2016 was certainly an active year for the Canadian biotech ecosystem as several early stage Canadian companies including Northern Biologics, Zymeworks, Highland Therapeutics, Cynapsus and Innovative Targeting Solutions all hit milestones and enjoyed significant growth. Moreover, the federal Venture Capital Action Plan investment dollars
began to flow into the industry through investments by Teralys, Lumira and CTI Lifesciences. And as 2016 came to a close, Versant Ventures and Bayer AG partnered to launch stem cell focused BlueRock Therapeutics. The momentum was carried over into 2017 as Versant closed its $400 million USD healthcare VI fund with Teralys as an LP, and Zymeworks announced more growth with the addition of a new 10,000 square foot lab facility in Vancouver, BC. Commercially, these are all very positive developments which generated considerable buzz at the recent BIOTECanada Investor Summit in Whistler.
From a public policy perspective, the recently released federal Economic Advisory Council on Economic Growth’s report to the Minister of Finance put forward some important conclusions and recommendations in relation to Canada’s biotech sector. Established in March 2016, the Council was mandated to identify policy actions to support the conditions for long-term economic growth.
Importantly, the Report highlighted biotech-heavy sectors, life sciences and agfood, as two of the four “high potential sectors in terms of their economic prospects and their strengths relative to global opportunities.” The Report also provided recommendations on how to move these sectors from just ‘potential’ to ‘commercial reality’, highlighting the importance of developing measures to attract investment capital and talent.
It is anticipated that the upcoming Federal Budget (now expected in early March) and the soon to be released Federal Innovation Agenda will begin the process of putting in place a strategy and corresponding measures to support the development and commercialization of life sciences and ag innovation.
Yet, while the Canadian industry continues to grow and the government’s policy agenda looks to support that growth, macro economic and political events outside Canada stand to re-define the global industry’s operating environment. In particular, the dramatically changed and unpredictable U.S. political landscape is generating more questions than answers at this point. Questions like what will be the impact of a ‘tweaked’ NAFTA, immigration policy, and ‘buy America’ policy approach be for Canada? How will the Trump administration balance the objectives of supporting biotech innovation while simultaneously trying to reduce drug prices? What will the replacement plan for Obamacare look like and how will it impact the pharmaceutical industry?
Depending on the answers, there may be some silver linings for Canada- immigration policies might make it easier to attract and retain top talent and other economic measures and approaches could result in capital migration in our direction.
At a minimum, the shifting sands underscore the importance of Canada ensuring it is globally competitive. The federal Budget and corresponding Innovation Agenda will be important steps towards driving biotech innovation forward. With the right hosting conditions and strategies in place, Canada’s vibrant biotech sector can build on the momentum and success of 2016 to establish itself as a destination of choice for both investors and talent.
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