The 360 biotechnology companies in Canada are going after an estimated
CA$3.2 billion market this year.
Led by strong intellectual property protection afforded by the Patent Act of 1987, pharmaceutical companies and their biomedical partners have looked to Canada more than ever before over the past decade.
According to Canadian Chemical News, U.S. demand for
plant-derived chemicals is projected to grow by more than
7 percent per year, attaining a market size of $2.9 billion by 2005,
driven by otanical extracts and new plant-based pharmaceuticals.
All bases are covered in Canada. The collective spending on R&D by Canada's 79 medicine patent holders grew from 6.1 percent in 1988 to a high of 11.1 percent in 1995, according to federal regulatory figures, before leveling off at 10.1 percent in 2000 -- not quite the 18 percent rate in the U.S., but healthy nonetheless. Patented medicines have an average exclusivity period of 10 years, making the country an attractive option right from the start. Of course, equally healthy are companies like Biovail Corp., whose business model is based on formulating generic versions of drugs whose patents have recently expired, as well as Cangene, a contract manufacturer, and CRS Robotics Corporation, based in Burlington, Ontario, which makes laboratory automation systems that increase biopharmaaceutical manufacturing efficiency and accuracy.
Groups like BIOTECanada have made it known that Canada aims to lead the biotechnology sector. BIOQuebec numbers more than 200 companies in its membership, all trying to follow the lead of Merck Frosst, maker of VIOXX, which established itself in the Montreal area in 1911. In 2000, the company announced a CA$250 million investment in its Centre for Therapeutic Research in Kirkland, expanding both R&D and manufacturing capabilities for some 400 employees. DRAXIS Pharma also operates out of facilities in Kirkland.
The province's bio-activity is backed by solid R&D. Genome Quebec and Centre hospitalier universitaire de Quebec (CHUQ) signed an agreement in December for a $20 million research project in the red-hot fields of genomics and proteomics.
Ontario plans to be mentioned in the same breath as California and New England when it comes to biotech cluster development, and all indications are that the province is well on its way. Ontario life sciences companies raised CA$1.6 billion in 2000 and generated more than CA$383 million in revenue.
More than 100 biotech companies call the Toronto area home, employing 6,000 people and contributing to the province's $700 million in biotech revenues in 2000, part of the country's $1.9 billion share of an estimated $10-12 billion global market. They are just part of an overall biomedical cluster that keeps growing stronger, with new companies joining a roster filled with such elite names as Eli Lilly, GlaxoSmithKline, Astra and Ortho.
In Vancouver, AnorMed has kidney dialysis and cancer drugs in the latter stages of clinical testing. QLT Inc., maker of macular degeneration drug Visudyne, has just paid $11 million for Kinetek Pharmaceuticals, entering the world of anti-cancer and inflammatory disease treatments. And Angiotech's drug-coated stent product is attracting global interest. Also located in the area are Stressgen, a market leader in certain drugs to fight sexually transmitted disease, and Inex Pharmaceuticals.
Hemosol's blood substitute product is promising enough that it is building a 120,000-sq.-ft. (11,100-sq.-m.) plant in Mississauga, Ontario. Due to be complete in early 2002, the CA$60 million project is just the latest piece in a strong biotech area.
"With the anticipated approvals of Hemolink, the construction of the Toronto area plant is a critical step in expanding our ability to produce Hemolink at commercial-scale levels for world markets," said Hemosol President and CEO John W. Kennedy at last year's groundbreaking.
Also located in Mississauga are Biovail Corp. (a strong player in the world of generic drug development), and GlaxoSmithKline, which invests around CA$64 million a year in Ontario R&D and recently located a CA$160 million technical center which employs 500 well-paid pharma professionals. Last year, GlaxoSmithKline reached a manufacturing agreement through 2009 with outsourcing partner DRAXIS, which operates a 242,000-sq.-ft. (22,500-sq.-m.) plant that recently underwent a CA$14 million expansion in order to add a sterile lyophilization capability. That facility received U.S. FDA approval in December to begin sending its radiopharmaceutical products to U.S. buyers.
"This first site-transfer approval signals the start of revenue-generating production in our lyophilization operation," said Dr. Martin Barkin, president and CEO of DRAXIS Health. "DRAXIS will benefit in the long term from substantially improved gross margins on its lyophilized products as a result of in-house manufacturing and productivity improvements once site transfers for all the DRAXIMAGE imaging products are in place."
Other contract manufacturers are experiencing similar growth, providing a fortified infrastructure for both established drug developers and new biotech ventures without their own manufacturing expertise. Cangene handles the packaging needs of injectable, implantable or infusion drugs, and operates a facility in Winnipeg as well as in Baltimore, Maryland. Trillium Health Care operates plants in Brockville (210,000 sq. ft./19,500 sq. m.) and Perth.
Organizations from all parts of the sector will converge on Toronto in June for the 2002 Biotechnology Industry Organization global conference and exhibition, which will draw around 15,000 to a community that aims to be North America's life sciences leader.
-- Adam Bruns
