We’re coming off a cash-poor year, during which about $1.4 billion in Canadian venture capital literally dried up.

So how come Andrew Baum, president/CEO of Calgary’s SemBioSys Genetics Inc., can’t wipe the grin off his face?

First reason: “We’ve got great science,” he said. By that he means the unique biotechnology he believes could lead to medical breakthroughs capable of easing the heartbreak of psoriasis and chronic eczema.

Second reason: SemBioSys has had no trouble piquing the interest of venture capitalists. The company has raised about $35 million in private financing, and has drawn notice – and significant cash – from major corporate angels, not least of which is Dow AgroSciences Canada Inc.

Dave Olecko, Business Edge
Andew Baum's company is helping turn safflowers into potential vaccines and pharmaceuticals.

Meanwhile, the company’s corporate partners include Syngenta, which calls itself the world’s largest agribusiness company.

Such strategic associations represent a seal of approval, in Baum’s view.

“They really validate us to investors,” said Baum, who hopes to launch the first of two additional major rounds of private financing this year.

All of which contradicts a notion put forward by Canadian Business magazine late in 2001. Citing a study by securities firm Raymond James Ltd., the mag listed SemBioSys among a crop of Canadian biotech companies which appear poised to launch an IPO in the next few minutes.

But someone neglected to check with the hyper-energetic CEO.

Baum explained: “There are real advantages for us to stay private. For one thing, we don’t have to cater to competing demands of public shareholders. “Our investors’ preliminary thought was one or two more private rounds of financing, followed ideally by an IPO, and a cross-border listing,” he said.

A listing? Like, where?

“When biotech companies go to heaven,” Baum grinned, “they want a listing on the Nasdaq.”

Long-shot artists and habitual gamblers tend to embrace the biotech sector with the kind of leap-before-you-look zeal once reserved for dot-coms.

And good public companies such as Calgary-based Oncolytics Biotech Inc. can seem overwhelmingly attractive, even to the most sober-sided speculator.

If Oncolytics’ anti-cancer drug, Reolysin, pans out as advertised, happy investors stand to reap a monetary windfall, while basking in the self- congratulatory glow one enjoys as an all-around friend to medical research.

But even the best of these ventures entail significant risk. One delayed regulatory approval, or one blown laboratory test, and everyone goes home on the bus.

“High risk, no question,” Baum nodded. “Look at SYNSORB,” i.e., the Calgary biotech which stumbled when its only pharmaceutical product failed to pass muster in the lab.

“Their CEO is on our board. They did a lot of things right . . . but the drug didn’t achieve clinical efficacy.”

End of story. Nor do Baum and Co. harbour illusions that SemBioSys is immune to similar catastrophes. But the CEO takes comfort in what he perceives to be built-in safeguards.

“We have advantages,” he said. “We’re a technology platform that lets us do a lot of different things. We’re not a drug or a single product.”

The scientist who runs the lab is a longtime friend and colleague of Baum’s named Maurice Moloney, with credentials solid as Mt. Rundle.

He’s chair of plant biotechnology at the University of Calgary.

And the process is called molecular farming, which summons surrealistic visions of Lilliputian labourers wielding hoes in a petri dish.

But it’s actually the production of high-test proteins, known as oleosins, by means of genetically engineered oilseeds, which explains the safflower forest in Moloney’s lab.

Potential applications include vaccines and pharmaceuticals, as well as cosmetic personal-care products.

“We can create a whole portfolio of opportunities – proteins are the building blocks of life, as well as the body’s signal conductors,” said Baum, an engineer who gets excited enough about the technology to chatter away like an expert lab rat.

“So if you have an inflammatory disease like eczema, certain proteins will find and turn off the inflammatory response,” he said.

And don’t overlook psoriasis, which – despite lame jokes from mediocre comedians – remains a heartbreaking concern for chronic sufferers.

“That’s an auto-immune disease. There is now a whole class of antibodies which you inject, and turn off the psoriasis at the source. We’re looking at that category of product, to see if we have a role to play there,” he said.

With 50 employees in a new northeast Calgary head office, and plans to commercialize its first protein sometime in 2003, SemBioSys is following a well-conceived and methodical growth strategy.

That’s sure to attract attention when the IPO finally does come around – in its own sweet time.