Tempted by Biotech in Toronto

Courtesy of Bill Latta After 14 years in North Carolina's Research Triangle Park, Judd Berman decided it was time for a change. As he looked around, says Berman, former director of high-throughput chemistry for GlaxoSmithKline, he was certain he'd end up in San Diego, where he has relatives. But an unexpected invitation from a Toronto biotech startup called Affinium Pharmaceuticals intrigued him. "I fell in love with the people as well as the city itself," Berman explains, a year after relocating to Toronto. "Everyone at Affinium had deep personal commitments to research. And Toronto is pretty dynamic. It's a 'tossed salad' city having many distinct cultural entities. There's so much going on, it's just a terrific place to work and live." Berman is senior vice president for chemistry at Affinium, a drug discovery company spun off from research done at the University of Toronto (UofT) (cf. map-1) and the Ontario Cancer Institute (cf. map-2). "There's a significant amount of raw intellectual firepower here that can be deployed in a commercial vein," says CEO John D. Mendlein. "Toronto has the capacity to become the next big biotech center in North America." Toronto usually doesn't jump to mind as a major biotech hotspot like Boston, Maryland, or the San Francisco Bay area. But Toronto has many of the necessary ingredients, including research facilities, a concentration of biotech and pharmaceutical companies, and significant government support. It also boasts surprising quality-of-life attractions for a city of four million people. It is clean, safe, and offers decent public education. "The critical mass is here, and we expect to see very vigorous growth in biotech over the next five to ten years," Mendlein says. With more than 400 biotechs, Canada ranks second after the United States in the number of biotech companies; it ranks third, following the United States and United Kingdom, in generating biotech revenues, with about $5 billion (Canadian). The Toronto area boasts 40% of Canada's biotech industry. Many of the city's research institutes and companies are clustered downtown near the intersection of University Avenue and College Street. Within walking distance one can find seven research hospitals, including Mount Sinai (cf. map-3) and the Hospital for Sick Children (cf. map-4); more than 30 biotech companies, including Affinium (cf. map-5); and major academic centers such as the UofT and the Ontario Cancer Institute, which is the research arm of Princess Margaret Hospital. COMMERCIAL COMPETENCE Toronto enjoys a reputation for conducting quality academic and institutional research in such traditional areas as cancer and neurological disease, and it has established expertise in emerging fields such as bioinformatics and proteomics. The UofT medical school, one of the oldest and largest in North America, employs more than 700 full- and part-time faculty and 400 postdocs. In addition to its teaching hospitals, the university has 20 biomedical-related departments and research institutes, including the Banting and Best Department of Medical Research, named for two UofT scientists who discovered insulin in 1921. The university tried to commercialize insulin on its own but failed. In 1922, university officials awarded a contract to Eli Lilly and Company of Indianapolis to produce and distribute insulin. By the following year, other companies were manufacturing and selling the life-saving drug worldwide under UofT licenses. "Historically, we've had great science and great leadership in basic research, but the challenge has been to translate this into commercially viable products," says Kelly Holman, managing director of Genesys Capital Partners, a Toronto-based venture capital firm with about $100 million under management. Over the past few years, the federal and provincial governments have increased the sizes and types of biomedical research grants. New initiatives in-clude the $3 billion Ontario Research and Development Challenge Fund, a public-private program to increase the R&D capacity at universities and research institutes over the next 10 years. The provincial government also established the $1 billion Ontario Innovation Trust to upgrade research facilities, equipment, and technology. Researchers were pleased earlier this year when Canadian Institutes of Health Research (CIHR) officials announced plans to increase annual research grants and fellowships by 10% annually to approximately $1 billion in about four years.1 CIHR is roughly equivalent to the US National Institutes of Health. Many complain that CIHR grants are too strictly focused on basic research. "NIH will fund research much farther into the commercial area than Canada will," says George Adams, president of the UofT Innovation Foundation, UofT's commercialization office, which has $15 million invested in 21 university spin-off companies. "We need more applied research granting mechanisms like the United States has, to get basic research at least to the prototype stage," adds Holman. The government has started to listen: CIHR recently created $100,000 Proof of Principle grants to allow researchers to explore the commercialization possibilities of their discoveries. According to a 2002 report by the Ontario BIOCouncil, Toronto is the only biotech cluster of its size in North America that lacks a research park dedicated to medical sciences.2 That will change when the Medical and Related Sciences (MaRS) Discovery District (cf. map-6) project opens its doors at the end of 2004. Developed with support from the federal and provincial governments and the city of Toronto, the 1.3 million- square-feet complex will become a "focal point and convergence center for all the scientific disciplines," says John Cook, president of the MaRS Discovery District. Located next door to UofT, the MaRS Discovery District is expected to create 6,000 new jobs by bringing together facilities for new startups, established mid- to large-size biotechs and pharmas, research labs, and professional and financial support services, all intended to foster research commercialization. "MaRS ... will provide an important nurturing environment for new companies, those at the most critical stages of their development," Cook says. A short drive southwest from downtown, along the shore of Lake Ontario, lies the city of Mississauga, whose Pill Hill section is home to some 70 drug companies, representing more than half of Canada's brand-name pharmaceutical companies and 80% of its generic drug manufacturers. Among Mississauga's largest: AstraZeneca's manufacturing and clinical research facility, GlaxoSmithKline's product development and manufacturing unit, and Hoffmann-LaRoche's pharmaceutical division. Local drug maker Biovail is one of the few pharmas conducting proprietary research. York University, Canada's third largest, is on Toronto's north side. York has developed research strength in biochemistry, proteomics, genomics instrumentation, and biomedical devices. University officials are mulling developing their own minicluster that would link nearby companies, such as mass spectrometer maker MDS Sciex, pharmas such as Aventis Pasteur, and information technology companies such as IBM Canada. This York minicluster would be connected to the MaRS Discovery District and selected hospitals, says Stan Shapson, York's vice president for research and innovation. "Our activities would be complementary to research that would occur in a medical school but [that] fits the profile of industry in this area," he says. Like many other biotech hotspots, Toronto is struggling to attract the additional capital and experienced managers needed to accelerate academic discoveries to market. "There just aren't enough senior management people to lead the emerging and enlarged biotech companies," says Lorne Meikle, president of the Toronto Biotechnology Initiative. COMPENSATION DEMYSTIFIED Recruiting scientists to Toronto is not difficult, company officials say, once the sensitive issue of compensation is addressed. The salary scale for Canadian researchers is far less than that of their US counterparts. Average salaries for senior Canadian researchers fell 5.2% from a year ago, from $64,692 to $61,500 (Canadian), according to The Scientist's 2003 salary survey.3 By contrast, the average senior US re-searcher earns about $100,480 (or $73,351 US). "For companies like ours that are competing on a global level, we try to make sure our compensation is at the same level as everyone we compete with. But we're not there yet," says Mike Moran, chief scientific officer at MDS Proteomics. Courtesy of Richard Pierre BIOTECH BYWAY: at an easy commuting distance from Toronto, a Novex Pharma lab tech prepares solutions in Richmond Hill. Many companies, in-cluding Aventis Pasteur, the vaccine division of Aventis, offer recruiting bonuses and assistance to spouses and children. "Sometimes we have to get creative in making offers," says Aventis Pasteur president Mark Lievonen. "But once here, they love the city. It's fairly easy to retain them once they're here." The compensation picture improves dramatically when cost of living and quality-of-life issues are considered. Food and housing are about 25% less expensive in Canada than in the United States, and free health care coverage is available to all residents. Toronto's public education standards are high, and the city has less crime than most other large North American cities. Another plus for recruitment: Canada's liberal immigration policies allow scientists from the United States and Europe to obtain work permits easily. "Toronto could become the next big biotech center, because all the elements are coming together," says Holman of Genesys Capital. "As we work hard and build success stories, we can build on that momentum." Ted Agres (tedagres@lycos.com) is a freelance writer in Washington, DC. References 1. E. Ungar, "Canadian researchers cheer new funding," The Scientist, www.the-scientist.com/news/20030220/04 2. "Report of the BIOCouncil: Building Ontario's biotechnology corridor," Ottowa, 2002. 3. S. Jaffe, "The state of scientists' salaries," The Scientist, 17[18]:21-5, Sept. 22, 2003. function sendData() { document.frm.pathName.value = location.pathname; result = false if (document.frm.score[0].checked) result = true; if (document.frm.score[1].checked) result = true; if (document.frm.score[2].checked) result = true; if (document.frm.score[3].checked) result = true; if (document.frm.score[4].checked) result = true; if (!result) alert("Please select") return result; } .myradio{background-color : #94bee5} Please indicate on a 1 - 5 scale how strongly you would recommend this article to your colleagues? 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