matters and either the company has someone who has the experience necessary to oversee the project successfully or it should consider hiring a project manager with the relevant skills. By making this investment, companies can shorten the learning curve, avoid costly mistakes and more quickly become effective partners.

Fifth, service-level commitments are extremely important and should be reviewed and improved over the life of the relationship with the partner. Ultimately, customer satisfaction depends on the effectiveness of the relationship between those in the company responsible for the oversight of the outsourcing relationship and the counterparts of the partner. The more effective the relationship, the more likely the success of the outsourcing.

Finally, it is important to recognize that outsourcing can also present serious risks to a company. For example, the intellectual property of company including business plans, trade secrets and other proprietary knowledge need to be carefully secured and outsourcing of key functions can potentially put at risk the company’s strategy to protect its intellectual property. A carefully negotiated agreement will ensure that improvements to existing inventions or new inventions that are directly related to the outsourced work are owned or controlled by the company.

In addition, cybersecurity has emerged as a critical issue in every sector of the economy.

A company considering the outsourcing of an important function or project must insist that a prospective partner have an informa-

12 BIOTECHNOLOGY FOCUS December 2017/January 2018

Getting to a “yes” during a contract negotiation can sometimes be very time consuming and complex.

tion security risk management strategy that complies with best practice.

All in all, the success of the life science industry, especially the impressive success of many early stage and emerging companies, is closely connected to the many positive outsourcing arrangements that have been undertaken. There is no reason to doubt that there will be any fewer successful outsourcing arrangements within the life science sector in the future.

Jeffrey Graham is a partner at Borden Ladner Gervais LLP, National Leader of the Life Science Practice To see this story online visit www.biotechnologyfocus.ca/theimportance-of-strategic-outsourcing-tolife-science-companies/

| By Robert Merson and Brian Bobechko

Outsourcing Landscape

for Therapeutics Development in Canada Special Report:

Rare is the therapeutics company that possesses all of the capabilities and expertise needed to bring a technology to market. More typically, particularly for the majority of small early-stage companies that are so prevalent in an innovation economy, the key to a successful therapeutics company (beyond having exceptional underlying technology) has become the ability to engage and manage the best partners to advance the technology through the pre-clinical, clinical, manufacturing and regulatory stages of development.

Canadian therapeutics companies have the benefit of world-class options in both the public and private sectors. This report highlights some of those options, as part of an overview of the current landscape for outsourcing therapeutics development in Canada.

A typical therapeutics company – Is there such a thing?

The landscape of Canadian therapeutics companies spans the full spectrum from small start-ups to multi-national biopharmaceuticals. Industry Canada figures from 2016 estimate that there are 163 Canadian biopharmaceutical small and medium-sized enterprises (SMEs) with over 400 promising human health products under development.1 Within this group, 75% of products are in the early stages of development (i.e. research through phase I/II).

According to the Canadian Life Science Database (accessed October 2017), of the 837 catalogued Canadian biotech companies, almost 15% (~125) are focused on therapeutics, with the majority (60%) at the research and early preclinical stages and progressively smaller percentages through the clinical stages of development and post-market surveillance.2 Not surprisingly, the mosaic of companies involved in developing human therapeutics reflects many disease areas (cancer and CNS being the most prevalent) and a variety of technological specializations (e.g. small molecules, biopharmaceuticals, virus based therapeutics, and cellular therapeutics).

As research activities continue to define novel disease pathways, new chemical entities and libraries of existing compounds are still a primary source for screening prospective therapeutic candidates against newly discovered target sites. Historically, this has required expertise in small molecule and medicinal chemistry, and small molecules remain the dominant category of therapeutics, comprising as much as 90% of the existing pharmaceutical market.3 Small molecules continue to underpin the therapeutics discovery pipeline, in part due to their long history in the pharmaceutical industry, and well understood manufacturing and routes of administration. Of the 22 new molecular entities approved in 2016, 50% were small molecules.4 However, medicinal therapeutics represents a range of dramatically different molecular sizes, characteristics and related complexity to discover, manufacture, and test.

Since the biotechnology revolution opened the door to manipulating and harnessing the power of biological components, the number of biologics among approved new molecular entities has been growing steadily and may soon overtake the small molecules among new molecular entities. Representing 50% of the 2016 roster of FDA approved new molecular entities,5 biologics (which include oligonucleotides, peptides, and antibodies) were recently December 2017/January 2018 BIOTECHNOLOGY FOCUS 13

Special Report:

Outsourcing Landscape for Therapeutics Development in Canada

estimated to represent 30% of therapeutic candidates now in development in Canada.6 The popularity of biologics stems in part from the breadth of opportunity available to modulate biological pathways of interest, and the precision offered by more complex molecules. Depending on the nature of the treatment, these therapeutics can harness the patient’s own immune system, or cellular machinery to bring a more curative approach to the target disease. Excitement around the prospect of personalized medicine, where treatments are tailored to the patient, has also boosted interest in biologics. For similar reasons, stem cell and regenerative medicine technologies are also a growing trend for novel therapeutics development with increasing research investment in these areas over the past few years. However, the expertise required to develop these new classes of therapeutics is becoming progressively complex, even branching into different subsectors of therapeutic development. Developing commercial grade tools and processes in these technologies can be prohibitively costly for would be service providers, and represents a barrier to entry for would-be therapeutic and contract research organization (CRO) entrants alike. Yet, access to publicly developed tools and expertise may represent a significant enabling factor underpinning the strength of a life-science economy.

It usually starts with a discovery In Canada, most therapeutic candidates (or underlying technologies) originate from publicly funded research labs. Canada’s 150+ universities, colleges, teaching hospitals, research institutes and government agencies control more than 40% of Canada’s $31 billion gross domestic expenditures on research and development, and 74% of federal expenditures on science and technology.7 While health research investments are only a fraction of this amount, about $3.9 billion in 2015,8 Canada remains highly reliant on public funding for research that generates the novel discoveries with therapeutic potential. However, compared to the availability of public funding for discovery research, the availability of public funding for protecting and preparing technologies for clinical testing is relatively scarce. While research institutions are increasingly holding onto emerging technologies later into the pre-clinical discovery process in an attempt to increase licensing returns, therapeutics companies are often born out of a need for private capital. This need for capital to transition technologies through the so called “valley-of-death” (referring to stages of technology development where funding is particularly hard to find) explains, in part, the

relative abundance of small, resource-poor, early stage therapeutics companies.

Beyond the commonly shared key ingredients of 1) intellectual property (great ideas for new products with market potential) and 2) entrepreneurial talent, there is a true mosaic of therapeutic companies in the Canadian landscape, in terms of size, scale, technology, and therapeutic focus. Given the early stages of development for the majority of these companies, it is not surprising to find many of them clustered around major academic centres, where they are more likely to have access to space that is specially equipped for research.

Most early stage therapeutics companies are located either in dedicated incubation facilities in regional research clusters or in seconded academic space that has been made available for companies to lease. Mississauga’s lifescience cluster, for example, is the 2nd largest in Canada, and hosts some 430+ life-science companies, credited in part to close proximity to 21 universities and colleges and their 300+ life science-related programs.9 While there are some examples of well financed Canadian companies that have built out larger internal research teams, the majority of Canadian therapeutic companies have less than 10 full-time employees and would cite financing as their number one challenge. Successful management teams are those that are skilled at raising funds and collaborative partnering, since, for these typical small resource starved companies, outsourcing development activities has become a necessity for advancing technologies to the next phase of development, and financing usually requires success in reaching milestones.

Smart money doesn’t try to do everything alone Given the breadth and diversity of therapeutics companies, a prevailing theme might be that no company does everything. Certainly, for SMEs, the business model for therapeutics companies has become one that relies on outsourcing. Even large multinational therapeutics companies choose to outsource capabilities that are either lacking in-house or specialized in nature, or simply to reduce time to market and allow the company to focus on core competencies. According to a survey conducted by www.outsourcing-pharma. com, most pharma companies use CROs for manufacturing, clinical trials, packaging, and to a lesser degree for preclinical research.10 Particularly in the area of immunobiologics, many developers prefer to outsource for expertise in reducing antibody immunogenicity (humanization) and enhancing its affinity (affinity maturation). A 2016 report suggested that there are close to 60 companies globally

14 BIOTECHNOLOGY FOCUS December 2017/January 2018

offering antibody humanization and/or affinity maturation services or platforms, 56% of these based in North America.11 The example of immunobiologics is only one, albeit significant, area of biologics CRO expansion. Overall growth in the North American CRO market has been forecast at >10% through 2020, contributing to an estimated $57 billion global market, and underscoring CRO activity as an economic driver in its own right, as well as being an essential ingredient in the life-sciences ecosystem.

Government’s role in catalyzing the commercialization of therapeutics When considering the landscape for outsourcing therapeutics development, government initiatives may not come top of mind, but in its drive to stimulate innovation driven economic growth, government supported initiatives have become a major provider of outsourcing services in the therapeutics industry in Canada.

In one sense, publicly funded CRO-like activity could be considered the public-sector response to the “valley of death”; an attempt to help companies advance their technologies in the absence of commercially oriented funding. Many early-stage therapeutics companies in Canada today have credited their success (at least in part) to government-initiated programs. In addition to the critical public funding programs that support early-stage researchbased companies, (such as SR&ED credits, IRAP, industry development grants through federal granting councils and provincial agencies), there has also been a considerable public investment in providing technological support for early-stage companies. The two most notable publicly supported “outsourcing” partners for Canadian therapeutics companies have been the National Research Council (NRC) and the Networks of Centres of Excellence (NCE) initiatives; particularly the Centres of Excellence for Commercialization of Research (CECR) program.

The NRC, most often recognized for the IRAP program, has also been strategically focused on supporting the development of Canada’s biotherapeutics industry through its Human Health Therapeutics (HHT) portfolio. In addition to their own internal discovery programs, which generate novel technologies for licensing to the private sector, the NRC has also focused on building a partnership model that makes their resources and expertise available to help Canadian therapeutic companies overcome technological challenges related to discovery, validation, and pilot manufacturing. The NRC’s HHT portfolio specializes in biologics and biomanufacturing; therapeutics beyond brain barriers; and vaccines and immunotherapeutics.

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Outsourcing Landscape for Therapeutics Development in Canada

Their expertise extends from basic research through preclinical development. A full description of NRC’s role in Canada’s biotech ecosystem has been described in a previous article from Biotechnology Focus.12 The CECR program has also been an important partner for early stage therapeutic companies. Often early stage therapeutics companies are launched through these CECR’s (in partnership with academic organizations) or they may be incubated at an early stage

with access to seed funding, research space, technological expertise, and business mentorship. Given that their role has been to help academic institutions commercialize their research, as well as to support companies in the commercial development of their technologies, CECR’s have emerged as a critical outsourcing partner for early-stage therapeutics development, since the creation of the program a decade ago. There are several active CECR’s that currently support Canadian

therapeutics companies, many of which have been highlighted in Table 1.

The more traditional research Network Centres of Excellence (such as BioCanRx and GlycoNet) are also important to mention, along with the business-led NCE’s such as CQDM, as these organizations have also focused on incubating innovative Canadian therapeutics companies, financing of strategic and collaborative research projects, and providing “outsourced” technical service capabilities.

Table 1: Examples of CECR’s Supporting Canadian Therapeutics Commercialization and Development CECR

Brief Description

Public Funding

Partner Funding*

Accel-Rx Health Sciences Accelerator

Leverages expertise and infrastructure of existing health related CECR’s and invests in the development of Canadian health companies.

$14.5 M

$2.8 M

Centre for Commercialization of Cancer Immunotherapy - C3i

Accelerate access to innovative cancer immunotherapies for patients.

$15 M

Centre for Commercialization of Regenerative Medicine - CCRM

Bridging the gap between academia and industry to enable promising regenerative medicine technologies to reach the market.

$15 M

$16 M

Centre for Drug Research and Development - CDRD

Technology incubator for creating spin-off companies and accelerator that supports scale-up companies in moving discoveries through pre-clinical stages.

$23 M

$85.9 M

Centre for Probe Development and Commercialization - CPDC

Provides the expertise and infrastructure needed to develop and manufacture molecular imaging probes, including radiopharmaceuticals.

$28.8 M

$39 M

Centre for the Commercialization of Antibodies and Biologics - CCAB

Commercializing antibodies from the Toronto Recombinant Antibody Centre (TRAC), Canada’s leading centre for the production of high-quality antibody and biological assets.

$15 M

$994 K

MaRS Innovation - MI

Commercializing IP from 15 member institutions, including therapeutics IP.

$29.9 M

$56.1 M

NEOMED Institute - NEOMED

Two integrated R&D facilities: one specializing in small molecule therapeutics, and one specializing in biologics and vaccines.

$12 M

$17.6 M

Prostate Centre’s Translational Research Initiative for Accelerated Discovery and Development - PC-TRiADD

Leveraging the scientific excellence, platform technologies and specialized facilities of the Vancouver Prostate Centre, it provides discovery, preclinical development and clinical research management for stage cancer progression and therapeutic resistance.

$26.3 M

$11.3 M

*Longer established centres may have more partner investment reported than newer ones.

Source: www.nce-rce.gc.ca December 2017/January 2018 BIOTECHNOLOGY FOCUS 15

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Outsourcing Landscape for Therapeutics Development in Canada

Outsourcing to the private sector – how is Canada fairing as a commercial outsourcing partner?

The scale of government investment in stimulating economic activity through financial mechanisms and technical service capacity suggests that the government has recognized the critical role of outsourcing to early commercial development in the therapeutics sector. It also begs the questions: what is the health of Canadian private sector CRO’s; how are Canadian CRO operations faring alongside international competitors; and how do government programs overlap with private sector activities in relation to outsourced therapeutic R&D?

The Canadian preclinical CRO landscape The NRC’s article on “Outsourcing and Tech Transfer in Canada’s Biotech Ecosystem” from the December 2016 / January 2017 edition of Biotechnology Focus,13 provides an excellent and recent summary of the private sector preclinical CRO landscape in Canada, including the types of services and an analysis of Canada’s three main clusters in Ontario, Quebec, and British Columbia. Their findings included identifying: 117 private sector CRO’s offering preclinical biologics services; at least 75 supporting discovery activities (hit and/or lead identification); more than 99 offering preclinical services (pharmacology, toxicology, PK/PD); and at least 68 providing chemistry, manufacturing and control (CMC) analytics in preparation for GMP biomanufacturing and clinical trials.

This data suggests a strong preclinical CRO sector in Canada, particularly given the number of pre-clinical stage Canadian therapeutics companies, and suggests a significant international component and strong competitiveness. Based on consultations and secondary research, there are several trends to highlight.

First, with numerous competitors in the marketplace, preclinical CRO’s compete primarily on cost-competitiveness and specialization.

While some of the larger or more established CRO’s can demand somewhat higher rates based on an established track record, the majority of CRO’s promote their unique areas of specialization. This may include disease area expertise; previous experience with specific models; expertise with specialized equipment or technologies; or novel techniques that provide high quality, reproducible results in a more efficient manner. However, while areas of specialization are becoming an important factor in a CRO’s unique selling proposition, the persistent theme is that a track record of previous experience is still critical, with thera-

The two most notable publicly supported “outsourcing” partners for Canadian therapeutics companies have been the National Research Council (NRC) and the Networks of Centres of Excellence (NCE) initiatives. peutics companies typically seeking CRO’s with a minimum 5-year history to be considered for outsourcing.

Another theme might be that public institutions (universities, research hospitals, publicly funded research centres, etc.) may also be playing a role in bolstering the business models of preclinical CRO’s. From one perspective, the public institutions have become clients for preclinical CRO’s, with opportunities to provide external validation on research findings or to provide external capacity for priority projects that may have been funded by grants or even private contributions. The Ontario Brain Institute for example has a program that will support Canadian neurotherapeutics companies seeking to engage the services of an Ontario-based CRO. On the other hand, preclinical CRO’s also consider public institutions to be competitors in the marketplace.

With increased capacity for preclinical research at many public institutions (e.g. institutional infrastructure grants, NRC, CECR programs), therapeutic candidates are undergoing much of their preclinical development activities within the public domain. The challenge remains for preclinical CRO’s to define the expertise and cost effectiveness of their services to help shift preclinical development from the public subsidized institutions to the private market.

Lastly, and most importantly, Canada’s corporate CRO’s recognize that preclinical development is a global business. Our CRO’s are in no way limited to servicing the Canadian marketplace, and are actively engaging with global industry. Big pharma are important clients for preclinical CRO’s, many of which are seeking out specific areas of expertise or unique models that have been validated. A 2016 survey

by Nice Insights showed that big pharma and mid-sized pharma/biotech companies together make up 80% of the pre-clinical CRO’s buyers market, and that 61% of the therapeutics companies surveyed choose North American CRO’s as their preferred outsourcing partner.14 Global engagement however, also means global competitors, which reinforces the need for specialization and cost competitiveness for Canadian-based preclinical CRO’s. The Canadian therapeutics landscape is even attracting some of the leading CRO’s to Canada, such as German-headquartered Evotec (voted one of the top global CRO’s in the Nice Insights survey), which recently announced a partner-

16 BIOTECHNOLOGY FOCUS December 2017/January 2018

ship with MaRS Innovation to establish LAB150 (named in commemoration of Canada’s 150th birthday), to accelerate drug discovery and commercialization from Canadian institutions.15

Contract manufacturing – an opportunity for Canada to secure a position of global leadership?

Contract Manufacturing Organizations (CMO’s) as well as organizations involved with developing the manufacturing process (CDMO’s) are important partners at the preclinical stage, and will often remain partners for the therapeutics companies through the clinical and post-market stages. The time and investment required for therapeutics companies to achieve a certified and regulatory approved manufacturing process is significant enough that once successful, it is highly unlikely that the company will seek to switch manufacturers.

This is especially true for the newer biologics and cellular therapies, which would require considerable cost to certify and validate a new site for manufacturing. Therefore, even though therapeutics companies may, as a function of their growth, attract foreign investment or ultimately be acquired and moved outside of Canada, it is unlikely that the manufacturing of the therapeutic candidate will be moved if they already have a successful partner in Canada.

This strategy of building manufacturing capacity in Canada is one that has been championed by others in the industry for many years. The NRC-HHT portfolio (previously described) is one partner that has been working with Canadian therapeutics companies to help develop the manufacturing process for their lead candidates. Their cell culture pilot plant in Montreal, with a run capacity up to 500L, is used to support therapeutics companies in the development of their biologics manufacturing process. CECR’s have also been playing a role in building manufacturing capacity. CCRM has established a 40,000 sqft cell manufacturing facility in Toronto to help companies develop and scale-up the manufacturing process for novel stem cell therapies. The goal of these public initiatives has not been to operate as a full-time CMO, but rather to help companies develop their manufacturing processes so that they can ultimately be spun-out, or handed off to a Canadian commercial CMO partner. The individual therapeutics company therefore

Special Report:

Outsourcing Landscape for Therapeutics Development in Canada

has become less of a focus for ensuring the sustainability of the sector; but rather the development and retention of the manufacturing of new therapeutics in Canada has become the new strategy for retaining and building high value jobs.

Canadian commercial CMO’s have also been developing capacity as a CDMO helping companies to develop the process for manufacturing, before scaling up manufacturing with the company’s growth. Examples include: Dalton Pharma Services (small molecules) and Therapure (biologics) who not only provide contract manufacturing services, but are also providing expertise in the development of the manufacturing process. As with the preclinical CRO’s, Canadian CMO’s recognize that contract manufacturing is a global industry, and are actively engaging global partners, with the majority of their clients coming from outside of Canada. The recent announcement of the $290M spin-off and sale of Therapure’s CDMO business is a testament to the company’s growing influence and competitiveness in the global market.

Outsourcing clinical stage development in Canada Once therapeutic candidates have been approved for clinical development, a whole new set of outsourcing partners are needed. Clinical Trials Organizations (CTO’s) or clinical CRO’s represent a variety of public and private sector organizations.

Canada’s exceptionally robust clinical trial sector is a reflection of significant government investment in clinical research, coupled with the intrinsic benefits of a publicly funded health system and integrated network of academic institutions and research centres.

According to public figures, Canada captures as much as 4% of clinical trials globally, and has attracted significant large-pharma clinical

research investments and participation in the clinical trial landscape.16 The Canadian Clinical Trials Coordinating Centre initiative is one example of how government, industry, and health care institutions have recently come together to strengthening clinical trials for Canadians, including through the creation of a clinical trials asset map (accessible at cctam. ca) and by working to improve the speed, cost and efficiency of trials in Canada, for the benefit of all stakeholders.

At the same time, there are many private sector CTO’s in Canada that specialize in providing clinical studies, including supporting our own Canadian-based (primarily early phase) therapeutics companies, and the coordination of larger studies (primarily for big pharma) outside of major academic centres. According to the Canadian Association for Independent Clinical Research, more than 60% of all clinical research that is conducted in Canada is conducted at independent research centres.17 Many of these CTO’s offer support for trials ranging from Phase I-IV, often with disease specialization. For start-up therapeutics organizations, the services of these CTOs in recruitment of smaller cohorts of healthy subjects to test for safety and basic pharmacokinetics are critical and help ensure efficient, cost effective testing of their early clinical candidates.

These CTO’s also provide services such as clinical trials design; data management; statistics, quality assurance; medical writing; and project management. Examples of private Canadian CTO’s include: BioPharma Services, Canadian Centre for Clinical Trials, Everest Clinical Research, Inflamax Research, Lambda Therapeutic Research, Scimega Research, JSS Medical Research, and Syreon.

Public institutions also play a leading role in engaging clinical trials, both at the early phases for specialty disease populations (e.g. cancer, neuro, and others requiring specialized clinical expertise) and for larger later stage trials through the coordination of multiple Canadian centres. The challenge that global therapeutics companies have faced in the past has been the limited points of access or established standards for engaging multiple centres at one time. This challenge has lead to the creation of many public supported initiatives to address these issues and ensure that Canadian centres are more actively engaged in clinical testing of novel therapeutics.

Examples of publicly funded initiatives are highlighted in Table 2. For a more detailed list of clinical trial resources in Canada, the Canadian Clinical Trials Asset Map is an excellent resource.18

Let’s not forget about regulatory outsourcing Many of the CRO’s, CMO’s, and CTO’s already have regulatory expertise as a service offering to help navigate the regulatory requirements and submissions. Therefore, outsourcing of regulatory management is most often already included as an additional service offering with the private sector partners, while the public initiatives also recognize the importance of the regulatory process and help to facilitate workshops and networking events to showcase this expertise. There are also a wide variety of independent regulatory consultants who specialize in the development and management of the required submissions to Canadian (and other jurisdictional) regulatory agencies.

Much like the other outsourcing organizations profiled, regulatory consultants are also working in a global market, not only supporting Canadian therapeutics companies, but also foreign companies seeking specific regional expertise to introduce their products to the Canadian market.

Market outlook on Canadian outsourcing – Competing through technology To compete in the global market, Canadian outsourcing partners (CRO’s, CMO’s CTO’s, etc.) will need to evolve and advance alongside the technological innovations sought by their clients. Specializing in niche areas - for example the administration of orphan drug trials, rare diseases, or providing integrated regulatory submission services, may represent an increasingly important strategy.19, 20 We can anticipate that biologics, which has a growing market share of new therapeutics, will continue to grow, particularly as biosimilars find their place in the market, as well as emerging technologies based on stem cells and regenerative medicine research. In 2016 personalized medicines accounted for more than 20 percent of the new molecular entities (NMEs) approved by the U.S. Food and Drug Administration (FDA) for the third year in a row, and some reports suggest that up to 40% of all drugs in development are personalized medicines.21 The discovery of new personalized biologic therapeutic products and strategies seems likely to accelerate given the blockbuster success of monoclonal antibodies like Humira® ($16 billion dollars in revenue in 2016) and given the onset of the next generation of biologics involving stem cell and regenerative technologies, which are already progressing rapidly through clinical testing. As an example, the Stem Cell Network alone has launched 12 trials to date, and OIRM currently reports 9 active trials, spanning from phase IIII, with 4 trials launching imminently.22

December 2017/January 2018 BIOTECHNOLOGY FOCUS 17

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Outsourcing Landscape for Therapeutics Development in Canada

Table 2: Examples of Publicly Funded Clinical Trial Organizations Supporting the Clinical Phase Development of Therapeutics in Canada Clinical Trial Network Organizations*

Key Partners

Brief Description

Population Health Research Institute

McMaster University; Hamilton Health Sciences

Global leader in large clinical trials and population studies. Specialty areas include cardiovascular disease and diabetes. Leverages global network of partners in 92 countries. Has recruited almost 1,000,000 patients into trials to date.

Applied Health Research Centre

St. Michael’s Hospital; Li Ka Shing Knowledge Institute; University of Toronto

Not-for-profit academic research organization that provides services to clinical studies (e.g. design; protocol development; data collection, coding, analysis; IT support; quality assurance; health economics). Currently has 70 staff managing 150 studies.

JDRF Canadian Clinical Trials Network

Network of Academic Centres; FedDev Investment; Juvenile Diabetes Research Foundation

Runs multi-site clinical trials aimed at curing, treating and preventing Type 1 Diabetes. In first 7 years, network funded 12 peer-reviewed leading-edge trials.

Network of Networks (N2)

Universities, hospitals, and private sector partners from across Canada

An alliance of Canadian research networks and organizations working to enhance national clinical research capability and capacity. Develops and manages shared resources such as SOP’s; training; registries; and references.

Canadian Cancer Clinical Trials Network (3CTN)

N2; Canadian Cancer Trials Group; various cancer funding agencies

Supports cancer trials at networked cancer centres across Canada, improving patient access and efficiency.

CIHR Canadian HIV Trials Network (CTN)

Providence Health Care; University of British Columbia

Established in 1990, has facilitated HIV trials with industry partners and academic sites across Canada. Has implemented over 170 trials with 10,000 participants engaged.

Clinical Trials Ontario (CTO)

Ontario Government; Ontario hospitals; research universities; and industry organizations

Works with the Ontario clinical trials community to improve the environment for trials attract clinical trial investment to the province. Focused on streamlining the ethics review system across multiple clinical sites.

Princess Margaret Cancer Centre – Drug Development Program

PMCC; US-NCI; other Ontario cancer centres in London and Hamilton

Focuses on Phase I and II oncology trials. Through a consortium of Ontario hospitals, it acts as the Canadian site for NCI trials. Since its inception in 2001, it has seen more than 1,200 patients enrolled in 60 trials.

Canadian Cancer Trials Group (CCTG)

Queen’s University

Network of 80 member sites across Canada and partners in over 40 countries. Specializes in phase I to III cancer trials.

Q-CROC

Network of Quebec-based cancer centres

Centralized coordinating network for cancer research trials in Quebec, facilitating standards and single point access to the cancer population in Quebec.

*Not a comprehensive list. Examples only of publicly funded clinical trial organizations in Canada.

Source: Compiled by author from public sources.

18 BIOTECHNOLOGY FOCUS December 2017/January 2018

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Outsourcing Landscape for Therapeutics Development in Canada

To compete in the global market, Canadian outsourcing partners will need to evolve and advance alongside the technological innovations sought by their clients.

The use of technology, including digital hardware and software, may also soon become a disrupting force in the market. Internationally, a number of clinical CRO’s have invested in mobile technology to improve clinical trial data collection. Janssen provides a recent example of how companies are investing in mobile technology to track patient engagement on questions like compliance,23 or even to assist with matching patients to trials.24 Increasingly, technological competence may even become mandated, as exemplified by recent changes in the ICH e6(R2) amendments, endorsed by Health Canada, and which some experts are calling the biggest change in CRO clinical trial management for years to come.25, 26 In Canada, Deep Genomics plans to use AI technology for lead compound discovery and development,27 while internationally, companies like BenevolentAI are already using artificial intelligence to mine and analyze biomedical information, including on clinical trials, to identify opportunities to re-profile failed therapeutics in other disease areas.28 Datavant is an example of a company that threatens to disrupt the clinical CRO market through the application of AI technology to improving clinical trials.29

Concluding thoughts Outsourcing partnerships have been part of the winning formula for Canada’s success in building a vibrant therapeutics sector.

Despite a relatively small domestic market for therapeutics, a very Canadian mixture of public-private activity has enabled the technological advancement of Canadian-based outsourcing partners. There is clearly strength in the Canadian therapeutics landscape from both the outsourcing of development activities to advance Canadian therapeutic companies; and the attraction of global investment for outsourcing the development, manufacturing and clinical trials of additional therapeutics candidates in Canada.

The nature of the innovation economy however, demands on-going technological advancement and competitiveness. In the context of technology driving new opportunities, it seems that continued collaboration between publicly funded initiatives and private outsourcing service providers will continue to be important for enabling the rapid technological adoption of commercially available service offerings. For example, as of October 2017, the short-listed candidates for the Innovation Superclusters program did not specifically

include an opportunity for therapeutics development (except for precision health and manufacturing as a component of the digital technology cluster). However, there remains an opportunity to expand the short-listed manufacturing and perhaps even the artificial intelligence supercluster proposals to include a component for enhancing the Canadian therapeutics landscape.

It will be important that Canada’s public and private sectors continue their tradition of codevelopment, including cross-fertilization from other high-tech sectors, in order to ensure continued growth in the Canadian life-sciences sector. We must ensure that investments in public initiatives, continue to drive the growth of Canadian companies and attract additional global investment for therapeutics development in Canada.

15.

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References: 1. https://www.ic.gc.ca/eic/site/lsg-pdsv. nsf/eng/h_hn01728.html 2. http://www.canadianlifesciences.com/ca/ portal/stats_biotech.php accessed October 2017 3. h t t p : / / w w w. x c o n o m y. c o m / b o s ton/2015/11/23/small-molecules-thesilent-majority-of-pharmaceutical-pipelines/ 4. https://cen.acs.org/content/dam/ cen/95/5/09505-cover.pdf 5. ibid 6. https://www.fraserinstitute.org/sites/ default/files/biologics-revolution-in-theproduction-of-drugs.pdf 7. http://www.statcan.gc.ca/pub/88221-x/2015001/part-partie1-eng.htm 8. https://www.statista.com/statistics/436571/total-health-research-spending-canada/ 9. http://winthehumanrace.ca/wp-content/ uploads/2017/01/LifeSciences-Profile.pdf 10. http://www.outsourcing-pharma.com/ Library/Survey-Report-State-of-the-Global-Pharmaceutical-Contract-ServicesIndustry-2017 11. h t t p s : / / w w w. r e p o r t l i n k e r. c o m / p05102983/Antibody-Humanization-andAffinity-Maturation-Services-and-Platforms-.html 12. Outsourcing and tech transfer in Canada’s biotech ecosystem; L. LeSauter et al.; Biotechnology Focus; December 2016 / January 2017, pg. 21-22 13. ibid 14. http://www.americanpharmaceuticalre-

24.

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26.

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28.

29.

view.com/Featured-Articles/183037-Another-Exciting-Year-for-Clinical-ResearchOutsourcing/ https://globenewswire.com/news-release/2017/09/14/1121065/0/en/MARSINNOVATION-AND-EVOTEC-AG-ESTABLISHACADEMIC-BRIDGE-LAB150-IN-TORONTO. html https://www.ic.gc.ca/eic/site/lsg-pdsv. nsf/eng/h_hn01774.html http://www.caicr-acrci.net/about-us.html http://www.cctam.ca/ http://www.fiercebiotech.com/cro/ergomed-pays-eu5-7m-for-orphan-drug-cro http://www.fiercebiotech.com/cro/ evotec-to-fill-pre-ind-service-gap-300maptuit-buy http://www.personalizedmedicinecoalition.org/News/Press_Releases/ PMC_Analysis_Personalized_Medicines_ Top_20_Percent_of_FDA_Approvals_For_ Third_Straight_Year http://oirm.ca/oirm-research/clinicaltrials-initiative http://www.fiercebiotech.com/cro/ janssen-rolls-out-trial-supply-and-patientengagement-mobile-app http://www.fiercebiotech.com/cro/clinical-trial-matching-platform-raises-11mbacked-by-merck-s-tech-fund http://www.fiercebiotech.com/cro/ddf2017-choosing-a-cro-and-implicationsnew-r2-regulations http://www.hc-sc.gc.ca/dhp-mps/prodpharma/applic-demande/guide-ld/ich/ efficac/e6r2-step4-eng.php https://www.deepgenomics.com/ http://www.wired.co.uk/article/benevolent-ai-london-unicorn-pharma-startup http://www.fiercebiotech.com/biotech/ silicon-valley-vet-to-run-new-roivant-trialai-company

Robert Merson is a Certified Management Consultant and entrepreneur in the life sciences sector. He has worked both with public sector organizations that commercialize novel therapeutics technologies, and with private sector companies that provide contract research / development services for therapeutic companies.

Brian Bobechko is an independent consultant specializing in the commercialization of life-science technology arising from academic and publicly funded organizations, and advises inventors and entrepreneurs on start-up business ventures.

To see this story online visit www.biotechnologyfocus.ca/outsourcinglandscape-for-the-therapeuticsdevelopment-in-canada/

December 2017/January 2018 BIOTECHNOLOGY FOCUS 19

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Outsourcing Guide

Outsourcing Company Guide

Acanthus Research Inc.

2395 Speakman Drive Suite 2111, Mississauga, ON, L5K 1B3, CANADA (647)478-1021 inquiries@acanthusresearch.com www.acanthusresearch.com

Acclaim Pharma Research

645 Windermere Road, London, Ontario, N5X 2P1, CANADA (519)657-4222 www.acclaimpharma.com

Accucaps

720 Wright Street, Strathroy, Ontario, N7G 3H8, CANADA (519)245-8880

Activation Laboratories Ltd. (Actlabs)

41 Bittern Street, Ancaster, Ontario, L9G 4V5, CANADA 1(905)648-9611 SLachmansing@actlabs.com www.actlabs.com

Advanced Chemistry Development Inc. (ACD/Labs)

8 King Street East Suite 907, Toronto, Ontario, M5C 1B5, CANADA 1-800-304-3988 info@acdlabs.com www.acdlabs.com

Algorithme Pharma, an Altasciences Company

575 Armand-Frappier Blvd.

Laval, Quebec, H7V 4B3, CANADA (450)973-6077 contact@algopharm.com www.algopharm.com

Alphora Research Inc.

2395 Speakman Drive Suite 2001, Mississauga, Ontario, L5K 1B3, CANADA (905)403-0477 matthew.frizzle@alphoraresearch.com www.alphoraresearch.com

www.betagenexresearch.com

Altasciences Clinical Research 575 Armand-Frappier Blvd.

Laval, Quebec, H7V 4B3, CANADA (450)973-6077 contact@altasciences.com www.altasciences.com

Bio Pharma Services Inc.

Apex Graphics Inc.

320 Ambassador Drive, Mississauga, Ontario, L5T 2J3, CANADA (866)431-2739 mark@apexgraphics.com www.apexgraphics.com

Apotex Fermentation Inc.

50 Scurfield Blvd.

Winnipeg, Manitoba, R3Y 1G4, CANADA (204)989-6830 services@apoferm.com www.apoferm.com

Arthur Press Ltd.

162 Norfinch Dr. Toronto, Ontario, M3N 1X6, CANADA (416)663-6001 info@arthurpress.com www.arthurpress.com

Bio-Processing Alliance Inc.

1020 Kennedy Circle PO Box 30039, Milton, Ontario, L9T 0L8, CANADA (289)878-5969 info@bioprocessingalliance.com www.bioprocessingalliance.com

BioVectra Inc.

11 Aviation Avenue, Charlottetown, PEI, C1E 0A1, CANADA (902)566-9116 info@biovectra.com www.biovectra.com

Canadian Centre for Clinical Trials

Atlantic Life Sciences Inc.

2110 Decarie Blvd. Suite 102, Montreal, Quebec, H4A 3J3, CANADA (514)750-6017 www.alsclinic.com

Attix Pharmaceuticals

481 University Avenue Suite 502, Toronto, Ontario, M5G 2E9, CANADA (416)594-1881 sales@attixpharmaceuticals.com attixpharmaceuticals.com

8054 Yonge Street Suite 205, Thornhill, Ontario, L4J 1W3, CANADA (289)597-0106 info@clinicaltrialscanada.com clinicaltrialscanada.com

Canadian Custom Packaging & The Color Group

333 Rimrock Road, Toronto, Ontario, M3J 3J9, CANADA (416)638-1111 ccp@cdncustompackaging.com www.cdncustompackaging.com

CanAm Bioresearch

9-1250 Waverly Street, Winnipeg, Manitoba, R3T 6C6, CANADA (204)488-1886 info@canambioresearch.com www.canambioresearch.com

Bellwyck Packaging Solutions 1 Rimini Mews, Mississauga, Ontario, L5N 4K1, CANADA (905)363-2100 rsell@bellwyck.com www.bellwyck.com

Betagenex Research

4000 Weston Road, Toronto, Ontario, M9L 3A2, CANADA (416)747-8484 info@biopharmaservices.ca www.biopharmaservices.ca

Caprion Proteomics Inc.

Techopôle Angus 2901 Rachel Est, Montreal, Quebec, H1W 4A4, CANADA (514)451-5291

201 President-Kennedy Ave. 3rd Fl. Ste. PK-3900, Montreal, Quebec, H2X 3Y7, CANADA (514)360-3600 info@caprion.com www.caprion.com

December 2017/January 2018 BIOTECHNOLOGY FOCUS 21

Outsourcing Guide CBNE INRS

531 boul. des Prairies, Laval, Quebec, H7V 1B7, CANADA (450) 687 5010x4396 mario.filion@iaf.inrs.ca www.cnbe.inrs.ca CNBE is a state-of-the art laboratory animal facility specialized in non-GLP exploratory studies in toxicity, DMPK and drug-efficacy/proof-of-concept (oncology, vaccine, infectious diseases, liver disease, endotoxemia, inflammation, acute and delayed emesis models, biomarker identification). CNBE offers also the possibility of developing new animal models in partnership with you to precisely meet your needs. CNBE has 22 years expertise with multiple species (rodents, farm animals, ferrets, dogs and NHP). We have 78 multifunctional rooms and the capability to run BSL-2 studies. We offer also vivarium leasing for your own studies. We can also provide you blood, sera, plasma or tissues from numerous species.

velopment facility used to both evaluate and advance technologies. CCRM aims to accelerate the translation of scientific discovery into new companies and marketable products for patients. CCRM is the commercialization partner of OIRM and University of Toronto’s Medicine by Design.

Charles River Laboratories

22022 Trans-Canada Highway, Senneville, Quebec, H9X 1C1, CANADA (514)630-8200 www.criver.com

Cirion Clinical Trial Services Inc. 3150 Delaunay, Laval, Quebec, H7L 5E1, CANADA (450)682-2231 businessdevelopment@cirion.com www.cirion.com

CiToxLAB North America

445 Armand-Frappier Blvd.

Laval, Quebec, H7V 4B3, CANADA (450)973-2240x1816 mikaelianr@ca.citoxlab.com www.citoxlab.com

CNS Contract Research Corp.

550 University Avenue Suite 508, Charlottetown, PEI, C1A 4P3, CANADA (902)628-4389 info@cnscro.com cnscro.neurodyn-inc.com

Discovery Research International Inc. 202 St. Clair Ave. West, Toronto, Ontario, M4V 1R2, CANADA (905)730-5333 www.discoveryreasearchintl.com

DSA Consultants

1660 North Service Road East, Units 106 & 107, Oakville, ON, L6H 7G3, CANADA (905)827-0057x221 info@dsaconsultants.com www.dsaconsultants.com

Eliapharma Services Inc.

230 Bernard Belleau, Laval, Quebec, H7V 4A9, CANADA (514)862-7393 info@eliapharma.com www.eliapharma.com

Embree Industries Ltd.

151 Birge Street, Hamilton, Ontario, L8L 3L6, CANADA (905)529-7187 sales@embreeindustries.com embreeindustries.com

Endpoint Research Ltd.

2595 Skymark Ave. Suite 210, Mississauga, Ontario, L4W 4L5, CANADA (416)626-0299 endpointrg.com

Everest Clinical Research Inc.

Chemi Pharmaceutical Inc.

Compliance Marketing Services

A-1331 Crestlawn Drive, Mississauga, Ontario, L4W 2P9, CANADA (416)503-2825 lliepold@compliancems.com www.compliancems.com

675 Cochrane Drive Suite 408 East Tower, Markham, Ontario, L3R 0B8, CANADA (905)752-5222 corporate.communications@ecrscorp.com www.ecrscorp.com

Centre for Commercialization of Regenerative Medicine

Corealis Pharma Inc.

Fillab Inc.

200 boul. Armand Frappier, Laval, Quebec, H7V 4A6, CANADA (450)973-7505 info@corealispharma.com www.corealispharma.com

11750 4th Avenue, R.D.P. Montreal, Quebec, H1E 3B3, CANADA (514)494-8286 info@fillab.com www.fillab.com

CPL

Genesys Venture Clinical Development Solutions

1435 Bonhill Road Unit 37 & 38, Mississauga, Ontario, L5T 1V2, CANADA (905)670-7600x101 mail@chemipharmaceutical.com www.chemipharmaceutical.com

661 University Avenue, Suite 1002 Toronto, ON M5G 1M1 Canada T: 416-946-8869 stacey.johnson@ccrm.ca www.ccrm.ca CCRM is a Canadian not-for-profit funded by the Government of Canada, the Province of Ontario, and leading academic and industry partners. It supports the development of regenerative medicines and associated enabling technologies, with a specific focus on cell and gene therapy.

CCRM has a 40,000 square foot space dedicated to advanced cell manufacturing that includes a fully resourced de-

7600 Danbro Crescent, Mississauga, Ontario, L5N 6L6, CANADA (905)821-7600 jsahai@cplltd.com www.cplltd.com

Custom Biologics

115 Skyway Ave. Toronto, Ontario, M9W 4Z4, CANADA (416)479-3773 dmamelak@custombiologics.com www.custombiologics.com

Dalton Pharma Services

349 Wildcat Road, Toronto, Ontario, M3J 2S3, CANADA (416)661-2102 chemist@dalton.com www.dalton.com

22 BIOTECHNOLOGY FOCUS December 2017/January 2018

4-1250 Waverly Street, Winnipeg, Manitoba, R3T 6C6, CANADA (204)478-5607 info@genesysventure.com www.genesysventure.com

Genvion Corporation

500 Camiel System Street, Winnipeg, Manitoba, R2J 4K2, CANADA (204)663-2866 tony@genvion.ca www.genvion.ca

GI Chemtec International

1456 Wallace Road, Oakville, Ontario, L6L 2Y2, CANADA (905)469-1940 products@glchemtec.ca www.glchemtec.ca

Outsourcing Guide Groupe Parima Inc.

4450 Cousens, Montreal, Quebec, H4S 1X6, CANADA (514)338-3780 bd@groupeparima.com www.groupeparima.com

Importfab Inc.

50 Hymus Boulevard, Montreal, Quebec, H9R 1C9, CANADA (514)694-0721 fastpharma@importfab.com www.importfab.com

ImmuniT

141 President-Kennedy Ave. 5th Fl. Ste. SB-5658, Montreal, Quebec, H2X 1Y4, CANADA (514)987-3380 bud@immunit.com www.immunit.com

Inflamax Research Inc.

1310 Fewster Drive, Mississauga, Ontario, L4W 1A4, CANADA (905)282-1808 site1.inflamaxresearch.com

InSymbiosis

245 Victoria Avenue, Montreal, Quebec, H3Z 2M6, CANADA (514)807-9315 info@insymbiosis.com www.insymbiosis.com

Integrated Research Inc.

(450) 656-4404 jsblais@kabs.com www.kabs.com

Neopharm Labs

865 Michele-Bohec Blvd.

Blainville, Quebec, J7C 5J6, CANADA (450)435-8864 mjlachapelle@neopharm.ca www.neopharm.ca

KGK Synergize Inc.

1440-255 Queens Ave. London, Ontario, N6A 5R8, CANADA (519)438-9374x222 admin@kgksynergize.com www.kgksynergize.com

NoAb BioDiscoveries

8-2820 Argentia Road, Mississauga, Ontario, L5N 8G4, CANADA (905)814-5238 info@noabbiodiscoveries.com www.noabbiodiscoveries.com

LAB Research Inc.

445 Armand-Frappier Blvd.

Laval, Quebec, H7V 4B3, CANADA (450)973-2240 tanguaya@labresearch.com

Northern Lipids Inc.

8855 Northbrook Court, Burnaby, BC, V5J 5J1, CANADA (604)222-2548 info@northernlipids.com www.northernlipids.com

Lambda Therapeutic Research

460 Comstock Road, Toronto, Ontario, M1L 4S4, CANADA (416)752-3636 www.lambdacanada-cro.com

NovaTek International

2537 Guenette Street, St. Laurent, Quebec, H4R 2E9, CANADA (514)668-2835 sales@ntint.com ntint.com

MAC Closures Inc.

2250 South Service Rd. West, Oakville, Ontario, L6L 5N1, CANADA (905) 827-8600 www.mac.ca

Nucro-Technics

2000 Ellesmere Road Suite 16, Scarborough, Ontario, M1H 2W4, CANADA (416)438-6727 info@nucro-technics.com www.nucro-technics.com

Maxxam Analytics

8577 Commerce Court, Burnaby, BC, V5A 4N5, CANADA (604)734-7276 pharma@maxxam.ca www.maxxam.ca

O’Hara Technologies

1351 Sunnybrooke Boulevard, Dollard-des-Ormeaux (Montreal), Quebec, H9B 3K9, CANADA (514)683-1909 info@iricanada.com www.iricanada.com

McCarthy Consultant Services Inc.

Intini Marketing Inc.

Medicago Inc.

9270 Recollet Street, Brossard, Quebec, J4X 1B9, CANADA (450)619-6431 thomas@intini.com www.intini.com

inVentiv Health Clinical

2500 Einstein Street, Quebec City, Quebec, G1P 0A2, CANADA 1-866-262-7427 inventivheathcliniques.com/en/

Ionics Mass Spectrometry Group Inc. 32 Nixon Road, Bolton, Ontario, L7E 1W2, CANADA (905)857-5665

ITR Laboratories Canada Inc.

19601 Clark Graham Blvd.

Baie d’Urfé, Quebec, H9X 3T1, CANADA (514)457-7400 marketing@itrlab.com www.itrlab.com

KABS Pharmaceutical Services

4500 Rue de Tonnancour, Saint Hubert, Quebec, J3Y 9G2, CANADA

1151 Gorham Street, Unit 8, Newmarket, Ontario, L3Y 8Y1, CANADA (905)836-0033 dpartridge@mccarthyconsultant.com www.mccarthyconsultant.com 1020 de l’Église Suite 600, Ste-Foy, Quebec, G1V 3V9, CANADA (418)658-9393 info@medicago.com www.medicago.com

4100 Molson Street Suite 400, Montreal, Quebec, H1N 3Y1, CANADA (514)461-1300 dominique.johnson@mhicc.org www.mhicc.org

265 Watline Ave. Mississauga, Ontario, L4Z 1P3, CANADA (905)361-8910 microbix@microbix.com www.microbix.com

MRM Proteomics Inc.

2108-4464 Markham Street, Victoria, BC, V8Z 7X8, CANADA (604)800-2296 info@mrmproteomics.com www.mrmproteomics.com

Omega Laboratories Ltd.

11177 Hamon Street, Montreal, Quebec, H3M 3E4, CANADA (514)335-0310 info@omegalaboratory.com www.omegalaboratory.com

Ontario Institute for Regenerative Medicine

MHICC – Montreal Heart Institute Coordinating Center

Microbix Biosystems Inc.

20 Kinnear Ct. Richmond Hill, Ontario, L4B 1K8, CANADA (905)707-3286 www.oharatech.com

661 University Ave. Suite 1002 West Tower, Toronto, Ontario, M5G 1M1, CANADA oirm@oirm.ca oirm.ca

Patheon

2100 Syntex Ct. Mississauga, Ontario, L5N 3X4, CANADA (905)821-4001 www.patheon.com/en-us

Pharma Launch Inc.

1100 Burloak Drive Suite 300, Burlington, Ontario, L7L 6B2, CANADA (905)484-1299 dave.bard@pharmalaunch.ca www.pharmalaunch.ca

Pharma Medica Research Inc.

6100 Belgrave Road, Mississauga, Ontario, L5R 0B7, CANADA December 2017/January 2018 BIOTECHNOLOGY FOCUS 23

Outsourcing Guide (905)624-9115 solutions@pharmamedica.com www.pharmamedica.com

Pharmachem Access Inc.

60 Bristol Road East Suite 502, Mississauga, Ontario, L4Z 3K8, CANADA (905)804-0654 jdpandya@pharmachemaccess.com www.pharmachemaccess.com

PharmaNet/i3

2500 Rue Einstein, Quebec, Quebec, G1P 0A2, CANADA (418)527-4000 earlystage@pharmanet.com www.pharmanet-i3.com

Pharmetics Inc.

3695 Autoroute des Laurentides, Laval, Quebec, H7L 3H7, CANADA (450)682-8580 info@pharmetics.com www.pharmetics.com

Pillar5 Pharma Inc.

365 Madawaska Blvd.

Arnprior, Ontario, K7S 0C9, CANADA (613)623-1210 info@pillar5pharma.com www.pillar5pharma.com

Piramal Healthcare (CANADA)

110 Industrial Parkway North, Aurora, Ontario, L4G 3H4, CANADA (905)727-9417 www.piramalpharmasolutions.com

PnuVax SL Bio

6000 Royalmount Ave. Montreal, Quebec, H4P 2T1, CANADA (438)288-0746 contact@pnuvax.com www.pnuVax.com

Purcell Inc.

10-232 St. George Street, Toronto, Ontario, M5R 2N5, CANADA (416)586-1266 www.purcellclinicalresearch.com

Quadro Engineering Corp.

613 Colby Drive, Waterloo, Ontario, N2V 1A1, CANADA (519)884-9660 quadrosales@idexcorp.com www.quadro.com

Quality & Compliance Services

2550 Argentia Road Suite 119, Mississauga, Ontario, L5N 5R1, CANADA 1-877-877-5152 dcampbell@qualityandcompliance.com www.qualityandcompliance.com

Ropack Inc.

10801 Mirabeau Street, Montreal, Quebec, H1J 1T7, CANADA (514)353-7000 paul.dupont@ropack.com www.ropack.com

Scents Alive

300 North Rivermede Road, Vaughan, Ontario, L4K 3N6, CANADA (905)880-4341 s centsalive.com

Scimega Research

5764 Monkland Avenue Suite 336, Montreal, Quebec, H4A 1E9, CANADA (450)629-2200x226 info@scimega.com www.scimega.com

SGS Life Sciences Services

6490 Vipond Drive, Mississauga, Ontario, L5T 1W8, CANADA (905)364-3757 lss.info@sgs.com www.sgs.ca/lifescience/

SignalChem

110-13120 Vanier Place, Richmond, BC, V6V 2J2, CANADA (604)232-4600 orders@signalchem.com www.signalchem.com

StemCell Technologies

1618 Station Street, Vancouver, BC, V6A 1B6, CANADA (604)877-0713 inf0@stemcell.com www.stemcell.com

Stiris Research Inc.

4420 Colonel Talbot Road, London, Ontario, N6P 1R1, CANADA (519)652-5327 sburgess@stirisresearch.com www.stirisresearch.com

Syreon Corporation

260-14041 West 8th Avenue, Vancouver, BC, V6H 1C9, CANADA 1-(604)676-5900 info@syreon.com www.syreon.com

Test Company Saurabh

Test, Quebec, J7C 5J6, CANADA (949)521-0109 saurabhgandhe3.com

cjackson@therapurebio.com www.therapurebio.com/CDMO

Trillium Health Care Products

2337 Parkedale Avenue, Brockville, Ontario, K6V 5W5, CANADA (613)342-4436 erica.sosnowski@trilliumhcp.com www.trilliumhcp.com

Trillium Technologies Group Inc. 7271 Warden Ave. Suite 42-44, Markham, Ontario, L3R 5X5, CANADA (905)604-8604 info@trilliumconsult.com www.trilliumconsult.com

Uman Pharma Inc.

100 de l’Industrie Blvd.

Candiac, Quebec, J5R 1J1, CANADA (450)444-9989 info@umanpharma.com www.umanpharma.com

Vaisala

100-13775 Commerce Parkway, Richmond, BC, V6V 2V4, CANADA 1-800-683-8374 veriteqsupport@vaisala.com www.vaisala.com/en/lifesciencehightech/ Pages/default.aspx

Viventia Bio Inc.

147 Hamelin Street, Winnipeg, MB, R3T 3Z4, CANADA (204)478-1023 bd@viventia.com www.viventia.com

Wax-it Histology Services Inc.

202-2386 East Mall, Vancouver, BC, V6T 1Z3, CANADA (604)822-1595 www.waxitinc.com

WellSpring Pharma Services Inc. 400 Iroquois Shore Road, Oakville, Ontario, L6H 1M5, CANADA 1-844-879-7427 info@wellspringpharma.ca www.wellspringcmo.com

White Owl Global Services Ltd.

9622 Trans Canada Route, Saint-Laurent, Quebec, H4S 1V9, CANADA (514)335-3838 www.tetragenx.com

610 Ford Drive Suite 101, Oakville, Ontario, L6J 7W4, CANADA (905)829-4546 info@whiteowlglobal.com www.whiteowlglobal.com

The Unique Group Ltd.

ZM Company

TetraGenx Inc.

525 Denison Street Unit 3A, Markham, Ontario, L3R 1B8, CANADA (905)479-4801 asherl@theuniquegroup.com www.theuniquegroup.com

Therapure Biopharma Inc.

2585 Meadowpine Blvd.

Mississauga, Ontario, L5N 8H9, CANADA (905)286-6206

24 BIOTECHNOLOGY FOCUS December 2017/January 2018

96 Russell Street, Georgetown, Ontario, L7G 5Z1, CANADA (416)825-3490 info@zmcro.com zmcro.com

To see this story online visit www.biotechnologyfocus.ca/ outsourcing-company-guide/

661 University avenue, Suite 1002 toronto, on m5G 1m1 canada tel: 416-978-3751 info@ccrm.ca www.ccrm.ca

StatiSticS

ServiceS

Launched: June 14, 2011 Number of employees: 70+ • $15 million in seed funding from the Government of Canada’s Networks of Centres of Excellence program • $40 million in funding for the Centre for Advanced Therapeutic Cell Technologies from GE Healthcare and the Federal Economic Development Agency for Southern Ontario (FedDev Ontario) • Our engineers and scientists have over 300 combined years of cell and gene therapy experience and more than 400 peer-reviewed publications.

CCRM’s services include business and regulatory expertise and a variety of technical services. In 2018, we will offer contract manufacturing of cell and gene therapies for early-stage clinical trials in our GMP facility.

Business Services • Regulatory affairs consultation and navigating both Canadian and international regulatory policies for cell and gene therapy • Product classification, transplant registration and Health Canada regulatory interaction and submission services • Technology reviews, including data review • Market assessment of novel technologies • Competitive landscape analysis from both IP and market perspectives • Patent strategy • Defining appropriate commercial paths Technical Services • Cell and vector process development and optimization for commercial manufacturing • Process scale-up and scale-out, closure and automation • Media formulation and development • Genome editing • Pluripotent stem cells • Cell-based immunotherapies

Who We are CCRM is a Canadian not-for-profit funded by the Government of Canada, the Province of Ontario, and leading academic and industry partners.

It supports the development of regenerative medicines and associated enabling technologies, with a specific focus on cell and gene therapy.

CCRM has a 40,000 square foot space dedicated to advanced cell manufacturing that includes a fully resourced development facility used to both evaluate and advance technologies. CCRM aims to accelerate the translation of scientific discovery into new companies and marketable products for patients. CCRM is the commercialization partner of OIRM and the University of Toronto’s Medicine by Design.

Key perSonnel

FacilitieS

Dr. Michael May, President and CEO; Dr. Peter Zandstra, Chief Scientific Officer; Dr. Kim Warren, Chief Technology Officer; Mitchel Sivilotti, Chief Operating Officer; Michael Israels, Chief Financial Officer; and, Jana Machan, VP Commercialization.

Our 40,000 ft² (~4,000 m²) home in Toronto’s Discovery District houses on-site consultation offices, a large and fully-equipped containment level 2 (CL2) laboratory, and a stand-alone 17,000 ft² (~1,600 m²) Good Manufacturing Practices (GMP) facility, to be operational in 2018. CCRM, in partnership with GE Healthcare, operates the Centre for Advanced Therapeutic Cell Technologies (CATCT). CCRM, in partnership with GE Healthcare, operates the Centre for Advanced Therapeutic Cell Technologies (CATCT). We have: • one of North America’s largest installations of DASBox reactors (24 at 200 mL), and an ambr15 system for robust design of experiment (DOE) development • multiple rocking-motion and stirred-tank bioreactors in various configurations, with the capability to operate at culture volumes up to 200 L • cutting-edge equipment for cell processing and analytics, such as the GE Sefia and Sepax II, in-line sensors, TFF and acoustic filtration systems, advanced automated liquid handling and tissue culture robots, powerful LCMS capabilities and polychromatic flow cytometers.

WWW.ccrm.ca December 2017/January 2018 BIOTECHNOLOGY FOCUS 25

outsourcing

| by Nestor Arellano

Plant-made pharma specialist faces

challenges of outsourcing to grow business

Pick-up some key outsourcing dos and don’ts from the experiences of Ontario’s PlantForm Corp.

O

utsourcing, contracting out, offshoring, nearshoring. By whatever name you call it, the practice of using a third-party (either onsite, offsite, or a continent away from your business) is being used by almost any company, in any industry, in any country.

For Canadian biotech firms, especially midsized companies and promising start-ups, outsourcing provides the opportunity to cut production cost, obtain manufacturing scale, save on labour cost, or access key expertise.

For many businesses in the industry, it could

spell the difference between getting by and getting to the next level.

“Outsourcing provides a lot of advantages for many companies. It can help free-up cash, time and other resources,” says Dr. Don Stewart, president and CEO of the early-stage biosimilar manufacturer PlantForm Corp. “When used effectively, an outsourcing strategy also allows companies to focus their attention on what they do best and devote their resources to honing their competitiveness.”

Founded in 2008, PlantForm continues to advance the vivoXPRESS platform developed at the University of Guelph by a team led by Dr. J. Christopher Hall, a founder of PlantForm and the company’s Chief Scientific Officer.

PlantForm uses the technology to geneti-

26 BIOTECHNOLOGY FOCUS December 2017/January 2018

cally modify tobacco plants to manufacture biopharmaceuticals. This is what differentiates PlantForm from other biosimilar manufacturers that typically use mammalian cells.

Creating a biologic from mammalian cells is inherently expensive. It requires a larger facility to house huge fermentation equipment. The process requires complex technical systems to control factors such as, water, oxygen levels, steam, and temperature.

By contrast, a plant-based facility is simpler, according to Stewart. The manufacturing system costs roughly one-tenth of that of one designed for mammalian cell manufacturing.

What’s more development time is shorter.

The company is able to grow plants for four weeks before that can be infiltrated with

outsourcing

Dr. J. Christopher Hall an Agrobacterium solution which contains the gene needed to create the desired protein product. It takes another week for the Agrobacterium to infect the plant and make it produce the desired protein.

PlantForm has used tobacco plants to develop monoclonal antibodies and proteins that are used to treat Ebola, cancer, HIV/AIDS, and other diseases.

PlantForm’s lead product is a biosimilar version of Roche’s age-related macular degeneration (AMD) drug Lucentis, the brand name for ranibizumab. PlantForm is advancing a plant produced trastuzumab for a novel indication, which has been licensed by the company (nerve regeneration after acute trauma).

Taking it to the next level Apart from this project, PlantForm is also involved in developing bio antidotes for bio terrorism agents. In 2013, PlantForm completed a contract with the United States Defence Advanced Research Projects Agency or DARPA for research and development of Butyrylcholinesterase (BuChE) - an enzyme used to provide prophylactic protection against nerve agents, such as sarin gas. PlantForm remains involved in a BuChE program under contract with Defence Research and Development Canada.

PlantForm is using outsourcing to take the company to “the next level.”

Esther Lo, project manager at PlantForm, works in the company’s drug development department and is the main point of contact between the company and its partners or clients. She says one of the company’s long-term goals is to have its own facility to manufacture their own products so that they won’t need a CMO to make biomass and purify product.

Lo said PlantForm needs CROs for all nonmanufacturing work such as animal safety and toxicology studies, clinical trials management, and some niche analytical testing. “…being relatively small, we don’t have the

facilities to manufacture large quantities that may be needed,” she explains. “Outsourcing is critical to move different projects…Not every organization has the capability to everything in-house.”

For instance, PlantForm does not have the scale to supply large clinical studies, says Craig Binnie, vice-president of the company.

“We can make only so much,” according to Binnie. “We also need to outsource the nonmanufacturing part of the drug development process.”

“Small companies like PlantForm don’t have animal facilities or sophisticated analytical equipment, so we have to outsource these tasks to other labs,” he says.

Other tasks that are outsourced include: • Global Laboratory Practices (GLP)-compliant animal safety studies • Physico-kinetic and Bioanalytical work • Management of early and late-stage human clinical studies Binnie clarifies that PlantForm conducts twothirds of its analytical work in-house and has the rest done if possible by specialized providers in Ontario. Preclinical and Clinical CRO services are sourced mostly from within Canada. However much of the manufacturing has been done out of the country. The goal of manufacturing at large-scale to standards is part of PlantForm’s plans.

“There are only so many facilities available in the world that can manufacture in plants to current standards,” says Binnie. “No one in Canada does the manufacturing we need. We hope we can do this in the future.”

The use of outsourcing is typical to many biotech firms in the country, according to Perry Niro, president of Pharmed Canada.

Pharmed Canada is an association of manufacturers and subcontractors in Canada’s pharmaceutical and medical services industries. As a non-profit organization its aims to promote business development for its members both in Canada and abroad.

“For instance, manufacturing is an important part of the supply chain,” he says. “However, not many companies have the capability to produce at scale, so they need to turn to a competent third-party.”

In 2015, he says, the world outsourcing market was worth US$71 billion. It has been growing by as much as six per cent each year. Contract manufacturing in the Canadian pharma industry is expected to reach $9 billion/year, according to Niro.

Niro sees an increase in M&A activity in the global biotech outsourcing market as well as a trend among customers to look for “one-stopshop” capability in providers.

Making the most out of outsourcing As a company that uses outsource providers, PlantForm has learned a few valuable lessons in how to use outsource providers affectively.

Companies tend to rely on outsource providers to fulfill either a capability or capacity gap, or a combination of the two, says Lo. According to Binnie, one of the key pain points that biotech firms face when dealing with providers occur in the area of tech transfer.

“We want manufacturers to be able to replicate our technology. However, there are times when the yield and expression levels are below that of what you expect,” he says.

“This could be a huge problem if you have not budgeted for the discrepancy.”

He suggests that companies maintain good channels of communication with providers.

This will help ensure that providers and the company are working on the same page. The strategy will also help companies manage expectations and head-off potential trouble before it occurs.

Here are other points to consider: • Before seeking a contractor, thoroughly and honestly evaluate what processes need to be outsourced. Make sure the outsourcing task is in-line with your business plan.

• In choosing an outsource service provider, carefully evaluate their capabilities against the things you are looking for. Consider things such as capability, reliability, expertise, and compliance.

• Audit the provider. For instance, before deciding on a CRO, have a pre-meeting with the provider. Inspect the track record of the provider when it comes to compliance and delivering on projects. Make sure the company has no negative notices from regulatory agencies. Seek out client references. Do a physical inspection of facilities.

When working with manufacturers located in a different jurisdiction or another country make sure you are familiar with the regulations and laws in that place as they pertain to your operation, Stewart points out.

He says cultivating a good relation with thirdparty companies is important.

“Understand the environment you are going into,” he says. “It’s important to be sensitive to the culture or the country as well. This will go a long way in smoothing out things when challenges arise.”

To see this story online visit www.biotechnologyfocus.ca/plant-madepharma-specialist-faces-challenges-ofoutsourcing-to-grow-business/

December 2017/January 2018 BIOTECHNOLOGY FOCUS 27

20th anniversary

| Compiled by Shawn Lawrence

Biotechnology 20th Anniversary Special: Years 16 to 20!

Biotechnology Focus in the years 2013 to 2016

This marks the final installment in our Biotechnology Focus twentieth anniversary celebration series. In this edition, we look back at our past issues from the years 2013 to 2016.

February 2013

June 2013

November 2013

June/July 2014

Continuing with our cross-Canada regional spotlights, our focus this month once again shifts to Canada’s west coast, to BC’s burgeoning life science sector. We start things off with Daniela Fisher’s feature story on Dr. Ali Tehrani’s company Zymeworks, and its unique model for smart drug design. Of course, we all know the successes that have since unfolded for Zymeworks, but we’re still very proud of the fact we were one of the first to cover this company. Among the other BCstories from this issue, we spotlight the Proof Centre, CDRD, and Life Sciences BC.

Running down this month’s editorial lineup, we had stories on Biofuel developments and innovation in Canada, a spotlight piece on agri-food discovery place and going beyond the bench to scale up great ideas, and a guest column on gene patents exploring whether or not human genes are patentable.

In our cover story, Ian Rogers discusses umbilical cord blood banking (UCB), the differences between private and public banks, and the latest indications and discoveries for UCB cells. Also in this issue, we look at biosimilar patent enforcement in Canada, spotlight immunotherapy and cancer cell therapy company Stem Cell Therapeutics (now Trillium Therapeutics). In industry news, Endo Health buys Canadian specialty drug maker Paladin Labs for US$1.6 billion.

Stories from this special Ontario edition include a spotlight piece on the new commercial engine for Ontario cancer technologies The Fight Against Innovation Trust (FACIT); an innovator piece on NSAID developer Antibe Therapeutics; a Q&A with Clinical Trials Ontario president and CEO Susan Marlin, a profile piece on McMaster University’s Biomedical Engineering and Advanced Manufacturing Centre and an analysis piece on the state of Ontario’s biotech and life science sector.

Vol. 16 No. 1

March 2013 Vol. 16 No. 2

In this Hot Button issue we cover industry trends, jobs, productivity, innovation and imminent changes in policy around R&D tax credits.

There’s also a great advice piece inside on going public via the reverse takeover route.

Vol. 16 No. 5

July/August 2013 Vol. 16 No. 6

With ABIC 2013 set to take place in Alberta, we took a closer look Alberta’s innovation ecosystem via feature stories on the Li Ka Shing Institute of Virology, AVAC Ltd., Alberta Innovates Technology Futures, Alberta Innovates Health Solutions, and Alberta Innovates Bio Solutions.

2013

Vol. 16 No. 9

December 2013/ January 2014 Vol. 16 No. 10

In this special issue, we looked at how Ontario-as well as Canadian life science companies in general-can find ways to tap into emerging market opportunities ( through international partnerships and collaborations. In industry news, U.S based Versant Ventures expands its operations into Canada launching Blueline Bioscience Inc. in Toronto and Inception sciences in Vancouver.

2013

2014

Vol. 17 No. 3

August/September 2014 Vol. 17 No. 4

Just a decade after his father (Dr. Francesco Bellini) appeared on our cover, Bellus Health CEO Roberto Bellini repeats the feat.

Febr

Vol.18

Apri

Vol. 1

Two m bulk o ogy Fo a follo on his title Is life or The se writte looks in Can insigh perso down

2014

Biotechnology Focus in the years 2013 to 2016

2013 April 2013

September 2013

February/March 2014

October/November 2014

June

With the Bio 2013 set to take place in Illinois, our cover story for this Ontario focused issue not only looked at Ontario’s growing bio-product sector, but also new ways the province was attracting outstanding companies. Rounding out the issue, we interviewed the new head of Ontario’s Ministry of Research and Innovation, Reza Moridi for the very first time. Thankfully, it’s a friendship that is still going strong today.

The Canadian biotech sector goes under the microscope in this edition via our Canadian biotech survey response story and Wayne Schnarr’s editorial submission Canadian biotech - the path forward. In positive news, Lumira’s Jacki Jenuth and Peter van der Velden observe the opening of the IPO window south of the border and wonder if the same trend could take place in Canada.

Finally, the featured innovator this month was Canadian industry icon Dr. Albert Friesen, a prominent player in the development of Canada’s first biotech product WinRho®.

Inside this edition, Durhane WongRieger and Christine Bayaert explore Canada’s rare disease and orphan drug landscape, while citing the need for developing a proper framework strategy to treat rare disorders. Next, Dr. Mona Sabharwal uses the panCanadian Oncology Drug Review (pCODR) process as an example for raising the bar for new drug and technology reviews in Canada. Wrapping this issue up is Tony Pullen’s five page special report “Is Canadian biotech coming to life” which looked at the past, present and future of the capital markets for Canadian biotech companies.

Inside, Saskatchewan’s Ag-West Bio celebrates its 25th anniversary. Jonathan Goodman formerly the CEO of Paladin Labs introduces our readers to his new company Knight Therapeutics, and industry veteran Anthony Giovinazzo discusses the challenges of funding clinical trials specific to smaller biotech companies.

Anoth jam p super storie FACIT Struc CCRM organ life sc

Vol. 16 No. 3

May 2013

Vol. 16 No. 4

Our cover story this month discusses the general public’s role in drug discovery and innovation, specifically as it relates to clinical research and patient engagement in personalized medicine. Running down the rest of the editorial lineup, the Biointerfaces Institute opened at McMaster University, the Standards Council of Canada launched a National Biotech Standards Committee, and InterVac received its final certification.

Vol. 16 No. 7

October 2013 Vol. 16 No. 8

Inside this Quebec themed issue: the U.S. Supreme court finds isolated DNA not patentable. The nearly completed CRCHUM, Montreal’s new super hospital gets ready for its grand opening. The NEOMED Institute solidifies its reputation as a one stop shop for drug development, and the CQDM celebrates its 5th anniversary.

28 BIOTECHNOLOGY FOCUS December 2017/January 2018

Vol. 17 No. 1

April/May 2014 Vol. 17 No. 2

Strategic funds are on the rise in Canada, with venture groups raising funds that are anchored by major strategic partners, such as big pharma companies.

Vol. 17 No. 5

December 2014/January 2015

Vol.1

Aug

Vol. 1

Vol. 17 No. 6

In his cover story Canadian Healthcare Technologies: What’s Hot & What’s Not? Wayne Schnarr suggests investor interest in the sector is increasing and tells our readers what areas are seeing the most activity.

In our innovator spotlight, Anthony Giovinazzo discusses Cynapsus Therapeutics and its lead product for the management of “OFF” motor symptoms of Parkinson’s disease.

While in his Across Canada piece Error or Folly?, experienced biotech executive David Allan underlines the reasons basic research development in Canada is in a sorry state.

with Q Innov Daou Remi, piece Queb taking

on Onght ; an oper h and e on cal ufacece and

20th anniversary Well that’s a wrap on the final installment of our five part timeline series spanning 20 years of Biotechnology Focus. We really hope you enjoyed this stroll down memory lane as much as we did, and more importantly, we look forward to serving your information needs for another 20 years!

From all of us to all of you, thank you for sticking with us!

February/March 2015

Vol.18 No. 1

The orphan drug conversation is in full swing with a full slate of articles in this issue, covering everything from specialty drug pricing to orphan drug/ rare disease policy.

April/May 2015 Vol. 18 No. 2

Two major reports make up the bulk of this edition of Biotechnology Focus. The first of which is a follow up piece by Tony Pullen on his industry report from 2014, title Is Canadian biotech coming to life or is much ado about nothing?

The second report, an eight pager written by Michelle Hampson looks at the clinical trial landscape in Canada and includes valuable insights from various industry personalities. Both reports are still downloadable on our website.

August/September 2015 Vol. 18 No. 4

Next we shift our focus to our annual spotlight on Quebec’s biopharma sector, and this edition too is jam packed with content. It features interviews with Quebec Minister Economy, Innovation and Exports Jacques Daoust, Quebec chief scientist Dr. Remi, Quirion, various spotlight pieces on different jurisdictions in Quebec, and various collaborations taking place in the province.

October/November 2015 Vol. 18 No. 5

On the cover, we reach a crucial moment in time for Canadian stem cell research and development, as the traditional powerhouse in the field has become hindered by shoestring budgets and diminishing funding resources. As Joe Sornberger explains, this puts Canada at risk of falling back to the pack. We also published the results of our first-of-its-kind employee survey of Canada’s biotechnology industry with a special 8 page report.

2015

February/March 2016

April/May 2016

A special eight page report on partnering with pharma headlines this issue, where we asked three Canadian biotech CEO’s to share their partnership experiences with our readers, nailing down a list of the do’s and don’ts to finding the right partner and making a partnership agreement work. Also, with feedback from industry experts we ranked the top biotech CEOs in Canada who elevate their companies. Rounding the issue out, Lumira Capital’s Peter van der Velden discusses the evolution of corporate engagement in the venture capital sector.

On the cover, Montreal seeks out to become a premier global destination for early-stage clinical trials, while inside, Robert Merson’s special report highlights some of the factors that drive student scientists into becoming successful bioscience entrepreneurs.

Vol. 19 No. 1

Vol. 19 No. 2

October/November 2016 Vol. 19 No. 5

We talk mergers & acquisitions as three former Canadian biotech company founders weigh in on how their deals went down, while providing some sound advice for their peers to achieve a smooth exit.

2015

2016

2016 2016

June/July 2015

June/July 2016

Another year, and of course another jam packed Ontario issue. This super-sized 40 pager includes stories on Life Sciences Ontario, FACIT, CIMTEC, OBI, TO Health!, the Structural Genomics Consortium, CCRM, OBIO, and a host of other organizations that make up Ontario’s life science industry.

In this special Bio 2016 Convention issue, we give our readers an inside peak at Johnson & Johnson Innovation’s new JLABS @ Toronto facility based in the MaRS Phase 2 tower, and also the new GE Healthcare/CCRM Centre for Advanced Therapeutic Cell Technologies called the BridGE@CCRM.

Vol.18 No. 3

Vol. 19 No. 3

August/September 2016 Vol. 19 No. 4

August/September 2015 Vol. 18 No. 4

Next we shift our focus to our annual spotlight on Quebec’s biopharma sector, and this edition too is jam packed with content. It features interviews with Quebec Minister Economy, Innovation and Exports Jacques Daoust, Quebec chief scientist Dr. Remi, Quirion, various spotlight pieces on different jurisdictions in Quebec, and various collaborations taking place in the province.

December 2015/ January 2016 Vol. 18 No. 6

The outsourcing theme dominates this edition of Biotechnology Focus, with feature stories on Canadian biomanufacturing, achieving sponsor/client partnership success, the importance of GLP compliance for CROs and much more. Inside there’s also a Special Report on going virtual, with checkpoints as to whether our readers outsourcing strategies are sound.

In this edition, Wayne Schnarr talks Canadian healthcare success stories. Next, Elizabeth Pringle looks for ways to improve the tax credit regime for life science companies. Continuing with the list, Mark Carlson stresses the importance of finding investors with great networks, and Jeffrey Graham reviews Genetic Discrimination: Creating a New Canadian Law. If this issue wasn’t big enough, there’s also a special report with Biotechnology Focus readers putting forth their Innovation Agenda priorities.

December 2016/ January 2017 Vol. 19 No. 6

Industry stakeholders weigh in on what the Canadian-European Union Comprehensive Economic and Trade Agreement (CETA) means for Canada’s life science industry.

We also look at off shoring vs. domestic outsourcing and the pros and cons of each. Sticking with the outsourcing theme, we rundown the many types of organizations that Canadian biotech SMEs turn to for their outsourcing and tech transfer needs.

December 2017/January 2018 BIOTECHNOLOGY FOCUS 29

LAST word

| By Jean-Francois Denault, MBA

A look ahead at biotech and pharmaceutical outsourcing in Canada

L

ife science outsourcing in Canada is changing.

From traditional manufacturing or clinical research outsourcing, we have witnessed the emergence of many non-traditional outsourcing activities such as clinical and lab services as well as the growth of more sophisticated company models. This change has been driven by the emergence of specialized technologies, the practice of smaller batch sizes as well as the popularization of the virtual biotech/pharmaceutical companies. These companies have been at the forefront of this change as they subcontract more functions such as research, clinical testing and manufacturing.

From a more traditional perspective, this has led to an increase in manufacturing capacity. Hence, constant growth in the manufacturing sector has been observed in the last five years, as employment in the Canadian Pharmaceutical Manufacturing sector grows steadily. In 2016, the sector employed close to 28,500 people, and the sector has showcased a steady Compound Annual Growth Rate of 1.30% over the last five years. Furthermore, the annual domestic pharmaceutical production was valued at $9.8 billion in 2016, a CAGR of 1.0% when looking back to 2008. (Source: https://www.ic.gc.ca/eic/site/lsg-pdsv.nsf/eng/h_hn01703.html) Also, a number of new manufacturing plants in Canada have been built, both traditional pharmaceutical (such as Green Cross Therapeutics and Sterinova), as well as marijuana related plants (such as Aurora and Zenabis). This new capacity has both invigorated the country’s manufacturing sector as well as giving birth to new partnering opportunities.

Concurrently, some manufacturing units belonging to large traditional pharmaceutical companies have been repurposed and privatised. The preservation of the total manufacturing capacity available in Canada has protected jobs and expertise which might have been lost, had these plants been closed down completely. These deals often include supply agreement with the seller, insuring a short term steady stream of contracts while the new company works to fill the remaining capacity with new clients. The Famar acquisition of the Bayer Plant in Quebec or the Pillar Five privatization of the former Pfizer plant Ontario are fitting examples of this trend.

This has also lead to the rise of CDMOs (Contract and Development Manufacturing Outsourcing), who offer both specialized development and manufacturing capacity. Boasting an integrated service offering, they are quickly growing in both scope and ambition. As we have seen in the US, CDMOs have no reservations about acquiring and converting big pharma assets. For example, Avara, a US-based CDMO, has been acquiring assets from GlaxoSmithKline (USA), 30 BIOTECHNOLOGY FOCUS December 2017/January 2018

Pfizer/Hospira (Italy), Astellas (US) and Astrazeneca (UK).

Finally, the growth of biologics drugs and the marijuana sectors will both have very important roles in the years ahead regarding Canadian pharmaceutical manufacturing sector capacity.

Ongoing NAFTA talks have increased worries in sectors particularly reliant on the US market. More than half of the Canadian pharmaceutical manufacturing production is exported (primarily to the United States) and a significant portion (67%) of the Canadian market is supplied by imports (68% of imports from the U.S.). This could lead to issues for companies which rely on exporting and importing for their regular operations. Furthermore, some companies employ manufacturing models where goods flow seamlessly through the US-Canadian border multiple times during production, so tightening up the border will only mean increased costs for them.

Even if NAFTA talks are successful, cross-border issues continue to create concerns. For years, many companies throughout the life science value chain have lamented the incomplete harmonization between the FDA and Health Canada regulations. While regulatory stringiness varies on both sides of the border on multiple issues, the disparity does make it challenging for the border clearance process – complexifying an already intricate import/export process between the two countries.

Finally, as CDMOs move to increase their presence in both the manufacturing, research, and commercialization functions, there are some growing concerns that CDMOs might be replicating the Big Pharma model, but without the big blockbuster drugs to generate steady streams of revenues. As such, there are challenging times ahead for these companies to carefully define their role in the life science ecosystem, and not potentially overextend their reach.

Overall, the Canadian market remains a land with distinct opportunities, but the next few years will be critical to its long term development.

Jean-Francois Denault has been working with companies in life sciences as a professional marketing consultant for over fifteen years.

To see this story online visit www.biotechnologyfocus.ca/ a-look-ahead-at-biotech-and-pharmaceutical-outsourcingin-canada/ Got something to say? Please send your comments/letters to biotechnology_focus@promotive.net

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January 8-11 2018 J.P. Morgan 36th Annual Healthcare Conference San Francisco, US Email: jpm.conferences@jpmorgan.com Web: www.jpmorgan.com

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