- The growing global population, and the health challenges that come with it, are a massive global future economy opportunity that Canada and our health innovation industry cannot afford to ignore.
- Canadian health sector companies need to find long-term investment as well as skilled talent to succeed globally. The underlying factor supporting both these elements are the policy conditions that make Canada as attractive as possible to investors and top international talent.
- Canada health innovation regulations and policies must keep up with the disruptive technologies being developed in health tech so that we do not lose out on our innovation edge.
Canadian governments already recognize the potential of our health innovation industry and must want to support its growth. Also, the industry must believe in itself and understand where it is going as a collective. There is an enormous global opportunity to develop solutions for the health and sustainability challenges that are emerging out of significant global population growth, and if Canada seizes those opportunities properly, the resulting health innovation industry will be a huge economic asset for our future economy.
How would you describe the current state of Canada’s biotechnology industry and its importance for our future economy?
BIOTECanada’s membership includes 250 companies, which are mostly early stage companies in the biological space. They are developing large and complex molecules that are going to be turned into therapies. Membership also includes other key parts of the ecosystem such as venture capital, contract manufacturing organizations, contract research organizations, universities and multinational pharmaceutical companies. Multinational pharmaceutical companies are looking to early stage biotech companies for partnering opportunities.
The vast majority of our members are local, small Canadian companies that are at various stages of development. They could have anywhere from 1 to 2 employees to over 150 employees, but they are all trying to find the investors and the talent to drive their innovation forward.
“We definitely have the foundation for health innovation in this country; the bigger consideration is what we must do to take it to the final stage and create globally competitive health companies.”
In biotechnology, a company’s core asset is an idea. So, if early stage companies are not able to find investment and talent needed to commercialize in Canada, they can move. If investment and talent are not coming to Canada, we will lose our innovative health ideas to jurisdictions that are more attractive to investment and talent. Clinical trials, research and development and growing a company can be done from anywhere in the world. Ultimately, Canada will be a consumer of the finished product back, but by not supporting those companies’ development here, we will have missed out on all the economic benefits of commercializing health innovations in Canada.
How innovative is Canada’s health sector and what must we strive for beyond innovation as an end in and of itself?
There is no question that we are innovators; Canada has a long history of innovation that dates back to the discoveries of stem cells and insulin. We have world-class universities that generate some of the best new talent as well as new ideas. We have pockets of innovation and expertise in each province across the country, which are innovating for the global marketplace. Canada is one of the leading jurisdictions for conducting clinical trials around the world, and that leads to further innovation and scientific achievements. Canadian science is known around the world for its strength, which is why a lot of investors come to this country. So, we definitely have the foundation for health innovation in this country; the bigger consideration is what we must do to take it to the final stage and create globally competitive health companies.
I think we have been very good at creating a lot of health and biotech companies across the country. However, Canada has not been able to create many anchor health companies that are globally competitive and commercial. For example, Frederick Banting and Charles H. Best discovered insulin in 1921. That discovery was Canadian and is the foundation for Novo Nordisk, which is headquartered in Copenhagen. So, we need to grow our health companies on the global stage but keep them Canadian. We need a complete health ecosystem that generates ideas, which grow into large companies, create more jobs, generate excitement and have a multiplier effect on the economy.
What key inputs does Canada’s health and biotechnology industry need to compete internationally?
There are only two key elements that are going to determine the success of health companies in scaling up and going global. First and foremost, it is access to investments. Companies can have great ideas but commercializing them in the health space takes over ten years. Not only is the timeline long, but the expenses that are incurred along that path are also extraordinary. For example, a regular drug takes 10 to 15 years to develop and costs nearly $1 billion. That is a significant amount of investment capital that has to be parked in a place for a fairly long time. So, you need a unique kind of investor for the health sector; it is not like IT, where the turnaround can be measured in months not years. Since outcomes are far less certain in the health space, it will certainly take a lot longer for investors to recover their capital. In the past two to three years, a lot more Canadian health companies have been able to get capital by attracting foreign investors.
The second element is talent. You need good leadership and a committed team to lead and grow the business. For both talent and investment, you are really competing against the rest of the world. In that regard, a complimentary piece is the policy conditions that are required to make Canada a more attractive jurisdiction to both invest and work in.
“The global population is going to reach 10 billion people in the next decade, so we need to find new ways to grow, manufacture and address the health space’s challenges.”
It is important to always remind ourselves that Canada is not unique – every jurisdiction sees the economic value of having a domestic biotechnology industry to address the challenges associated with a growing population. The global population is going to reach 10 billion people in the next decade, so we need to find new ways to grow, manufacture and address the health space’s challenges.
How can Canada graduate, attract and retain the best global talent for its biotechnology and health sector?
A number of university programs are being developed uniquely to nurture talent for the biotechnology space. McMaster, Waterloo, University of Toronto and McGill are understanding the sector’s needs. One of the unique challenges we face today is that while Canada is home to great scientists and business people, we need to develop the ‘business scientist’. This is a person who could take that molecule, understand the science behind it and then develop a business model that would allow it to commercialize successfully. So, some schools are taking steps to combine their programs that would enable graduates to achieve this. For example, combining the MBA with the science or medical faculty has the potential to create business scientists.
“One of the unique challenges we face today is that while Canada is home to great scientists and business people, we need to develop the ‘business scientist’.”
The government plays a very important role in talent attraction because it sets immigration policy and, quite often, immigrants are important as they can often be very experienced and more mature individuals. This works for start-ups, because they usually need people who have leadership skills and experience. It is not only important to make it easier for a skilled person to move to Canada, but also enable the spouse and family to move as well. It is likely that the spouse is equally educated and needs to find work in Canada. If we are asking somebody to pack up and leave Boston, San Francisco or Texas and take a risk with a company in Toronto, Montreal or Vancouver, they will have fewer options here if the company fails. The more successful our companies are, the lower risk potential immigrants will face.
Are Canada’s policies and regulatory environment conducive to the development of our health tech sector?
Canada has a very good regulatory system, which is viewed globally as rigorous and strong. Having said that, if Canadian regulatory policy cannot keep up with the disruptive technologies being developed in health tech, we could lose out on our innovation edge. It behooves us as a country to make sure that we are as up to speed as possible with the technology from a regulatory standpoint.
“It would be a competitive advantage for us to move into the health data space; we have to think beyond provincial jurisdictions.”
It makes sense to be cautious when it comes to tapping into the huge resource our healthcare data represents. We need to figure out a way to use Canada’s wealth of health data responsibly, because we can use AI and healthcare data to massively improve healthcare outcomes. Canada is an ideal-sized country to try this out; it is not too big, but big enough to show real results. It would be a competitive advantage for us to move into the health data space; we have to think beyond provincial jurisdictions and unfounded privacy fears to succeed.
Ultimately, we need Canadian health companies to be successful. You cannot turn to the government for money to make this happen. Firstly, it takes an enormous amount of money and more importantly, you cannot ask a government to pick winners and losers. Healthcare is one of those industries in which the science is is going to have to stand on its own and we can never tell if something is going to work without first conducting clinical trials. The government could put in place mechanisms that would help companies defend themselves against hostile takeovers or at least afford some companies more runway to get off the ground. Perhaps, it could facilitate the creation of more long-term capital markets that let entrepreneurs own the majority stake in their companies. But mostly, for our health innovation industry to succeed, we need to implement market-based solutions rather than a government-funded one.