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Partners in MindNew initiatives and partnerships aim to battle brain disease

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Championing the Business of BioteChnology in Canada

5 Editorial

6 NEWS

The brain is one of the greatest secrets of our life. The world in the future belongs to the smallness, not to the greatness, namely, how to extract max-imum from minimum.

– President of Israel, Shimon Peres. Read more on page 18.”“

Brain research Finds larger teams and More Funds Brain researchers hope to make the kinds of scientific and commercial advances that cardiovascular researchers made in previous decades. To make this happen, they’re building bigger projects and pulling together international, cross-disciplinary teams.

12 regional Profile: Brazil Brazil is becoming a life science hub. The diversity of the population, the large market and the biodiversity of the Amazon make Brazil an increasingly attractive place for biotechs to do business.

14 Sound Prediction A divergence in case law creates an unsettling prospect for biotech: what if a judge rules a patent invalid? What happens to the bio business if it loses the patent? And how can biotechs protect their patents?

22 From tobacco Plant to Manufacturing Plant Medicago is a Canadian biotech success story, having moved from the lab to the market. It’s a model for how bio businesses can build a brand and a customer base.

24 Working Smarter Spectral Diagnostics’s President and CEO Paul Walker explains how working smarter means having an end goal and a plan to reach that goal. The goal doesn’t have to be market domination, but it does have to generate profit for shareholders and patients.

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Editorial

Anybody who has lived with brain disease, or had to watch another person live with a brain disorder, knows the hope invested in brain research.

My family and I watched as Alzheimer’s destroyed our grandfather. His mind evaporated as the disease calcified his brain. The awfulness of the disease that our family had to endure can be multiplied by the millions of people developing dementia each year.

And Alzheimer’s is just one brain condition for which we have no cure. We are challenged by Parkinson’s, epilepsy and many, many personality disorders, not to mention brain damage caused by everything from the brain rattling blast of a concus-sive bomb (a threat facing Canadian soldiers) to the head-to-concrete shake-up of falling off a bike (something that could happen to any of us).

To attend a brain research seminar is partly an exercise in disappointment. The speakers announce their latest findings, remind the audience about the huge emo-tional and financial costs of brain disorders, and speak about the costs of doing research. As with every area of medical research, there isn’t enough money.

We can argue about whether researchers have enough money to make break-through discoveries. Some bio businesses conduct impressive research on shoestring budgets. At the same time, life sciences research is becoming increasingly complex and expensive—becoming Big Science. With budgets shrinking and researchers needing more funds, it’s easy to believe there isn’t the money to go around. Government, the leading financer of breakthrough science, can’t afford to give more.

But government can do more. For one, it can stem the bleed. In his new book, Thieves of Bay Street, Bruce Livesey documents how the Canadian government loses $20 billion in tax revenue annually through investment fraud. The book might best be called “fuel for vomit”—read it and regurgitate your lunch when you discover how easily white collar crooks outwit our stupefied regulators and do-nothing cops.

Canada is wealthy. But huge portions of our wealth don’t generate social and economic returns. Wealthy crooks steal our potential and, to the loss of all of us, get away with it.

Championing the Business of Biotechnology in Canada

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Championing the Business of BioteChnology in Canada May/June 2012

www.biobusinessmag.com

Partners in MindNew initiatives and partnerships aim to battle brain disease

May/June 2012 www.labbusinessmag.com

The definitive source for lab products, news and developments

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6 Bio Business May/June 2012

Advances in Animal BiotechFollowing the recent discovery of mad cow disease in California, Amorfix Life Sciences

Ltd., a company developing therapeutic antibodies and diagnostics targeting mis-folded protein diseases such as ALS, cancer and Alzheimer’s, is teaming up with Detlev Riesner of Heinrich-Heine-university in Düsseldorf, Germany. Their goal is to enhance the sensitivity and specificity of Riesner’s PLoS one published assay.

Amorfix will supply Riesner, who has a reputation as a leader in the field of prion diagnostics, with its prion-specific monoclonal antibody, generated from its proprietary ProMIS discovery technology. This antibody’s ability to predict regions of misfolded proteins will allow Reisner to refine his recent prototype assay, which is sensitive to the extremely low concentrations of infectious prions in sheep’s blood. Amorfix will retain rights to the prion-specific antibody for future developments in blood testing for human and animal prion diseases, such as sheep scrapie and bovine spongiform encephalopathy.

At the same time, the Belleville, ontario-based Bioniche Life Sciences announced plans to commercialize two canine cancer products, one of which may launch in north America as early as July. The company says it hopes its cancer therapies will be more accessible to animal healthcare practitioners than traditional chemotherapies.

Quebec Government Backs Medtronic Investment

Medtronic, a leader in the develop-ment of medical technology, plans

to expand its facilities in Kirkland, near Montreal, where the company manufac-tures cryoablation products for the treat-ment of atrial fibrillation. The company also intends to create a cryoablation train-ing centre in Pointe-Claire. Investissement Québec will pick up $15 million of the approximate $50 million price tag of this project.

“This project offers extremely promis-ing development prospects for the Montreal area and Quebec as a whole. It’ll result in the creation of 205 jobs and the retention of 205 others,” says Sam Hamad, Minister of economic Development, Innovation and export Trade and Minister responsible for the Capitale-nationale region.

“By supporting research projects in life sciences, we renew our commitment to make Quebec a dynamic place, firmly rooted in the knowledge economy,” says Quebec Premier, Jean Charest.

New Report Shows Biofuel Industry on the Rise

Gas is worth big money—just ask Alberta. But so is biofuel, with $277.3 billion of the global economy attributed to the biofuel industry, according to a recent report com-

missioned by the Global Renewable Fuels Alliance, a not-for-profit organization dedi-cated to promoting biofuel friendly policies internationally.

The report, Contribution of Biofuels to Global economy, was completed in partner-ship with the global economic research company, Cardno entrix, and provides a view of the economic growth of the biofuel industry.

“This report demonstrates that our industry has come a long way in the past decade and the future prospects for growth remain extremely positive,” says Bliss Baker, spokes-person for the Global Renewable Fuels Alliance.

The biofuel industry supported nearly 1.4 million jobs in 2012 and is forecasted to support 2.2 million jobs in 2020. The amount of ethanol produced globally has doubled since 2005 and increased three-fold in the last decade.

“The global biofuels industry is a bright spot in the current world economy and is contributing to billions of dollars to output and creating hundreds of thousands of jobs all while reducing our reliance on crude oil,” says Baker.

The united States, Brazil and the european union are some of the major contributors of ethanol production, but nations like Asia and Africa are anticipated to have a significant growth in this industry in the coming years. “A grow-ing biofuels industry in developing nations who import the bulk of their energy needs will bring wealth, jobs and prosper-ity,” says Baker.


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Obama Administration Unveils Bioeconomy BlueprintThe Obama Administration recently released its National Bioeconomy Blueprint, which lays out strategic objec-tives to help the U.S. bioeconomy real-ize its full potential and to highlight early achievements toward those objectives. The five objectives include supporting R&D investments for the future U.S. bio-economy, facilitating the transition of bioinventions from research lab to mar-ket, developing and reforming regula-tions to reduce barriers and increase the speed and predictability of regulatory processes, aligning academic institution incentives with student training for national workforce needs and recogniz-ing and supporting opportunities for the development of public-private partner-ships.

“The life sciences have proven to be a remarkably vital source of economic growth, and today they promise further game-changing advances in a wide range of commercial sectors. This admin-istration is committed to accelerating these advances,” says John P. Holdren, the president’s science and technology advisor and Director of the White House Office of Science and Technology Policy.

The president’s 2013 budget pro-poses $140.8 billion for federal R&D. Current government agency-funded stra-tegic R&D investments include $140 million to improve predictions of vaccine and drug toxicity efficacy, $30 million to support R&D in advanced biofuels, bio-energy and bio-based products, $28.94 million in pioneering research in the life and physical sciences and $8 billion to the departments of Education and Labor to create tailored training programs for community colleges in the fields of advanced manufacturing and health information technology.


News

Life Sciences Ontario, a member‐driv-en organization that represents and promotes the province’s vibrant and diverse life sciences sector, recently named Paul Lucas as their new President and Chair.

“We are very pleased to have Paul joining LSO,” says Jason Field, Executive Director of LSO. “His experi-enced leadership and dedication to the life sciences sector will help LSO continue its evolution as an organiza-tion while continuing to deliver value for all of our members.”

Lucas previously held the position CEO of GlaxoSmithKline Canada. He is an avid supporter of the life sciences sector, and creates policy recommen-dations designed to help support Canada as a global leader in innova-tion. As head of GSK Canada, Lucas was instrumental in creating the $50 million Life Sciences Innovation Fund.

The association says outgoing LSO President and Chair Jason Locklin cre-ated a stable foundation for Lucas to build on. A major highlight of his ten-ure was the signing of a historic memo-randum of understanding with BiopolisQuébec in support of the Ontario‐Québec Life Sciences Corridor.

Peter Brenders Leaves BIOTECanadaBIoTeCanada President and Ceo Peter Brenders announced his resignation from the association in early May. He will join Genzyme Canada as the new General Manager. “I am incredibly hon-oured to have been part of the association,” he wrote in a letter to members. “This role has enabled me to work on some of the most exciting developments in Canada and with some of the most passionate and talented people in our country.” Brenders was for many years the chief spokesperson for the Canadian biotech industry, speaking internationally and to media about the significance of the life science sector to the Canadian economy.

PAUL LUCAS

PETER BRENDERS

H1N1 Discovery Paves Way for Universal Flu VaccineResearchers from the university of British Columbia, led by Professor John Schrader, Canada Research Chair in Immunology and director of uBC’s Biomedical Research Centre, have found a potential way to eliminate the need for seasonal flu vaccines by creating a universal flu vaccine.

newly documented mutations of the H5n1 “bird flu” virus are increasing public health concerns. especially in the wake of the 2009 H1n1 pandemic that killed more than 14,000 people worldwide. Seasonal influenza kills 200,000 to 500,000 people annually.

“The flu virus has a protein called hemagglutinin, or HA for short. The flu virus binds to human cells via the head of the HA,” says Schrader. “Current flu vaccines target the head of the HA to prevent infections, but because the flu virus mutates very quickly, this part of the HA changes rap-idly, hence the need for differ-ent vaccines every flu season.”

Schrader’s research team discovered that the H1n1 vaccine was capable of fight-ing different variants of the flu virus because it attacked the HA’s stem, neutralizing the flu virus.

The researchers concluded that a vaccine based on a mix-ture of influenza viruses not circulating in humans, but in animals should induce broadly protective antibodies in the human body that could better protect against rapidly evolv-ing flu viruses. This could potentially make influenza pandemics and seasonal influ-enza a thing of the past.

Paul Lucas New President of Life Sciences Ontario

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News

Big Pharma and Biotech Taking on Rare Diseases

Rare and niche diseases such as Duchenne muscu-lar dystrophy, Gaucher disease, Philadelphia

chromosome negative, acute lymphocytic leukemia, Fabry disease, and idiopathic pulmonary fibrosis, are on the radar for Big Pharma and biotechs.

According to a new report released by GlobalData, pharmaceutical and biotechnology companies are increasingly taking on rare and niche diseases in the hope of developing initial treatments or improving upon existing therapies for these conditions. They are also increasingly focusing on developing products for these diseases as a means of reinvigorating their prod-uct pipelines. The market for these products is wide open and will continue to be a major driving force in the industry.

The FDA already approved a product by Protalix/Pfizer called elelyso for Gaucher disease, which affects about 6,000 people in the united States. As an orphan drug, the product has no competition from any other product up to seven years. elelyso provides patients with an alternative, lower-priced enzyme replacement therapy option to Genzyme’s Cerezyme and Shire’s Vpriv.

The $19 million collaboration between Lawrence Tanenbaum,

the Ontario government and the Centre for Addiction and Mental Health (CAMH) to establish The Tanenbaum Centre for Pharmacogenetics at CAMH will accelerate gene-based personal-ized medicine in psychiatry.

The centre will support the research in the DNA laboratory of Dr. Jim Kennedy and the clinic of Dr. Daniel Mueller, which hopes to accelerate the time it takes to get genetic information to physicians and patients across Ontario. Kennedy’s lab identified a new genetic risk factor for serious weight gain, a side effect for 40 per cent of schizophrenia patients who receive a commonly used group of anti-psychotic drugs. If doctors could know in advance which individuals carry this genetic risk it would help them know when to prescribe different drugs.

“If we could prevent serious side effects such as movement dis-

orders, sleep disturbance and increased risk of cardiovascular disease, I truly believe more people in need would stay on their medica-tion and derive the long-term ben-efits of better mental health, living longer more productive and fuller lives with their families,” says Kennedy.

Pharmacogenetics aims to help doctors understand in advance which individuals carry a genetic risk for serious side effects from specific drugs. Genetic testing also helps doctors determine which patients are more likely to respond to a medication and if dose adjust-ments need to be considered.

Along with establishing the cen-tre, the investment will move other genetic tests into medical practice through “lab-on-a-chip” technology currently in development. The bio-technology development initiative within this program will create an increasing number of knowledge-based jobs in Ontario as the core genetics research expands.

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Brazil may be best known for its football fans, bikini-clad babes and white, sandy beaches, but right now it’s not Ronaldo burning up the headlines. Brazil’s growing

economy and growing biotech sector are attracting attention and investment by foreigners interested in tapping into Brazil’s lush human and agricultural resources. From 2000 to 2010, Brazil’s investment in science and technology grew from $15 billion reais (about $30 billion CDn) to $60 billion reais in 2010 (nearly $120 billion CDn by today’s exchange rate). And although Brazil’s GDP only grew 2.7 per cent in 2011 compared to 7.5 per cent in 2010, the country’s economic slowdown hasn’t phased Canadian leaders. The Canadian government recently put an emphasis on Brazilian collaboration.

Building bridges with BrazilIn April, Governor General David Johnston led a group of 30 university presidents to Brazil to promote the benefits of Canadian education. In the same month, Mitacs, a Canadian non-profit research organization that partners with companies, governments and academia to develop human resources, announced a $6.75 million (CAD) partnership between Canadian and Brazilian universities. The Brazilian govern-ment’s Science Without Borders program, the Government of Canada, Canada’s provinces and several Canadian universities co-funded the partnership. Between 2012 and 2014, 450 Brazilian undergraduate students will come to study at Canadian universities via Mitacs’ Globalink program. Ten Canadian uni-versities also signed a partnership with the Sao Paulo Research

Foundation worth $1.18 million. “I think more and more people recognize that science is an

international process where different people with different back-grounds can contribute and try to solve problems together,” says Brazilian scientist Dr. Marco Prado, now at Robarts Research Institute and a teacher at Western university. “We hear this all the time, but I think people have actually studied this and seen that multinational teams with different backgrounds are very effective at solving problems because different cultures have different ways to approach problems,” says Prado.

The majority of Brazil’s biotech companies are micro- to small-sized, and many employees have a high level of education. Approximately 40 per cent of those working at companies with one to five employees have PhDs, while 25 per cent have MScs. Companies with 21 to 50 employees also have a high percentage of employees with PhDs—12.5 per cent. “There’s been huge investment in Brazil for training of personnel. The Brazilian gov-ernment recognized the need to drastically increase the number of scientists in Brazil and the number of scientists with interna-tional connections,” says Prado.

The Science Without Borders program launched in 2011 and will send about 100,000 students from undergrads to post docs to academic institutions in different countries. Prado explains that Brazil’s countries of choice are those where they have an existing R&D connection, such as the united States, england, France and Germany. Canada is up there, as well, says Prado, but the question is can Canada increase its position? “We have this really great university system, a number of outstanding universities in terms

Bio in BrazilBrazil’s presence as a global life science leader is accelerating

By Julia Teeluck

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Regional Profile

of science and technology, we have huge resources now that have been placed in terms of infrastructure as well, so it would make sense that we would be seen as an important partner to Brazil,” says Prado.

Areas of opportunityBack in the ’30s, Brazil’s abundant sugarcane crops led the gov-ernment to encourage and invest in the conversion of sugarcane to ethanol. Fast-forward to the 21st century and Brazil is a world leader in biofuel holding on to about 50 per cent of the global sugar trade. “A lot of the energy in Brazil is renewed energy,” says Prado. “The alcohol is [made] through sugar cane, which is much more efficient than corn used in the united States.” A majority of the sugarcane ethanol plants are located in the northern part of Sao Paulo state. In a 2011 study, the Brazilian Association of Biotechnology estimated there were 237 biotech companies in the country. About 5.1 per cent work in bioenergy, and 9.7 per cent in agriculture. About 70 per cent of agriculture-focused companies are clustered within Sao Paulo and Minas Gerais states. In fact, Brazil’s hotbed for biotech resides in the southeast region. eighteen per cent of Brazilian biotech companies are based in São Paulo city and 13 per cent are based in Belo Horizonte in Minas Gerais.

Besides bountiful sugarcane crops, Brazil’s other advantage is

its biodiversity. “They have the Amazon forest, and they have a huge amount of plants and animals,” says Prado. The Amazon is about two-thirds the size of the united States, most of which is contained within Brazil. Prado notes that researchers are explor-ing Amazonian plant extracts for use in creams and cosmetics.

“There’s [an emergence] of the biotech industry in Brazil try-ing to explore some of those natural resources to develop new medications and new drugs.” For example, when Prado lived and worked in Brazil, he deposited three patents, two of which protect the use of toxins extracted from spider venom to control pain.

Brazil’s people are as diverse as its plant and animal species. european, African, Asian and Amerindian cultures make up the population, which nears 200 million. The diverse and large population makes the country an attractive place for clinical tri-als. Dr. Halla Thorsteinsdóttir, an associate professor at the Dalla Lana School of Public Health at the university of Toronto noted than Brazil can conduct clinical trials relatively cost-effectively. “There’s a large population in Brazil and it has a very fairly advanced regulatory system,” says Thorsteinsdóttir, who authored a study examining Canada and Brazil’s collaboration in health biotechnology.

Pedro Schildknecht, Business Director, BD Biosciences, Canada, says there is also opportunity for Canadian biotechs in human health.“Most of the opportunity is going to lie in the production of medical and hospital equipment and diagnostic tools,” says Schildknecht. In particular, there’s an opportunity for biotechs that develop hospital and medical diagnostic tools to treat tropical disease.

Before you goSchildknecht identifies three points for Canadian biotechs to keep in mind when looking to do business with Brazil.

The first is the length of process approval. “There’s a huge backlog on the IP approvals in Brazil,” says Schildknecht. Companies with a finding or that want to file an IP will have to wait awhile. “That’s a risk,” he says.

Second, Brazilian regulations are strict—you can’t patent any-thing you like. “For example, you cannot patent nucleotide or a peptide sequences if they’re isolated from natural living organ-isms. So, if you have a plant extract or if you find a natural mol-ecule, you cannot patent this kind of molecule,” says Schildknecht.

Finally, Schildknecht points out access to Brazil’s biodiversity can be a problem. “When they think about Brazil, everyone thinks about the biodiversity and the Amazon and everything that is available there, but getting access to that biodiversity is not that easy. In order to get access to the biodiversity, a company would need to get an approval from a government agency, and this can take awhile.”

Brazil’s investment in its science and technology industry begins at the education level. Many biotech companies are born from discoveries made in academic institutions. The country’s focus on international partnerships with universities is a smart strategy to make it a leader in biotech. BB

Brazil by the numbersPrivate sector concentration by state:

Sao Paulo 40.5%Minas Gerais 24.5%Rio de Janeiro 13.1%Rio Grande do Sul 8%

Areas of focus

Source: Brazilian Association of Biotechnology

Human health 39.7%

Animal health 14.3%

Reagents 13.1%

Agriculture 9.7%

Environment 9.7%

Other 8.4%

Bioenergy 5.1%

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Recently, the Canadian Federal Court of Appeal (FCA) has issued a number of decisions that turned on the issue of sound prediction. These decisions have resulted

in two divergent streams of cases. In one stream, the Court is invalidating patents in a manner that appears to change the law; while in the second stream, the Court is maintaining validity in a manner consistent with the previous law.

These two streams of case law create uncertainty in industry when it comes to predicting the outcome of validity proceed-ings in Canada. Furthermore, the stream of cases invalidating patents is requiring disclosure elements that are not found in the Patent Act, and were not part of the jurisprudence when these patents were filed.

Factual basis for predictionsIn Strattera, the patent claimed the use of the drug to treat attention-deficit/hyperactivity disorder. Trial Judge held that the patent promised that atomoxetine would be an effective treatment for ADHD, and furthermore, as ADHD was a chronic disease, the clinical effectiveness must be sustained. The FCA upheld this finding. The Trial Judge concluded that Lilly did not have enough evidence when the patent was filed to establish that atomoxetine would meet this promise of the patent. A promising clinical trial had been conducted, but the Trial Judge held that was insufficient to demonstrate utility. Thus, the Court went on to consider sound prediction.

For sound prediction the test requires that there be a factual basis for the prediction, and a sound line of reasoning leading from the factual basis to the prediction. Furthermore, both of these must be disclosed in the patent. In this case, the clinical trial was not mentioned in the patent. Thus, the Court held that Lilly had not met the disclosure requirements for a sound pre-diction. Furthermore, the FCA held: “Indeed, if disclosure in the patent of the factual basis of the prediction of utility was not required for sound prediction, it would be difficult to see what Lilly could be said to have given to the public, in exchange for the grant of the monopoly, that it did not already have.”

Invalidated PatentsChanges to case law creates uncertainty for biotechs. Just how sound do a patent’s predictions need to be?

By Jamie Mills and Beverly Moore

Thus, the Court held that Lilly had not met the disclosure requirements and the patent was invalidated for a lack of sound prediction of utility, not because it did not actually work.

In Latanoprost, the claims at issue were therapeutic compo-sitions, compound claims and use claims. In particular, the therapeutic composition claim also referred to the composition containing sufficient amount of the drug to reduce intraocular pressure without causing substantial ocular irritation. However, the compound and use claims did not make this promise.

These claims had been construed in a previous case and the Application Judge held that the promised utility was “the treat-ment of glaucoma or ocular hypertension without substantial ocular irritation”. The Application Judge found that utility had


Predicting Success

been demonstrated and thus, sound prediction was not an issue. The FCA upheld this finding and did not substantially address the Appellant’s submission on sound prediction because utility was demonstrated. However, the FCA also held that the inven-tion was soundly predicted.

Invalidated patentsIn the second Latanoprost case, the allegation was that the pat-ent promised chronic use of the compound for treatment of glaucoma. The Application Judge con-strued the patent in the same manner as she had in the first case. However, this time on appeal, the FCA agreed with the challenger. Thus, the FCA held that the patent had to rely on a sound prediction for utility as the inventors had only con-ducted single-dose studies in healthy humans. These single-dose studies were held not to constitute the basis for a sound prediction. Furthermore, the FCA held that there was no sound line of rea-soning to bridge the gap between the factual basis and the promise of the pat-ent. Thus, the patent was invalidated for a lack of sound predic-tion of utility.

However, in the other stream of cases, opposite findings were made on what seem to be similar types of claims and patent statements. In Mylan v. Pfizer, the claims at issue were com-pound claims and therapeutic composition claims for treating senile dementia.

The Applications Judge found the promise of the patent to be a new class of compounds effective in the treatment of Alzheimer’s, having regard to the cholinergic function theory of AChe inhibition. Furthermore the Judge held that although testing in humans had not happened, there was a sound predic-tion of utility and that prediction was properly disclosed in the patent. The Judge dismissed Mylan’s argument that the patent promised donepezil would have better toxicity and longer action than the prior art compounds.

on appeal, the FCA upheld the decision. In particular, the

Court held that “the purpose of seeking a construction of the claims which is reasonable and fair for both the patentee and the public.” It “does not permit an unescorted and unchap-eroned romp through the disclosure”.

In a second Mylan case, the patent claims at issue were com-pound claims and composition claims. There were also claims to the use of the drug as an inhibitor of the enzyme aromatase. Furthermore, the patent disclosure stated: “It is a particular object of the present invention to provide aromatase inhibitory

compounds with fewer undesirable side effects than [AG].”

Divergent streamsMylan argued that this was a promise of fewer undesirable side effects. However the Application Judge found that no such prom-ise was made. The FCA upheld this con-struction. In particular, the claims did not refer to the compound having any fewer side effects than the prior art. The FCA held that Mylan’s “microscopic approach to the construction of the provisions of a patent is misguided. The fact that such an ordinary

word as “provide” is used in sentences containing the claims of the patent does not mean that when used in other sentences, it should be construed as connoting a promise of the patent.” When the patent is examined as a whole, the object clause con-tains no more than a forward looking aim of the invention.

As can be seen from the two divergent streams of cases, there has not been a lot of consistency in the decisions coming from the FCA. Thus, there needs to be some movement in the case law. on a positive note, the two most recent cases from the FCA on this issue did uphold the patents against sound prediction challenges. Hopefully, this is a sign of the future. BB

Jamie Mills is a partner and Beverly Moore is an associate at Borden Ladner Gervais LLP (BLG), specializing in intellectual property law. Jamie can be reached at 613.369.4782 or [email protected]. Beverly can be reached at 613.369.4784 or [email protected]. For sources referred in this article, contact [email protected].

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dr. randy Mcintosh, Vice-President of research at the Baycrest Centre, is leading a project to build a virtual brain.


Brain Research

By Julia Teeluck with contributions from Robert Price

Greater industry presence, more collaboration and international efforts hope to accelerate brain research and move products to patients more quickly

On a cool, rainy, April morning, scientists, researchers, industry partners and curious minds from around the world gathered at the MaRS Discovery District in

Toronto to discuss how to bring mental health research to patients. The gloomy condition outside didn’t dampen the spirits of those inside, nor did the fact that billions of dollars have gone into mental health research without yet providing truly breakthrough treatments. on the contrary, a sense of promise and excitement flowed through the conference room, and audience members applauded when the speakers called for industry participation and nationwide collaboration to counter the lack of progress.

The Graham Boeckh Foundation hosted the event (boldly named “The next Frontier in Mental Health: From Research to Patients”) to continue the conversation about how to get the best results from researchers—an imperative as the world’s population ages. The World Health organization predicts the number of Alzheimer’s cases worldwide will double to 65.7 mil-lion by 2030 and more than triple to 115.4 million by 2050. In Canada, 1.1 million people will suffer from some form of dementia over the next 25 years—more than the population of nova Scotia—and cost the national economy $153 billion a year. “unless we find a cure for Alzheimer’s, everything else will seem trivial,” said Husseini K. Manji, Global Therapeutic Area Head, neuroscience Research & Development at Johnson & Johnson Pharmaceuticals Group.

Although statistics like these are scary, Manji says the oppor-tunities opening up to brain science researchers are creating “A

Golden Age for neuroscience.” Advances in technology and a shift toward mental health awareness have put mental health on the public radar.

“even though we have effective treatments for a wide range of psychiatric disorders, they’re not as effective as people need,” says David Goldbloom, Senior Medical Advisor at the Centre for Addiction and Mental Health in Toronto. “There are no treatments on the biological side that have been developed in the last 20 years that are notably superior to the treatments we had before that.”

For example, we have new anti-depressant medications, but no evidence to show that they’re better than what was around in the 1950s and 1960s. Since the World Health organization predicts that by 2020 depression will be the second leading cause of illness and disability after heart disease, there’s a strong demand for treat-ments that work better than what’s available on today’s market.

“We’re looking at what works and what doesn’t work in terms of how research is played out,” says Graham Boeckh Foundation founder Tony Boeckh. “Hopefully we’ll get sufficient evidence that will inform funders how they may change the type of research that they fund to get better results.”

URgeNt INteRNAtIoNAlISMWhen Shimon Peres came to Toronto in May, he drew a crowd. not just because he’s the President of Israel and a nobel Laureate. The crowd came to hear his views on brain research, and he came to hear some of ontario’s leading brain researchers speak about the progress they’re making in understanding the brain.

A golDeN Age FoR NeURoSCIeNCe


ShimON PereS ON hiStOry ANd the fUtUreThe following are remarks made by Israeli President Shimon Peres in Toronto on Wednesday, May 9.

Neither is the economy controlled, nor is security controlled.

What can we do? Who is going to come and control them? And, by the way, respect for government is going down. People feel gov-ernment can rule, but they cannot solve our problems.

We have to ask ourselves, what is the alternative? And I don’t see any alternative but to turn to the most brilliant instru-ment that we possess, that guides us, that we keep on our shoulders, but we don’t have the slightest idea of how it functions.

The brain is so brilliant that we can create artificial brains, but we are so ignorant that we cannot understand our own brain. So we know what is happening around us without knowing what is in us. And unless we know, we shall be victims of different people—vicious, crazy—and by the unexpected. We have to try to understand this machine, or this mechanism, or maybe this spirit.

When did civilization begin? When the mirror was

introduced. Until then, people didn’t tend to their hair, didn’t cut their nails. Give them a mirror, everybody [cares for themselves]. Would we have a mirror for our internal pro-cesses? I’m sure people would like to be washed every morn-ing and to be happy and to be positive. Why should we be crazy? Why should be vicious? Why should we kill each other? And that put the brain on our top agenda.

The brain is one of the greatest secrets of our life. The world in the future belongs to the smallness, not to the great-

ness, namely, how to extract maximum from minimum. I’ll give you a simple example. The first computer we had you could hardly put in this room and it cost tens of millions of dollars. Now this huge and expensive computer is being replaced by a smartphone, which doesn’t require much material, no energy, and is more powerful than the first computers in many ways. The greatest instrument that can extract much from less is the human brain.

Let me give you another example of energy. IBM want-

ed to create an artificial brain the size of a mouse. A mouse has in its brain 20 million neu-rons. In order to have a com-puter that can have the capac-ities of the brain of a mouse, they need three thousand watts of electricity to operate the computer. They cannot use more because otherwise it could burn down; it’s too much energy. The human brain is 5,000 times stronger than the brain of the mouse. Imagine! And do you know how much energy we need to operate our fantastic brain. 20 watts. If you can operate with 20 watts a computer that is 5,000 times more capable than the brain of a mouse, it means we don’t know how to use electricity. We waste.

The idea that the world is tired and overpopulated and we don’t have enough resourc-es is nonsense. We don’t know how to use the resources we have. The future is in minimiz-ing the size and maximizing the pleasure.

We started with the brain and I don’t know how long it will take [to produce results]. I think in the coming decade we should see a totally different world. We know it won’t hap-pen after 10 years—it’s hap-pening every day. Every day we discover more and more and we change. Israel has started and we have many instruments in the domain of medicine, security, which are based on the philosophy, the composition and the strategies of the brain. And that’s not the end of the story. From left: dr. rafi Gidron, Founder of israel Brain technologies; dr. randy Mcintosh, Vice

President of research at Baycrest; Shimon Peres; dr. Peter Carlen, toronto Western research institute; and John Soloninka, President and CEo of the Health technology Exchange.

President of israel, Shimon Peres, shakes hands with ontario’s Premier, dalton McGuinty.

Brain Research


Brain Research

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Peres participated in a panel discussion on brain research that featured some of ontario’s top brain researchers—an example of the importance Israel has for the brain science research partner-ship developing between Israel and ontario. In 2005, the two parties signed a memorandum of understanding to develop collaborative research, development projects and strategic partnerships.

A focus of these joint projects is brain science. ontario is a leading centre for neuroscience research, with 500 neuroscientists working in ontario, publishing the majority of Canadian neuro-science research papers and elevating Canada to its position as one of the top five most productive countries in neuroscience research. Israel, too, has a productive brain research regime, with more than 4,000 publications in neuroscience written by Israel’s researchers.

If there’s a one word panelists used most often to describe Israel’s research efforts, it’s “urgent.” Israeli scientists seem to have a greater sense of urgency when it comes to commercial-izing ideas, whether it’s new technology to wring more water from the desert or new medical instruments to improve diagno-ses of brain injuries.

This urgency is exactly what Canadian scientists need to learn from Israel, says John Soloninka, President and Ceo of the Health Technology exchange. “There is a great sense of pragma-tism [in Israel] and they value outcome. And, although we have

individuals of that nature [in Canada], as a society, we value more the station that you hold, the position that you’re in, and the papers that you’re publishing, rather than actually getting the thing to market or asking, did we sell it to anyone? It’s a different mindset that’s driving people.”

Why Israel has such a practical mindset when it comes to bio business might have to do with the influence of the military on the culture—a similarity Soloninka sees reflected in the success of life sciences that grew up in Palo Alto, California. or it may be a product of greater support mechanisms—namely venture capi-tal—available to biotechs in Israel and California. “We don’t have enough support here, and that’s what we’re trying to engineer,” says Soloninka of efforts like the Israel-ontario partnership.

no doubt, urgency in brain research is important, given the enormous costs of brain diseases and disorders—which already have an economic impact in ontario of $39 billion annually, a number certain to grow as boomers enter their later years. But along with a sense of urgency is a sense of optimism. That’s because even modest improvements can have significant effects on patients. William Reichman, President and Ceo of Baycrest, explains: “Do you know, if we could only delay the onset of a dis-ease like Alzheimer’s by five years through our efforts, it is believed the prevalence of the disease would be reduced by 50 per cent? If we could delay the onset of Alzheimer’s disease by 10 years, it is


broadly believed that would essentially eradicate the disease.”

BUIlDINg A MARketCirculate the room at events like the mental health conference and a consensus quickly develops: brain research is new and pro-gressing rapidly, it’s vital to human health, and it needs to be commercialized. With the global market for central nervous sys-tem diagnostics and therapeutics estimated at $130 billion and growing by 10 per cent per year, the business case is fairly easy to make. Getting academic researchers not to shun bio business has, historically, been a hamstring. This is less often the case today as it was two decades ago.

one of the ways brain research differs from earlier attempts to commercialize research is a desire among the researchers to bring business into the process earlier. By partnering with business early in the process, the researchers will have a better chance of realizing the market potential of research. John McIntosh, Vice-President of Research at Baycrest Hospital, says this market orientation is one of the key differences between Israeli biotech and north American biotech. “That’s the difference between Canada for sure and north America in general—by the time you reach the busi-ness person they go, ‘what were you thinking when you were try-ing to do that?’ Whereas in Israel they’re much more proactive with getting in there very early.”

Such a change in mentality can help the research process, too, by forcing researchers to think about the larger goals of the research—namely translating that raw knowledge into a therapy. “It may not be commercialization per se that’s the goal, but actu-ally designing what you’re doing to be easy to translate so it has impact,” says McIntosh. “It’s almost as if the scientist becomes an engineer, because engineers are quite good at solving problems. So how do I solve that problem now, [researchers ask]? And then you modify that solution as it goes forward.”

Soloninka, who specializes in commercializing health tech-nologies, argues that a change in mindset has to happen inside Canada’s universities if patients are to see new therapeutics come online more quickly than at present. That means rewarding researchers for translating knowledge into practical applications. “An anecdote I often tell is if you had two folks going for tenure, one with X number of first author papers and another with half that number of papers but $50 million in market cap on three start-up companies they’ve done, the first person would get ten-ure. We have to change that culture.”

Is the change happening? Jeffrey Coull, Director of operations at the ontario Brain Institute, says it is. “I think it is an emerging paradigm,” he says. “I think that the attitude of researchers has changed and they’re more open these days to working with industry.”

BRAIN BUSINeSSThe ontario Brain Institute plans to bring its collaborative research approach one step further with a database called Brain-CoDe (Centre for ontario Data exploration). The High

Performance Computing Virtual Laboratory at Queen’s univer-sity will manage the data. once ready, the database will act like an Internet search engine and allow researchers to upload and review patient data to find patterns and trends. For now, the database will be province-wide, but there are plans to take it nationwide and eventually worldwide. “The vision for the future is to take this database and to link it with similar databases all around the world,” says Coull. For example, one day they could form a rela-tionship with the Alzheimer’s Disease neuroimaging Initiative in the united States so they could access their data, and the Initiative could access theirs in return.

“We’re a small country. We have small studies. We can only do so much. But once you start to aggregate data and you form link-ages with all these other systems, you’ve got such a huge amount of data that you can run these very powerful analyses and find things that maybe slipped through the cracks before,” says Coull.

Just as international agreements and projects, as well as industry collaborations and broadly based research teams hope to create a critical mass for the brain science research industry, so too does the database hope to leverage size to produce results. “Having access to thousands of patients that are all defined in the same way would allow us to do analyses that have never before been possible just because we don’t have those sheer vol-umes of patients,” says Coull.

tHe FINAl FRoNtIeR“The brain is our final frontier in terms of understanding,” says Goldbloom. More than any other organ, he says, the brain defines our individuality, regulates our mental health and, when it fails, results in mental illness. This is why the Brain-CoDe will be a valuable resource for researchers once up and running. Advances in technology also promote better understanding about brain function. “With the advent of newer technologies and imaging, for instance, we’re able to understand at a level different than in the past not simply the structure of the human brain, but also the function. And so the techniques like positron emission tomography or functional magnetic resonance imaging open windows into the functioning of the human brain in health and in disease,” says Goldbloom.

Goldbloom identifies one of the next challenges as merging the understanding that comes from imaging with understanding that comes from other areas such as neurochemistry or genetics. Again, another reason for the advocacy for collaboration across disciplines, institutions and provinces. The Canadian Institutes of Health Research partnered with Genome Canada to further research in personalized medicine; $12.5 million will go to genet-ics and epigenetics research for mental health.

The landscape right now looks promising with mental health as the next frontier and the brain as our final. The paradigm shift to bring industry in from the start will create opportunities for biotech to develop treatments that work. They have prepped the soil and planted the seeds. We just have to wait for some-thing to grow. BB

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In science fiction-horror films, pandemics kill millions before the chin-scratching scientists

have figured out what they’re dealing with. By then, if one of them hasn’t caught the deadly illness (and made a teary, deathbed farewell speech), the civilian authority is so understaffed and confused that help has to arrive by helicopter.

To subdue a fast-moving pan-demic, governments need fast moving scientists and labs and manufacturing facilities able to churn out vaccines targeted to the deadly viruses. Speedy delivery of vaccines is exactly the business of Medicago, a Quebec-based biotech with manufacturing facilities in Quebec and north Carolina.

As Canadian biotechs go, Medicago is a success. If a pan-demic ever strikes, and panicked politicians need a fast solution and faster vaccines, Medicago could fill the role of one of the heroes.

Vaccines from plantsMedicago is a star on the Canadian biotech stage. Whether celebrity goes to good management of the business or savvy deployment of the company’s proprietary tech-nologies depends on whom you ask—but most people will say Medicago is a star. And anybody with an inkling for vaccine science will say Medicago’s method for producing vaccines is cool—as cool as any Hollywood charmer.

By Robert Price

Vaccine gardensMedicago’s growth is steady in a field of science known for surprises

(1-5) Medicago’s North Carolina facility produces vaccines from tobacco leaves. (6) régis labeaume, Mayor of Quebec City; andy Sheldon, President and CEo, Medicago; Sam Hamad, Minister MdEiE; and Max Fehlmann, President and CEo, CQdM. (7) a tobacco plant in Medicago’s lab.

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Where traditional vaccines produc-tion uses eggs to produce vaccines, Medicago’s technology uses tobacco plants as a factory for producing vaccines. When the company is called to produce a vaccine, it first synthesizes genes for the specific flu strain—like a mutant strain of the bird flu—and then transfers these genes into the cells of a tobacco plant. The plant then grows what the company calls virus like particles, or VLPs, a pro-tein that looks like a virus but doesn’t act like a virus. VLPs lack the flu’s genetic material, making the VLP non-infec-tious and unable to replicate. But because they look like a virus, the body’s immune system develops defenses against the particular strain of flu without having to fight the flu. After six days inside the plant, the VLPs can be harvested and manufactured into a vaccine.

one of the key benefits of cultivating vaccines inside plants is the speed of manufacturing. In just 14 days from beginning to end, VLPs can be processed into vaccines, compared to a turnaround of six months if the vaccines are gener-ated from eggs. The difference is enor-mous when considering that a pandemic flu can spread over the globe in less than six months.

And there are other benefits to using plants, explains Medicago’s President and Ceo Andy Sheldon. “The beauty is that a plant-made system, which is a living system, in our case a living tobacco plant, can produce very complex molecules. So we’re able to do things which haven’t probably been done before which allow us to look at some very interesting targets.” These targets include a variety of viruses and flus but also other molecules that society needs—almost anything that’s a protein based, like enzymes needed to cre-ate biofuels, monoclonal antibodies for front line health care, or biosimilars for biopharmaceuticalmanufacturing.“Anything that is protein we have a shot at pro-ducing it,” says Sheldon.

growing the businessIn a sector where many businesses fail a clinical trial and fold, or run out of fund-

Business Success

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Vaccine gardensing before making it to market, Medicago has been a case study in how a business can grow by setting and meeting mile-stones, moving quickly and having a product the market wants. Sheldon says the company’s success is having the right timing. “The timing is now—this is when the growth is in the market. I think from all ends we’re in the right place at the right time.”

Calculated investments and a growing customer base help too. earlier this year, the company invested $4 million into its Quebec City pilot production facility, with the intention of accelerating the clinical approvals of its products, includ-ing preclinical testing of a new rabies vac-cine. The investment added 20 new employees to the company’s roster and boosted its presence in the capital region. At the same time, the company has been hustling for business in the u.S., notably with the u.S. Department of Defense. So far, the company has received $19.8 mil-lion of a possible $21 million to show how quickly its manufacturing plants can scale up productions of vaccines. The goal, the company says, is to prove that its 97,000 sq. ft. manufacturing facility in north Carolina can produce vaccines quickly when influenza hits.

Recent discoveries that the bird flu virus can mutate and infect mammals raise the profile of Medicago’s business and the importance of pandemic pre-paredness planning. Sheldon says Medicago has followed the developments in bird flu research “very carefully.”

Along with tracking the possibilities of pandemics, Medicago has in the pipeline a u.S. Phase II a clinical trial for a quad-rivalent seasonal flu vaccine, a Phase I clinical trial for a one-dose H5n1 VLP vaccine, and it is conducting toxicology studies for a rabies vaccine and work-ing with Japanese firm Mitsubishi Tanabe Pharma to develop a vaccine for rotavirus and at least two addition-al vaccine candi-

dates. To find new markets for its tech-nologies, Medicago is researching ways to develop biosimilar products.

Why biotech?Medicago is one Canadian bio business at the top of its game and Sheldon, his peers in the industry say, is at the top of his game too. Sheldon was recently named Ceo of the Year by the World Vaccine Congress, an honour Sheldon says is “very, very pleasant” and a testament to the quality of Medicago’s employees.

A 30-year veteran of the life sciences industry, Sheldon has served as Medicago’s President and Ceo since 2003, following increasingly senior positions at Shire Biologics, Merial Canada, Rhône Mérieux and Smithkline Beecham. From his per-spective, he says, Canada will benefit from taking a more interventionist approach to growing the life sciences industry in Canada. “Canada needs to re-evaluate a little bit its position in terms of assistance to the industry in Canada. I think that would be a timely thing,” he said, adding that, “in the recent budget, the govern-ment seemed to have wanted to get involved more—let’s put it that way—in biotech and we’ll see what form that takes in the coming 12 months.”

Sheldon says he built his career in bio-tech because the science excites him and because biotech has something to offer the world. “At the end, today, we have a wonderful opportunity to really try and contribute, not only to the health of west-ern civilization, but to take a platform like [Medicago’s] and use it in the developing world as well,” he says.

“It’s an attractive thought that you can actually go out there and manufacture things for health that can save lives. It has been a driver in my career.” BB


Business Leadership

Nothing about seeing a competitor kicked out of the mar-ket makes Paul Walker happy.

He’s talking about the removal of Xigris, the only treatment for sepsis shock, from the market. For Walker, a for-mer critical care doctor who now presides over Spectral Diagnostics, the failure of Xigris to prove its efficacy leaves a huge hole in the market.

“For a doctor facing a patient in sepsis shock, there are no new treatments,” he says. “We’re essentially right back to where we started from.”

Focused approachWhere we started from is a tough place. Sepsis is often called blood poisoning but could just as easily be called a mass killer. With a mortality rate of up to 35 per cent, severe sepsis is the leading cause of death in u.S. hospitals, killing more than 250,000 Americans annually—and tens of millions worldwide—more than the deaths caused by breast, colorectal, pancreatic and pros-tate cancer combined. Despite the preva-lence, no single treatment exists.

This is where Walker and his team at Spectral Diagnostics hope to make a dif-ference. They plan to make a difference by approaching the science differently.

Rather than taking a generalist approach to testing, as Big Pharma has done with products like Xigris, Spectral Diagnostics is using a theranostic approach. With a theranostic approach, patients are given an in vitro diagnosis that identifies those people most likely to benefit from a targeted treatment and those most likely to do worse without the treatment. It’s a “per-sonalized medicine” approach that attempts to match the right therapy to the right patient, and it’s an approach Big Pharma hasn’t attempted.

“It’s more likely to succeed, particularly in a disease like sepsis,” says Walker.

Working smarterWalker wrote an article for The Globe and Mail where he argued Canada’s bio businesses need to work smarter. Walker says work-ing smarter means “knowing that the end market is going to have to involve a major pharmaceutical distributor or device distributor, and knowing they need a product that’s proved to be effective.”

Walker has put Spectral Diagnostics onto this “smarter” path. When he arrived, the company wanted to be a full-service com-pany, with expertise in everything from discovery to sales and

manufacturing. “My strategy was to say no, what we can do is clinical development, which we can do well, and provide a product to Big Pharma who can do sales and market-ing well,” he says. now, with its sepsis treat-ment in Phase III of testing, Walker says the company is focused on hitting each milestone as it progresses to its end market.

“The final strategy is to look for a strategic partner. We expect that a powerful strategic partner in the area of sales and marketing for critical care products will be the way this product will be taken to market,” Walker says

of the company’s future. Walker, who in the past worked as chief of surgery and vice-

president and chief operating officer of a hospital, says managing the life of a huge operation like a hospital is nothing like manag-ing a bio business. And even though he had to make critical financial decisions in his previous lives, he still had gaps in his knowledge. So he—a PhD with a CV large enough to fill a library shelf—sent himself to Harvard Business School’s Advance Management Program to learn business thinking.

“This is front-line business and it’s quite different,” he says. “Just like in being a surgeon, you need to spend the time in it.” BB

By Robert Price

Working smarter and having an end goal is key to small bio business success, says President and Ceo of Spectral Diagnostics

My strategy was to say no,

what we can do is clinical

development, which we

can do well, and provide

a product to Big Pharma

who can do sales and

marketing well.

Paul Walker

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