Canada has a lot to offer, especially in the biotech space. But certain regions dominate in some categories more than others. Prince Edward Island is no exception. It may be a small island lying just off the coast of Nova Scotia and New Brunswick, but when it comes to bio-based human, animal, and fish health technologies, the province punches above its weight.
Biotechnology Focus had the pleasure to speak with the executive director of the PEI BioAlliance, Rory Francis, who discussed in detail how the innovation ecosystem is mapped out in the province to give an informative view on what makes up this powerful dynamic. As an experienced senior executive with over 30 years experience in professional, management, and leadership roles in the private and public sectors, Rory Francis has helped lead transformative change in several programs and services across the province of Prince Edward Island.
MC: Before delving into what is going on in the current innovation ecosystem on Prince Edward Island, could you give us a little bit of background on the PEI BioAlliance and the vision of the organization?
RF: The BioAlliance has been around for almost 14 years now. It was created in 2005 as a private-not-for-profit organization led by the private sector leaders in the community here in Prince Edward Island (PEI). But the DNA of the organization is such that our board includes those private sector leaders, as well as academic and research partners – university, college, National Research Council, Agriculture Canada Research – as well as government partners in federal and provincial agencies, and several organizations involved in finance. So, it really is a cluster model very much like a Michael Porter model partnership among various stakeholders all committed to developing and executing on a single strategy to develop the bioscience cluster in this province. That really hasn’t changed over the last decade in terms of its role. It’s really a private sector led economic development engine focused on the biotech sector in the province.
MC: Have you been with the BioAlliance since inception?
RF: Yes, I have been here since inception. I was asked to help put some structure into what a small group of companies was, but there really was no structure or strategy at that time. That’s what I was asked to assist with. So, it’s really all kinds of leaders from all those partners that came together to think through what our model should be, what the role of the BioAlliance should be within the community, and in particular, what mattered in terms of creating an environment for business. And when I say ‘role’, that’s very important because there are various kinds of clusters in the world and economic development models. So how are we defining success? What does that look like? It is a very important conversation to have early on in any organization. What’s essential is being clear on what success looks like and then setting up some stretch goals and strategies to get there.
MC: What is the scale of the cluster?
RF: We are about 57-58 companies here in Prince Edward Island in the bio sector, with over 1600 employees, $250-million in sales per year, about $80-million in R&D investments each year, and we also track one of our key metrics – follow on capital.
One of our roles is really helping early-stage companies, both those that are born here in the province and early-stage companies from other jurisdictions and countries see the value in being within the cluster here to help them commercialise their technology. That is a very important goal we set out early on; to be good at establishing the conditions for those early-stage, technology-rich, maybe business plan poor companies to increase the probability of them actually getting to the market successfully. That really means focusing on what matters in terms of making that transition and being able to get through that critical path from the technology to a real business. Follow on capital is an important metric because that’s an indication of whether or not we’re actually getting companies to a point where they are attracting private sector investment.
MC: Now, what is the ratio of the companies within the cluster? Do they tend to be heavier on the early-stage side or do you have more mature companies in the region?
RF: Of the 58 companies I mentioned earlier, about half of those would be about pre-revenue. So, they are working through their clinical program. They’re working through their regulatory requirements in order to take a technology to market, but they’re not in the market yet. The other half would be companies that actually have products in the market. That’s a pretty healthy ratio for the bio sector in general.
The other metric that is kind of interesting is that about half the companies within our cluster are born and bred here; the other half are from somewhere else in the world and have chosen to locate here in our backyard as part of the cluster. They feel that it’s strategically important for them to be here versus anywhere else in the world to commercialise their technology. So, that’s a pretty big vote of confidence in the cluster environment, the ecosystem here and what we have established.
Our largest companies are still small by international standards, with $50-100-million a year revenue and up to 300 employees. These include companies like BioVectra, Sekisui, and Elanco. We also have a second tier of companies that have approximately 100 employees at the $20-million mark, all the way down to the really early-stage companies, with one or two scientists trying to commercialize their technology and get the proof of concept work done.
MC: What is the draw then for these companies to relocate to PEI if they were not originally from your backyard?
RF: It’s not so much about moving. We’re not talking about moving companies that already exist in some other jurisdiction in Canada or even in the US and setting up shop in Prince Edward Island, unless it is with a view of accessing Canadian markets or North American markets. In terms of the companies, they are usually early-stage companies. We focus on due diligence, the technology assessment, a hard-nose screening of what kind of opportunities these companies have for success as part of an incubation program that we run.
The strategic reason for being here is usually the technology support – the science and technology underpinning and areas of strength have a lot to do with what companies are here and why. Areas that are being reborn in terms of new development are natural health products, personal health care products, even pharmaceuticals, animal health, animal nutrition. So natural health products – these are extracts from marine and terrestrial sources of bioactives – and that whole area of expertise is something that we really do have here and are probably one of the leaders in the country in that area.
Animal Health and Nutrition is another focus area, with expertise within both the private and public sectors. We have the Atlantic Veterinary College (one of five in North America) located here in Prince Edward Island. Fish health and nutrition is another niche area, and a very fast-growing market in the world (aquaculture). We really own the leading assets in North America when it comes to fish health and nutrition, everything from again businesses who have very strong expertise in vaccine research and development, commercialisation, manufacturing, contract research capacity, that supports the stringent regulatory requirements of putting these products into the marketplace and infrastructure that can support that R&D. So, we have a really sophisticated platform of well-integrated support for companies working in fish health and nutrition.
MC: Going back to the PEI BioAlliance, what is your operating model?
RF: The BioAlliance Inc. is a relatively small organisation – the catalyst for the development of the strategy that the board owns and then facilitating the execution of that strategy through our partnership – which is an absolutely key part of what differentiates us and how we work. It’s this partnership that we’ve established over quite a few years now that involves the business community, the academic and research community, and our government partners that allows us all to row together and focus on the same set of priorities. You can get a lot of things done in terms of overall strategy and how we work with individual companies when we have everyone understanding what matters and working together to find solutions at a cluster level and at the business level.
Collaboration is a word that gets a little kicked around, but I think we’ve got a lot of years now of evidence that if you can establish that kind of an attitude if everyone (whether we’re talking private sector or academia or government agencies) sees that their mandate is more quickly and more readily fulfilled by being part of something bigger than themselves, then everyone is willing to commit resources and time to make things happen.
MC: What would you say is the defining success of the organization?
RF: If we go back to our metrics, we have been pretty aggressive on setting targets for cluster growth. The last full turn of the strategy wheel from 2012-2015, we were able to double private sector revenue, increase job numbers by 50 per cent, and increase access to capital dramatically.
Some other highlights over the last few years would be that we’ve been very competitive, and very successful in national competitions. We established the Emergence Bioscience Business Incubator through success in a national competition and have been running that incubator program as a virtual incubator for almost five years. We have 65 companies that are additional companies outside of what I talked about earlier. About 20 of those are from Prince Edward Island, but the other 45 are from other parts of Canada, the U.S., Europe, Australia, and Israel. It is a very successful incubator program that is not only assisting bio companies across Canada in getting their technologies to market, but we are serving a soft landing program for companies from other countries who are, for example, from Europe, who want access to the North American marketplace and they have a technology that fits with our strengths here in Prince Edward Island. So, our incubator program has been a highlight and I think a very strong element of the cluster ecosystem here.
Natural Products Canada was born here in 2016 winning a national competition, CECR (Centre for Commercialization and Research) program, which was a very big deal. It’s a $25-million over 5-year program. Natural Products Canada now has offices in five provinces and is really an accelerator, supporting companies in the natural product space with equity investment, with connections to other sources of capital. They’re helping companies that are a little beyond the incubator side of things. In fact, we’ve had companies come out of our incubator program and receive capital investment from Natural Products Canada, taking them to the next level. It’s been a very exciting new initiative with its own board, its own structure. But it is really creating a national network of expertise in the natural product space. We’re also part of the Ocean Supercluster, representing the marine bio resources component. There’s a lot going on and many exciting opportunities ahead.