April 15, 2005 (Vol. 25, No. 8)
The “3rd Annual BioPartnering North America” conference, held February 68 in Vancouver, British Columbia, brought together 900 representatives of 450 companies worldwide to promote new collaborations and alliances.
Sponsored by the Technology Vision Group (Santa Cruz, CA), the meeting provided many networking opportunities, and presentations by numerous venture capitalists brought participants up to date on the current state of biotech industry funding and deal making, with special attention paid to Canada. Most speakers observed that biotech funding and deals are on an upswing.
Companies from the U.S., Europe, Canada, Australia, and South Africa participated in the meeting, signaling that biotech has become truly global. Asked why she came from Australia, investment director Helen Hill of Invest Australia replied, “If the science is right, we will go there.”
As 40% represented Canadian companies, it is clear that there is much interest in Canadian biotech. The meeting provided a significant opportunity for Canadian companies to show off their technologies, and British Columbia (BC) biotechs made a strong showing.
BC is the seventh largest biotech cluster in North America, the fastest growing biotech sector in Canada, and the third in North America after San Francisco and Boston. Home to about 91 biotechs, over 60% of BC’s companies focus on biopharmaceuticals and biomedical applications in cancer, inflammatory diseases, cardiovascular health, infectious diseases, and drug delivery.
KPMG’s “2003 Competitive Alternatives” report ranked the province the most cost-effective location for biotech, clinical trials, and medical devices in the Pacific Region, ahead of any of the western U.S. states, with R&D costs about 55% less than the American average.
With the province’s outstanding natural beauty, high standards of living and education, and strong economy (the lowest jobless rate since 1981), a number of recent tax changes are making the area more biotech-friendly.
As a result, BC has been able to attract new scientific talent, retain its own native brainpower, and develop management expertise, said Caroline Bruce, Ph.D., associate director, international business development, at the University of British Columbia’s Industry Liaison Office. “The federal government is also committed to doubling or tripling research funding for biotech,” Dr. Bruce said.
BC biotech has grown rapidly in the past decade. “In 1992, there were about five-to-ten companies in BC, with over two-thirds of BC biotechs created between 1991 and 2001,” said Paul Stimson, former director of BC Biotech, now head of the Human Proteome Organization (HUPO; Montreal).
BC is home to a number of veteran, profitable biotechs with products on the market, including Vancouver-based QLT, Angiotech, and Forbes Medi-Tech. Founded by immunologist Julia Levy, Ph.D., QLT pioneered photodynamic therapy (PDT), and brought Visudyne (verteporfin) for age-related wet macular degeneration, and Eligard (leuprolide for injection), for palliative treatment in advanced prostate cancer, to market with pharma partners who sell the drugs in eight countries.
Angiotech’s first two products, marketed with Boston Scientific (Natick, MA), are paclitaxel-eluting coronary stents: Taxus Express2, and Taxus Liberte, approved in nine and 18 countries, respectively. Founded in 1992, Angiotech focuses on drug-eluting medical devices and biomaterials.
Forbes Medi-Tech is developing lipid-lowering pharmaceuticals and nutraceuticals based on wood-derived sterols and testing FM-VP4 in Phase II trials for lowering LDL and raising HDL cholesterol.
Forbes has the functional food ingredient Reducol, proven to lower LDL cholesterol, on the market as a component in a number of supplements and functional foods. Reducol received European approval for use in seven major food groups last month.
BC has many other companies which are mature, clinical-stage firms, including StressGen (Victoria), and Vancouver-based Oncogenex, Cardiome, Inex, Inflazyme, International Wex Technologies, and AnorMed (Langley).
StressGen, partnered with Roche (Basel, Switzerland), is developing immune-stimulatory heat shock proteins for cancer and infectious diseases, with its most advanced product, HspE7.
Cardiome is developing drugs for two huge markets, arrhythmia and congestive heart failure. It reported additional Phase I results in March 2005 with its anti-arrhythmia drug, RSD-1235, in atrial fibrillation patients. Cardiome licensed some rights to the drug in IV form to Fuji in 2003.
Biotechs in earlier-stage trials include InNexus Biotechnology, which is developing SuperAntibody technology to improve humanized monoclonal antibodies (Mabs), and TransMabs, which enable Mabs to hit intracellular targets such as caspase with less toxicity than small molecules.
Preclinical-stage biotech firms include Xenon Pharmaceuticals and Allon Therapeutics. Allon has discovered a family of naturally occurring neuroprotective peptides and just completed a Phase Ia trial with AL-108 in Alzheimer’s.
Preclinical work showed that the drug acts against plaques and neurofibrillary tangles associated with Alzheimer’s. It plans to file an IND in for AL-208 for mild cognitive impairment after coronary artery bypass graft surgery.
Xenon licensed its obesity/ metabolic syndrome target, SCD-1 (stearoylCoA desaturase-1 inhibitor, a regulatory enzyme in fatty acid metabolism) to Novartis (Basel, Switzerland) last year for $157 million plus royalties, and licensed its HDL-raising compounds to Pfizer (New York City) for $87 million while retaining certain rights.
The basis of its HDL program, the ABCA1 gene, a major regulator of reverse cholesterol transport and HDL, was discovered by co-founder Michael Hayden, M.D. With academic collaborations, Xenon identified 17 functionally validated genes using comparative genomics and opposite phenotypes (studying families with phenotypes that are opposite to a certain disease).
Working with founder populations worldwide, Xenon also does “extreme genetics”studying rare families with extreme forms of a certain disease.
Other preclinical-stage companies include EnGene, focusing on protein drug delivery via the gut; Twinstrand Therapeutics, developing prodrugs that are latent cytotoxins; Inimex, creating peptide-based drugs to treat and prevent infections and longer-term, focusing on components of the innate immune response related to inflammation and necrosis; and Zymeworks, focusing on rational design of enzymes.
Founded by University of BC graduate Ali Tehrani, Ph.D., about two years ago with angel funding, Zymeworks is partnering with a major forestry company for efficient pulp processing.
Strong Medical Infrastructure
Like other Canadian provinces, BC biotech benefits from an extremely strong, centralized medical infrastructure. “Because we have universal healthcare, BC researchers have access to (anonymous) longitudinal patient information for its 4.3 million residents, including 19,000 new cancer patients in our province each year, whose treatment is standardized,” said Sam Abraham, Ph.D., director of the BC Cancer Agency’s technology development office.
Canadian medical institutions are part of a coordinated network, which enables researchers to do genetic research. “The national and provincial governments have taken the opportunity to invest very seriously in genomics,” noted Genome Canada’s vp of corporate development, Roger Foxall.
BC has Canada’s strongest genome initiative, to which the Canadian government has invested over U.S.$173 million in research projects, with about half of that spent on cancer.
Genome BC works closely with the BC Cancer Agency’s Michael Smith Genome Sciences Centre, the nation’s largest genome research group, on projects ranging from working with Spain on grape genomics, applying pharmacogenomics to rational chemotherapy of lung cancer, full-length bovine sequencing, to functional pathogenomics of mucosal immunity, and genomics research on Atlantic salmon.
The Genome Sciences Centre’s many research partnerships with other groups and biotech companies make high throughput screening, functional genomics, gene fingerprinting and mapping capabilities in mammalian gene expression research, identifying DNA alterations in cancer for managing cancer development and progression, and bioinformatics of mammalian gene expression.
Under the direction of Marco Marra, Ph.D., the Centre was the first to sequence the SARS virus. They accomplished this in six days using the shotgun method.
BC’s biotech industry is intimately tied to the University of BC (UBC), which has had a long-standing, successful commitment to technology transfer. Of approximately 115 companies spun-off from the university over the past 25 years, half have been biotechs, accounting for 70% of the province’s biotech companies, said Dr. Bruce.
Companies that sprung from University of BC include QLT, OncoGenex, NeuroMed, Xenon, Inex, and Migenix, among others.
“Because of QLT’s early success, faculty are aware of commercial opportunities,” said Dr. Bruce. Unlike in the U.S., UBC professors most often retain their academic positions while founding and running biotechs. Academics often doing early and subsequent research on campus work with students, reducing the need for early funding to build labs.
At the university, Martin Gleave, M.D., director of Vancouver General Hospital’s Prostate Centre, discovered a way to make tumors more susceptible to chemotherapy. With help from UBC’s Dr. Bruce, Dr. Gleave founded OncoGenex in 2000 with Scott Cormack, remaining virtual at first by leveraging the Prostate Centre’s research assets.
Dr. Bruce helped Dr. Gleave identify venture capitalists and locate inexpensive lab space in the hospital. The Centre’s tissue banks, preclinical model systems, microarray analysis, and large patient database remain key to OncoGenex’ work.
OncoGenex is developing six drugs. The lead, OGX-011, is an antisense oligonucleotide which inhibits production of clusterin, a cell-survival protein upregulated in response to standard anticancer drugs which acts as a sensitizer to resistant tumors.
OGX-011 and a second drug are being developed with Isis Pharmaceuticals’ (Carlsbad, CA) second-generation antisense technology. OGX-011 completed a Phase I trial last year, and was well-tolerated, achieved good tissue concentration, and down-regulated clusterin 91% in a dose-dependent manner, the company reported in June 2004 at “ASCO.” OncoGenex is now beginning Phase II trials in combination with hormone therapy and chemotherapy in prostate, breast, and lung cancers.
UBC professor Terrance Snutch, Ph.D., started NeuroMed in 1998 to develop calcium channel-blocking drugs for pain, anxiety, epilepsy, and cardiovascular indications. NMED-160 is its lead candidate for chronic pain, blocking N-type calcium channels without the side-effects seen blocking opioid receptors, and without creating tolerance. NeuroMed is also developing T-channel blockers to treat hypertension, stable angina and epilepsy.
Financing and Deals
“Canadian firms are not on a level playing field when it comes to raising capital from the U.S. They must start earlier and take a long-term approach,” said Nancy Harrison, senior vp, Vancouver-based Ventures West.
“There is a perception in the U.S. of high corporate rates in Canada, a complex legal system, and the question of whether it is possible to attract human capital here,” she added. For proactive tax and legal solutions, good lawyers are the key to cross-border deals.
Many BC-based companies have been successful in obtaining cross-border financing and establishing a range of collaborations and alliances. NeuroMed had Boston-based MPM Capital LP lead its third round of financing, $32 million, and OncoGenex raised $11.5 million in 2003.
Aspreva (Victoria) recently announced a $100 million IPO, with listing on the Toronto Stock Exchange and NASDAQ. The company, founded by Richard Glickman to find new uses for approved drugs in underserved diseases, forged a relationship with Hoffman LaRoche (Basel, Switzerland) in 2003 to test the pharma’s transplant drug, CellCept (mycophenolate mofetil) in autoimmune diseases.
Aspreva is conducting all trials for lupus and myasthenia gravis, while Roche focuses on its core transplantation market and regulatory issues, said Robert Silverman, global licensing director at Roche. The companies hope to file an NDA this year for lupus. Silverman noted that Roche did not find cross-border alliances problematic. “We work with innovation where we find it.”