Life on MaRs

Life on MaRS Historically, Toronto has been a rich source of basic research that it has struggled to commercialize. That’s about to change. The MaRS "heritage building" was once the Toronto General Hospital's College Wing © 2005 Ben Rahn/A-Frame Inc. During a break from the busy BIO conference in 2000, physician and entrepreneur Calvin Stiller decided to take a walk through Boston with John Evans, a physician and former president of the University of Toronto. Strolling through Kendall Square, Stiller was struck by the collection of biotech companies in such close proximity to the city’s academic institutions. “It occurred to me [that] this is exactly what Toronto is missing,” he says. Ten years later, smack dab in the middle of Toronto’s Discovery District—10 city blocks in the heart of downtown including the University of Toronto, Ryerson University, numerous teaching hospitals, and research institutes—is an eye-catching new building called the MaRS Centre, the result of Stiller’s dream. MaRS is a place—a prominently branded “convergence center”—but also a concept. A public– private partnership, MaRS was founded as a nonprofit corporation in 2000. Its founding mission: to help researchers turn their bright ideas into commercial successes. “The reality is that commercialization is a very tough game,” says Joseph L. Rotman, a MaRS cofounder and current board member. MaRS was designed to level the playing field. In the decade since the idea was born, MaRS has already begun to impact Canadian innovation by connecting science and technology to the worlds of business and finance. The facility is already home to 70 tenants (with a waiting list of more), along with 70 advisors with experience in business to help tenants bring their inventions to market. MaRS also offers courses for people wanting to learn more about commercialization. Plans call for MaRS eventually to double in size in order to provide even more for the science and business communities. “Our mission,” says MaRS CEO Ilse Treurnicht, “is really to build Canada’s next generation of companies.” Liftoff For the last 10 or 12 years, the Canadian government has made serious investments in scientific research. “We’ve built a Canadian foundation for innovation. I think it’s recognized globally that we have good research in Canada,” says Stewart Beck, the Consul General of Canada in San Francisco, and the former Assistant Deputy Minister of International Business Development, Investment, and Innovation. The question everyone is asking now, he says, is: “How do we turn that into something that’s going to be of more economic benefit to the country?” MaRS was one answer to that question. Founding members Stiller and Evans knew that solid research was being done in Ontario. But commercialization of that research took place in towns far outside of Toronto, and often outside the country entirely. “Innovation comes in a situation in which there’s crowding,” Stiller says. From ancient artisans in Italy to modern biotech firms in Boston, he says, advances are born in places where creative, likeminded people are physically close and trading ideas on a regular basis. That crowding was noticeably absent in Toronto. “Once an idea became commercializable, it was bought and taken south to the US, or the company was created and taken to the periphery of Toronto,” he says. Inspired by their trip to Boston, Stiller, Evans, Rotman, and a handful of other prominent Canadian business leaders began to discuss how to bring that “physical and intellectual crowding” to Toronto, Stiller explains. They’d barely begun the conversation when they discovered that the University Health Network (UHN), the University of Toronto’s largest teaching hospital, was selling just over two hectares of land in the center of the Discovery District. The property up for bid included the historic building where University of Toronto researchers Frederick Banting and Charles Best discovered insulin in 1921. The site had “history, character, and location,” Stiller says. It was a perfect home for their embryonic idea. But they had to act fast. To kick things off, Rotman and Stiller each donated $1 million, and then turned to Ontario’s business community for help. In a matter of weeks they convinced 13 more “financial founders” to put up $1 million each. With $15 million in hand, the group had the clout to convince the University of Toronto, the provincial government of Ontario, and the federal government to invest in the cause as well. In a few short months, they had raised $60 million and were purchasing the land from UHN. “We bought the land before we actually had a business plan,” says Stiller. The group referred to the project as MaRS—just a temporary name with a nice ring to it. They intended to rename it as they developed their business plan, but the nickname stuck. They assigned a meaning to the letters—Medical and Related Sciences— and set about turning their big idea into a reality. The Best Address on Earth The MaRS Centre, also called MaRS Discovery District, officially opened in the fall of 2005. It currently consists of three buildings: two new, modern towers linked to the historic brick “heritage building” built in 1911, which was once Toronto General Hospital’s College Wing. Together, the three buildings comprise 65,000 square meters of lab and office space. A second-phase expansion plan is in the works, which will increase the space to 139,000 square meters. Construction is likely to begin later this year, says CEO Treurnicht. The MaRS Centre’s 70 or so current tenants reflect the organization’s mission. They are a mix of public and private research labs, corporations large and small, venture capital firms, business development offices, service providers, and more. The Hospital for Sick Children and UHN house some of their research programs inside MaRS. The Ontario Institute for Cancer Research, a not-for-profit corporation funded by the Ontario government’s Ministry of Research and Innovation, maintains a central core of scientists in the building. “Everybody in the building is connected to the mission,” Treurnicht says. MaRS also offers an incubator that at any given time might house between 25 and 30 budding companies. Already, more than a dozen companies have moved out of the incubator and into “graduation spaces,” either larger labs and offices inside the MaRS building or external spaces leased by MaRS for their early stage tenants. All told, well over 2,000 people come to work at MaRS every day, Treurnicht says. In addition, hundreds of people regularly pass through MaRS to make use of its conference facilities and public spaces, which are booked for everything from social and arts events to independently organized symposia inspired by the TED conferences. “It’s the best address on Earth,” Stiller is fond of saying. Mission to MaRS MaRS has two goals: first, to help Ontario get much better at converting science into products of value to human health and the Canadian economy and second, to help Ontario’s existing highpotential companies to grow bigger, faster. MaRS began with a focus on life sciences and health care, but has expanded to include advanced materials and engineering, information and communication technology, social innovation, and “cleantech”— energy-efficient technologies that improve efficiency while reducing costs and waste. In all of those sectors, commercialization is the number one goal. One of the cornerstones of the strategy for reaching that goal is MaRS’s advisory services program. Some 70 experienced business advisors counsel MaRS clients to help them research the market, develop business plans, secure capital, and take their inventions from the lab to the marketplace. About 50 of those advisors are volunteers, Treurnicht says—all former CEOs, senior executives, and entrepreneurs with proven track records in innovation and commercialization. Education is another important part of the MaRS mission. More than 2,000 students are enrolled in an “Entrepreneurship 101” program that primarily targets graduate students in the sciences. “We deliver weekly classes and take them through an introductory process of commercialization,” Treurnicht says. The MaRS website also offers a wide selection of articles, videos, and workbooks designed to help coach would-be entrepreneurs. “The education programs are hugely attended, beyond my wildest dreams,” says Rotman, who is the chairman of the private investment company Roy-L Capital Corporation. The program’s reach also extends well beyond Toronto’s city limits. “One of the critical features of Canada in the innovation context is that we have such a large geography and very small population,” Treurnicht says. “As Canadians, I think we are…culturally inclined to think of networks.” True to that inclination, MaRS manages a network of “entrepreneurs-inresidence” to advise clients throughout Ontario. These experienced advisors are associated with MaRS, but based outside of Toronto, in cities and towns across the province. “Those entrepreneurs-in-residence come together as a practice to look at the portfolios of high-potential companies across the province” and advise them on how to become—and stay—strong, she says. The MaRS main entrance facing East © 2005 Ben Rahn/A-Frame Inc. A Final Frontier MaRS has also played an instrumental role in bringing together Toronto’s major research institutions in a formal partnership to improve the commercialization of ideas coming from inside their labs. That partnership, called MaRS Innovation, was born from a shared desire to take cutting-edge discoveries to the next level, says Raphael Hofstein, MaRS Innovation’s president and CEO. “MaRS Innovation closes the gap between the world-class scientific research [being done in Toronto] and the basic requirements of industry, which looks to take on mature technologies,” he says. MaRS Innovation has 14 members: three universities (including the University of Toronto), 10 teaching hospitals, and the Ontario Institute for Cancer Research. Despite its name, the group operates independently from MaRS Discovery District and has its own dedicated board of directors drawn from around the world. Under a formal agreement, the member institutions must disclose all new intellectual property to MaRS Innovation. “It is our obligation in return to quickly review the disclosures and decide which ones stand on solid ground from an IP and patents perspective, but will also make sense from a commercialization perspective,” Hofstein says. “Whatever we find to be promising on these two accounts, we take onboard and we’ll start nurturing through patent processing and proof-ofprinciple funding.” Convincing more than a dozen research institutions to hand over their intellectual property for the greater good was itself an impressive task, Hofstein says. But that was just the beginning. “We’ve catalyzed a new model of technology transfer and commercialization of science to create a…platform where the intellectual property from all 14 of those institutions—a billion dollars of research investment—comes into a single storefront,” says Treurnicht, who sits on the board of MaRS Innovation. MaRS Innovation launched in 2008 with a 5-year, $14.95 million grant from the government’s Networks of Centers of Excellence program. The member institutions provide matching contributions. Since getting off the ground in the summer of 2009, Hofstein says, the MaRS Innovation staff has reviewed 200 disclosures. He expects the annual number will be closer to 300 now that the program is fully operational. The program has 3 years remaining in the grant period to really make an impact. Hofstein expects to create 12 to 18 companies in that time, not to mention out-licensing promising technologies that don’t necessarily warrant the creation of a new company. “We represent the mountain of intellectual property that comes out of very ambitious, energetic institutions,” he says. “We have a very clear vision of where we want to be.” Full Speed Ahead From MaRS Innovation to the Province-wide network of entrepreneurs-in-residence to the MaRS Centre itself, the MaRS brand has accomplished a great deal in its short life. “We’re a very young organization,” Treurnicht notes. “We’re now at a stage where you have a sense that the operational engine of MaRS is really humming.” Beck, the government official formerly involved with International Business Development, Investment, and Innovation, says that the process of turning scientific discovery into economic benefit is improving across Canada. MaRS, he notes, is one great example of that improvement. “I think [MaRS] has helped bring more focus to what’s happening within [the life sciences] cluster in Toronto. It’s bringing focus to the importance of commercialization,” he says. "The impacts MaRS has had on research and commercialization in the biotech space cannot be overstated." -Peter Brenders, president and CEO of BIOTECanada John Andrews is the president and head of R&D at NeurAxon, a pain therapeutics company focused on inhibiting neuronal nitric oxide synthase, an enzyme that has a role in sensitizing the nervous system and modulating pain. NeurAxon initially launched in the Ontario town of Mississauga. “When we started, MaRS wasn’t yet open. Then when MaRS did open, it clearly had better facilities than we had or could ever hope to have at the location in Mississauga,” Andrews says. The company promptly moved into the MaRS incubator. “All of our growth has been in the MaRS sphere,” he says. Andrews says that while Toronto is well known for its university resources and its huge intellectual capital, “the space for companies to develop, particularly lab space, is much more limited. MaRS serves a real purpose in having lab space for start-up companies to actually be able to do some work and get themselves to a stage where they can attract some more serious financing.” That space has clearly benefitted NeurAxon. In 4 years, Andrews says, the company has grown from six people to 19, raised more than $50 million in outside capital, and moved out of the incubator into a larger space leased by MaRS. Two of the company’s compounds, which were fully developed in-house, are now in clinical trials, and two other compounds are scheduled to begin trials soon. Together with the MaRS Centre, the company is also co-organizing an international symposium on the process of modulating pain. “We couldn’t have done [all] that if we didn’t have a place to grow up,” Andrews says. Individuals outside of MaRS have also noted the organization’s influence on innovation and commercialization. “I think MaRS has really fulfilled an important need in Ontario, and its role continues to evolve,” says Molly Shoichet, a professor in chemical engineering at the University of Toronto and a member of Canada’s Science and Technology Innovation Council, which advises the Minister of Industry on science and technology issues. “It’s been a volatile couple years in terms of start-ups. I think [MaRS] did fill a void, and now, because it’s there, we see more opportunity.” “Partnerships and support of early stage and emerging life-sciences firms is core to their product discovery, and here MaRS provides the resources and advice that give firms a leg up,” adds Peter Brenders, the president and CEO of BIOTECanada, the Industrial Biotechnology Association of Canada. “The impacts MaRS has on research and commercialization in the biotech space cannot be overstated.” Mission Accomplished The founders of MaRS are also pleased with how their vision has materialized in less than a decade. Ten years ago, MaRS was barely a spark of an idea. Today it’s a place and a concept that is changing Canadian science, Rotman says. “I think it’s transforming the culture to emphasize an acceptance within our academic and government communities of the importance of commercialization. Culturally, I think it has played an exceptional role,” he says. MaRS’s physical presence deserves credit, too, according to Stiller. “When the Premier walks out the front door of the legislature, when the members of parliament walk out the front door of the legislature, they look down University Avenue and the first thing they see is this beautiful development called MaRS,” he says. “This has become, in my view, an important physical reminder, an ambassador, for scientific research and development.” “From the beginning we said if this is incremental in its impact, let’s not do it. Let’s only do it if it’s transformative,” Stiller adds. “I always said Toronto was a sleeping giant.” Now, thanks to MaRS, that giant is stretching its legs. MaRS by the Numbers 2000: Year MaRS Discovery District was founded 2005: Year the MaRS Centre officially opened its doors 65,000: Square meters of the current MaRS Centre 139,000: Projected square meters of the MaRS Centre after “Phase II” construction is completed 70: Number of MaRS Centre tenants 200: Percentage of growth in MaRS client portfolio in 2009 10,000: Number of mentorship hours provided to Advisory Services clients in 2009 1,850: Total number of clients to have worked with MaRS advisors and entrepreneurs- in-residence 400: Number of active MaRS Advisory Services clients as of December 2009 70: Total number of MaRS advisors, both staff and volunteer 66: Percentage of MaRS Centre tenants in the private sector 2,000+: Number of people who come to work in the MaRS Centre each day

Life on MaRs

Life on MaRS

Historically, Toronto has been a rich source of basic research that it has struggled to commercialize. That’s about to change.

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Kirsten Weir

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December 2010

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