British Columbia continues to attract new companies and international executives to its booming biotechnology sector, making it the fastest-growing biotech industry in Canada, according to studies.
BC Biotech, the primary voice for the province’s biotechnology companies, says that only two other cities in North America, San Francisco and Boston, add more new biotech companies each year to their regions. Such groupings are called clusters in industry parlance, and the Vancouver cluster is becoming known for its vigorous growth.
“My American colleagues don’t appreciate what Vancouver has to offer until I tell them,” says Jeffrey Bacha, president and CEO of Inimex Pharmaceuticals Inc., a Vancouver company working on the commercialization of new medicines based on the innate immune response.
Bacha was recruited from the American biotech industry to set up Inimex less than two years ago.
|Photo courtesy of Inimex Pharmaceuticals Inc.|
|Inimex Pharmaceuticals CEO Jeffrey Bacha has settled right in since moving to Vancouver less than two years ago.|
Inimex currently employs 20 people. However, a new round of financing has just been completed and Bacha expects the company to increase to 30 employees, catapulting it into the top tier of biotech firms in Vancouver.
Vancouver attracts biotech companies because of the high-quality university research being done here and the province’s proactive entrepreneurial climate, notes Bacha.
“There is a good solid base of capital here,” he says, comparing the city to Atlanta, Ga., where “the science is wonderful, but the capital base is more conservative, so biotechnology never flourished there. Biotechnology is a relatively new sector in Vancouver and investors here are aggressive and ready for its high returns and high risks.”
Bacha notes that access to a strong pool of trained research people in Vancouver is another key reason the biotechnology cluster is growing.
“As our biotechnology sector builds critical mass, it makes it easier to recruit people,” agrees Bill Adams, chief financial officer for AnorMED, B.C.’s third-largest biotechnology company in 2004 based on number of employees.
Seven research scientists from Philadelphia and England, who had previously worked for the pharmaceutical company Johnson Matthey plc (JM), U.K., founded AnorMED in 1996.
In 1995, JM refocused its activities, giving the group of scientists a chance to set up their own company, and AnorMED was born. The new company acquired most of JM’s portfolio of proprietary drug candidates, including intellectual property that had been developed over the previous decade.
AnorMED moved its operation to Vancouver to get financial backing from investors. “The venture capital was here,” says Adams. “Vancouver has a supportive venture capital infrastructure. There is a fair bit of capital here and the investors are good at providing support and managerial advice.”
To date, the company, which is listed on the Toronto Stock Exchange, has raised almost $120 million to support its research and development programs.
In 2003, AnorMED spent $14.9 million on research and development, and over the past eight years has increased its number of employees from the original group of seven researchers to almost 100 – the majority of whom are scientists, including chemists, biochemists and biologists.
Langley-based AnorMED put down roots in the Greater Vancouver area for financing purposes, but it is the vibrant biotechnology cluster that keeps it here. “The access to people, the relatively low cost of doing business in B.C., the low cost of living and the fact that we have a fair bit of infrastructure here and our staff is settled here are reasons we stay. We’re not looking to move anywhere,” says Adams.
In the case of AnorMED, being situated in Langley is partly due to its proximity to the U.S. border. “Some of our senior staff commute from the States,” says Adams. “They wanted to retain their American citizenship.”
It is not just AnorMED and Inimex that employ executives from south of the border. Paul Hastings, who left a top position in San Francisco two years ago, leads QLT Inc., Vancouver’s largest biotechnology company. Other Americans working in Vancouver’s cluster are Micrologix Biotech Inc. president and CEO James Demesa and Protiva Biotherapeutics president and CEO Mark Murray.
Industry spokesmen echo Bacha’s and Adams’ reasons for why B.C. is ideally set up to become a world biotechnology centre. “The whole basis for this is the great science we have here,” says Paul Stinson, BC Biotech’s executive director.
Stinson noted that the University of British Columbia’s industry liaison office was crucial in getting the industry started by promoting the licensing of leading-edge university research to private companies for commercialization. “UBC had a lot to do with the (commercial) spinoffs. But the business environment had to be good to keep (the businesses) here.”
Stinson cites a number of reasons why B.C.’s environment is biotech-friendly, starting with the fact that a cluster of about 100 companies now operates in the province. This critical mass attracts other companies and creates a large pool of skilled and knowledgeable employees, while the industry infrastructure also includes several contract research organizations and access to clinical trial consultants.
Stinson says that the core biotech companies are a group of 40 to 45 drug-discovery firms. “The 100 companies that Industry Canada says make up our biotechnology sector include companies that sell biotechnology equipment and about 20 clinical research organizations,” he adds.
According to the industry association, research and development costs are more than 50 per cent less in B.C. compared to the U.S. average. The province also boasts competitive corporate and personal income tax rates as well as the enticement of research and development tax credits.
Vancouver’s biotech sector will likely continue growing in the future, says Inimex’s Bacha, even though there isn’t a drug-manufacturing base here. “But do we need (manufacturing) here? We still need more experienced drug development people and even if we contract out research and manufacturing, we still need people who can manage the contracting out,” says Bacha.
“I think we will continue to flourish here,” he adds. “We have a smaller cluster that is growing rapidly and two very successful companies; QLT and Angiotech are some of the most profitable biotechnology companies in North America. And there are a half dozen other companies in the latter stages of developing some promising drugs.”
Bacha compares the Vancouver cluster to San Diego’s, another prominent biotechnology cluster, along with those in San Francisco and Boston.
“Vancouver feels like San Diego did in the early 1990s when I was coming out of university,” he says. “It’s exciting, and there is a lot of goodwill between us (the biotechnology companies).”