- Toronto’s life sciences sector is attractive to investors because it has strengths in basic life science research, a strong cohort of entrepreneurs and an innovation ecosystem to support their growth.
- The Government of Ontario is very supportive of the life sciences innovation ecosystem in Toronto and they recognize the value of early stage innovation.
- Investments in artificial intelligence and cell therapy have placed Toronto among the most competitive life sciences markets in the world.
Smart investors and companies will reap benefits by investing in Canada’s strengths in cell therapy and gene therapy. This research—and the technologies that derive from it—will be critically important as we develop the next wave of therapies and vaccines for future pandemics.
This interview transcript has been edited for brevity and clarity by the interviewer. This interview and the information contained in this interview are the opinions of the interviewee, and not those of the interviewee’s employer
The Competitiveness of Canada’s Health, Life Sciences and Biotech Industry
I would say that the sector is probably, pre-COVID, stronger than it ever was. I would say the strengths we have is really a strong group of entrepreneurs, and I think what we would also have is an innovation ecosystem that has been built up around it to support those entrepreneurs.
We have always been good at basic science. I think what we have seen in the last five years is innovation infrastructure to help those companies grow and scale, JLABS of course is part of that. I think entrepreneurs are always good at taking risks and now what we have is the infrastructure to help them grow and scale their companies and help them understand what the risks are so that they can mitigate those risks.
“In terms of where we compete with other places, I do not think we have the same scale but the stuff that is good is really good and I think the competition for that technology is a lot less than it is in other places.”
One of our strengths is really a deep knowledge in the basic sciences, so I think we have a strong research community and I think you have to start from there. I think in terms of where we compete with other places, I do not think we have the same scale but the stuff that is good is really good and I think the competition for that technology is a lot less than it is in other places. So I think for the venture capitalist who wants to come to Toronto and find good technologies, they are there, there is less competition. I think the entrepreneurs are very coachable and I think all of that leads to great opportunities for the venture capitalist that wants to come to this ecosystem and really roll up their sleeves and work with these companies.
Canada’s Life Sciences Ecosystem
I think when you look back 10 years ago, you would see the same old characters starting companies, and now I think what you are seeing is a greater diversity of people starting companies. People who have been trained in the system or have gone through academia understanding that commercialization is something that you can and should do. You are also starting to see the second round of people who have started companies in the past who are now coming back and helping or starting a company again.
“Now I think what you are seeing is a greater diversity of people starting companies.”
And so I think you have a more seasoned group of entrepreneurs, you have entrepreneurs who are more risk tolerant, and as I said previously, you have a commercialization infrastructure that can help them grow and scale.
The Impact of Organizations Supporting the Sector’s Development
MaRS Innovation, now Toronto Innovation Acceleration Partners (TIAP), they are the tech transfer office if you will for all of the downtown hospitals and they have done a great job seeding and starting companies and attracting multinational companies—so foreign direct investment (FDI)—into those companies.
MaRS Discovery District has done a job putting the whole hub on the map, so bringing companies, large entities like Johnson & Johnson (J&J), as well as other tech companies to Toronto, and has really fostered this intersection of tech with the life sciences, so MaRS Discovery District has done a great job.
I think when you look at places like FACIT, which have taken very nascent oncology technology and turned those into companies, [they have] been able to attract investment. They have put Toronto on the map and they are doing a great job of starting and seeding those companies.
Why JLABS Chose to Set Up in Toronto, Canada
One of the things we always look at is [our] innovation index that encompasses a number of different facets. But certainly, Toronto sits in the top 15, 10 innovation hubs in the world.
“There is a lot of great science going on in Toronto and really that is what we are capitalizing on.”
So first of all, from a pure innovation perspective, Toronto is on the map. I think what we saw is exactly what I talked about. You have great discovery sciences—the field was ours, there was not a great number of health companies actually exploiting the value that we see in Toronto. There was a great chance for us to come in and catalyze this growth, because we have great discovery science, we have a nascent innovation infrastructure that was being built, [and] we could be part of that. And so, coming in when we did, we were able to really be the first to take advantage of all the things we saw brewing in Toronto. But I think it starts, first of all, with a great life science discovery research ecosystem. There is a lot of great science going on in Toronto and really that is what we are capitalizing on.
JLABS Experience Investing in Canada
Our experience has been fantastic. I think when you look at the commercialization network that I talked about—TIAP, MaRS Discovery District, FACIT—all of these houses have worked collaboratively with us in a fantastic way to find opportunities and help those opportunities grow.
I would say from a government perspective, we were brought here in partnership the Ontario government. That government sees value in what we are doing and has been very supportive of what we have done and continues to be supportive. I think even from a federal perspective, we have introduced our models to the federal government, and they understand and value what we as J&J have done and I think we have changed the conversation around innovation. I think government is starting to understand that multinationals are focusing in innovation both at the early phase and at the late phase, and I think we are starting to be rewarded for that. So I think governments are starting to see the value of innovation across the entire lifecycle and they value that the input we have put in in terms of this early stage component of innovation.
Investments in Life Sciences Innovation & Tech Sector Crossover
I think the investments that have been made in basic research, I think that lays the groundwork for having great innovation. I think government granting agencies over the last 10 years have done a good of investing in cutting edge research and they have been theming it, which I think is important. So again, rather than spreading things like peanut butter, there have been certain themes. So I think the focus on artificial intelligence (AI), the focus on cell and gene therapy has actually created a synergy between those so now we are seeing crossovers between companies that are selling gene therapy that are also using artificial intelligence to accelerate their drug discovery or technology engine commercialization efforts.
“The investments in artificial intelligence and cell therapy really put us at a different level and in competition with some of the bigger markets in the world.”
So I think the investments in artificial intelligence and cell therapy really put us at a different level and in competition with some of the bigger markets in the world. I think what we need to do is sustain that, and so I talked about it a bit—and we at JLABS are focused on it—is how do we help these nascent companies? How do we help them reach the market and be successful? How do we give them the advice they need, the market facing advice? How do we give them risk capital? How do we find the right talent to help these companies? Because that is another issue that we run into. Do we have enough talent here to sustain these companies? That is something I think governments and industry has to really focus on is how do we keep talent here in Canada and help these companies grow?
COVID-19’s Impact on Canada’s Health System and Industry
I think when a crisis hits, the benefit of a one-payer system or a one-payer health system is that they can move quite quickly, and they are focused on the public good. That at the end of the day is what they are responsible for.
So I think the adoption of these technologies has been quite strong in Canada because you have to. And so, I think what we have seen is these health technologies can really make a difference in terms of getting data to patients, getting data to healthcare providers, to give remote monitoring of patients—all of these things now have been adopted by the health system. I think most importantly, the health system now is really under pressure to break down barriers internally and silos internally and really be focused on how do we bring technology into our hospitals? Into our healthcare delivery network? So I think companies that are in those spaces will certainly reap great advantage in the next three to five years.
Investors’ and Governments’ Approach to Canada’s Life Sciences Industry Post-COVID
I think because of COVID-19, you are going to see an increased focused on vaccines and therapies that can prevent the future pandemics. So I think [with] COVID-19, we are going to see solutions in the next 12 to 18 months, but I think this has put people on notice that there is going to be another pandemic. And I think because of our understanding in some of our cell therapy, our gene therapies, that is a strength of the Toronto region, that is a strength of Canada—so those types of technologies at a base level, they are going to be very critically important as we develop the next wave of therapies or vaccines for the next pandemic. So I think that will be a place where smart investors and smart companies will reap some benefit in Canada because we have a real strength in cell therapy and gene therapy.
“I think you are seeing government starting to listen more to the life science community and think about how do we sustain this industry in the longer term through our procurement?”
I think as an ecosystem, we are also seeing government understand that life sciences is something you really need to pay attention [to] and focus on. I think you are seeing government starting to listen more to the life science community and think about how do we sustain this industry in the longer term through our procurement? Changes in how we procure, how do we incorporate innovation into procurement so that we do not get into a situation we were at the start of this pandemic where our supply chains and some of our products are dependent on foreign entities.
I think you are going to see a greater focus from government to want to build a homegrown biotech industry and I think that will benefit all of us.