Researchers can process data faster, enabling new drugs to be produced and marketed earlier
anadian
biotechnology firms are growing as the drive to develop new drugs has
resulted in alliances between university departments, medical research
companies and some of the world’s biggest hi-tech corporations.
There are more than 280 Canadian biotech companies, two-thirds of which
are small businesses employing a maximum of 50 people. Total annual
revenues in the sector exceed US$1 billion, while R&D spending is
more than US$585 million.
Healthcare is the main area of research, followed by agriculture, and
there is big potential for future growth. The convergence of technology
and medical research has reduced the time that researchers have to spend
on repetitive, often inconclusive experiments, with the result that
today’s biotech firms can process vast amounts of information faster
than ever before.
In turn, biotechnology has given a new impetus to the hi-tech sector.
IBM values the life sciences market at US$30 billion or more in annual
sales by 2004. Biology is replacing physics as the catalyst for new
technological development.
“The
future is the fusion of scientific disciplines,” says Frank Gleeson,
chief executive of MDS Proteomics, a Canadian biotech company that has
formed an alliance with IBM.
The rapid pace of technological growth, and the continual flow of new
medical products on the market, bodes well for Canada’s nascent
biotech companies. MDS Proteomics has set a sales target of US$500 million
over the next 10 years. Despite this, the sector is in its infancy.
“The average individual cannot comprehend what has happened in
the past half-dozen years,” says Cal Stiller, chief executive of
the US$250 million Canadian Medical Discoveries Fund.
The trend towards reducing the role of the public sector in scientific
research has stimulated the expansion of private companies working in
the field of biotechnology. Since many are new and still at the development
stage, their success depends as much on sustaining confidence in the
money markets as on advancing the cause of science.
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“Biotech
companies, especially those without any sales revenue, very much live
on our ability to raise money from the public markets, so the price
of our stock is an important issue,” says John
Kennedy, president of Hemosol,
a Toronto-based firm that specialises in blood products.
Keeping the markets happy entails a delicate balance between the shareholders
and the needs of the industry. “We believe that we properly and
correctly inform our shareholders about corporate news, and as a result
they are able to make their own choices about buying and selling our
shares,” says Mr Kennedy.
Hemosol hopes to win approval from the UK authorities to supply Hemolink,
a new product the company believes will transform surgical blood transfusions.
It is produced from haemoglobin, the oxygen-carrying red blood cells.
“We remove other components of the blood that might cause a problem
and this reduces the risk of transmitting a virus. Then we can store
Hemolink for a couple of years,” he says.
“Once
it becomes available, Hemolink will be the first widely-available real
alternative to the use of donor blood in the treatment of acute anaemia.
Anaemia can arise from several different causes, including surgery –
the initial application for Hemolink that we are targeting.”
About 25 million units of blood are used in transfusions in Europe and
North America every year. But Mr Kennedy believes the market for Hemolink
is much larger, as it could also be used to combat anaemia that often
accompanies chemo-therapy and radiotherapy, as well as heart attacks
and strokes. “The potential demand will far exceed our ability
to produce for the first few years,” he adds.
Hemosol
is negotiating with UK-based and international companies to support
its planned production and marketing of Hemolink. “Obviously, for
a small biotech company, establishing infrastructure is a major chore
and we don’t necessarily want to do that on our own, but we will
if we have to,” he adds.
As it awaits official UK and US appro-val, Hemosol is so confident in
its product that it is gearing up to produce it for commercial sale.
“We are building a manufacturing facility that will make us a leader
in this area. We believe there is no point in spending US$150-200 million
to get a product approved if you cannot produce it in commercial quantities.
And it takes three years from the moment you decide to build a factory
to manufacturing a therapeutic product like Hemolink.”
Vancouver-based QLT is conducting clinical trials for a drug designed
to reduce resistance to chemotherapy and hopes to launch it in 2004.
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Company
president Julia Levy points
out that it costs at least US$200 million to research and develop a
new drug and bring it to market. “You have to be able to justify
spending the money in terms of the size of what you get back from your
initial investment,” she says.
Dr Levy gained government funding to set up QLT in 1981 and five years
later it listed on the Vancouver Stock Exchange.
Her work on Photodynamic Therapy (PDT) involves the application of inert
chemicals that are activated by light at specific wavelengths. “The
chemicals have the tendency to accumulate in abnormal tissue in the
body. The first applications of PDT came about in terms of the treatment
of solid cancers,” she explains.
Meanwhile,
the Quebec-based company Theratechnologies is a leader in growth hormone
releasing treatments that can be applied to a variety of conditions,
including bonemarrow transplants. Listed on the Toronto Stock Exchange,
the company set up a subsidiary last summer, to maximise the potential
of its products.
It recently formed a partnership with a Japanese firm to focus on hip-fracture
applications. President Luc Tanguay says: “We expect this agreement
to deliver significant revenues for Theratechnologies and its shareholders
if all our indications are developed.”
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