BIOTECanada's Parliamentary Quarterly is an advocacy newsletter, recommending policy actions to improve the biotech industry in Canada.

1. Parliamentary Quarterly
R
March 2009
Staying in the biotechnology race to WHAT’S AT STAKE
innovate: Need to stay competitive has
With capital markets closed, we face the loss of thousands of jobs
never been greater in research and development. The long term costs to the economy
The financial crisis has had a profound impact on include the loss of discoveries, new therapies, drugs and processes
biotech companies and, as such, on continued that will now not be brought to market or developed here.
innovation in biotechnology. Small biotech • There are more than 52,500 employees within the 556 Canadian
companies typically fund research and development core innovative biotech companies engaged in innovative
for a decade or more with investor capital prior to research.
achieving any revenue. These companies are highly • Innovative biotech companies average close to 60 employees,
dependent on well functioning capital markets and with half of these companies having just 20 employees or less,
are especially vulnerable to a market crisis. When yet together they contribute more than $1 billion to annual R&D
credit markets seize up, as has occurred in recent in Canada.
months, there is less capital available for investors
• 50 % of emerging Canadian biotech firms will be out of cash by
to put at risk; and the capital that is put at risk is
year end with no renewal potential.
dedicated to shorter term, lower risk options. Because
• 25 % of companies will be out of cash by June 2009.
biotech investing is higher risk in nature, while some
areas of the economy have seen a slowdown, biotech At stake is the foundation of Canada’s Biotechnology Community.
has seen a near freeze. (Read more on page 2)
• The amount of new capital raised by biotechnology
WHAT CANADA MUST DO
companies has fallen 41% in 2008 relative to 2007.
(source: Thomson Reuters).
Rebuilding the Canadian economy through the recovery cycle of the
• As of December 2008, over 25% of Canadian
next 18-24 months requires targeted short-term measures aimed at
biotechs have less than 6 months cash remaining
sustainingourbiotechnologyindustry;ensuringCanadaiscompetitive
and over 50% have less than one year of cash. For
in attracting capital and able to retain highly skilled researchers and
smaller public companies, more than 40% have
entrepreneurs. BIOTECanada specifically has developed a 3 point
less than 12 months cash remaining.
action plan designed to create revenue for the government, while
• From September 2008 through to January 2009, positioning Canada for long-term economic success on the global stage:
Canadian biotech stock prices were down an
1. Allow SMEs to apply for a one-time cash refund on their tax
average of 44.7%, a full quarter more than the
losses, with the provision that they reinvest in research and
S&P/TSX Composite Index (down 32.4%).
development;
• On the TSX and Venture Exchange alone, 47 2. Exempt the next two years’ of investment from capital gains
companies have seen their market capitalisation tax to encourage investors to invest now;
fall by more than 50% since September 2008. Of 3. Change the SR&ED program to allow all companies
these, 17 have fallen by more than 75%. conducting R&D in Canada to receive refundable credits, on a
• Initial public offering funding has fallen by quarterly basis.
97%. In the US, there has been only 1 biotech
Table of Contents
IPO in 2008 which raised $5.8M. This compares
to 28 IPOs that raised a total of $1.7B in 2007.
Canada’s Biotechnology Community ...................................................................2
(source: Bloomberg). In Canada, there were no
Canadians confirm biotechnology is vital to their future economic prosperity ..2
IPOs in 2008.
Canadian Discoveries ....................................................................................... 3
Biotechnology by the numbers ......................................................................... 4
BIOTECanada -- March 2009
BIOTECanada Summer 2008

2. WHAT OUR GLOBAL THE CANADIAN
COMPETITORS ARE DOING BIOTECHNOLOGY COMMUNITY
Canada’s biotechnology community includes innovative
The US economic stimulus bill provides significant support
firms, engaged in research and commercialization and public
to basic and economic competitiveness-related research. The
sector entities directly engaged in biotech research.
final bill contains $10.4 billion-for the National Institutes
of Health, $3.0 billion for the National Science Foundation,
$1.6 billion for the Department of Energy Office of Science Private Sector Related Jobs
and $600 million for the National Institute of Standards and
Technology. The bill gives $18.0 billion to federal agencies for Core Biotech Development
the conduct of R&D and $3.5 billion for R&D facilities and Agricultural biotechnology
large equipment. (including food and nutraceuticals) 88
Industrial and Environmental 115
The French government has tripled its research tax credit to
Therapeutics & Health 166
support corporate research. The credit is fully refundable for
Other global biopharma 22
a period of 5 years, up to $19 million, plus more for certain
Bioinformatics, Analytical, Genomics and 105
emerging companies.
Proteomics
Norway announced $517 million for its life science sector,
Other research and manufacturing services 60
and increased the amount of loans made by its state research
entity to research-intensive companies, principally biotech
Total Core Biotech Companies 556 52,500
and information technology groups, from $57 million to $169
million a year
Specialized Biotech Suppliers and
The UK is working to confirm a new national fund specific Engineering Companies * 100 14,800
to life sciences. The UK government has created a Ministerial
Industry Strategy Group (MISG), consisting of pharmaceutical Public/Non-Profit Sector Related Jobs
and biotech company CEOs to identify mechanisms to
protect pharmaceutical and biotechnology companies from Institutes 40 8,840
the downturn. Science/Technology Park 8 400
University (Research Centres, Biotech 78 7030
The Israeli stimulus package provides targeted support
Departments, Bio-Labs)
to its biotechnology sector with $76 million allocated for a
Hospital** 38 20,000
fund specializing in investments in biotech companies. $107
million has been alloced to the Chief Scientist’s Office to
Total Public/Non-Profit 164 36,270
provide funds to start-ups and set up a $397 million fund to
supply credit to medium-sized businesses.
BIOTECHNOLOGY COMMUNITY 820 103, 570
Canada cannot afford to stand still and ignore the competitive
Source: Statistics for Canada, Canadian Lifesciences Database. Online source. (Last access
environment as other nations adopt policies to help grow
February 23, 2009) *Note: legal, PR, consulting services are not included
and stimulate the knowledge-based industries that are vital ** Source: Association of Canadian Academic Healthcare Organizations. Eureka! March 2008
to economic recovery in both the short and long term.
Canadians confirm biotechnology is vital to their future economic prosperity
BIOTECanada commissioned a poll to determine if Canadians
The Canadian bio-based economy is equal to that of
place a higher priority on certain sectors as vital to the Canadian
the automotive industry.
plans for an economic recovery. The results, issued January 9,
2009, clearly show an overwhelming level of support for the
biotechnology industry as being vital to the overall economic
recovery for Canada.
• 86% of respondents felt biotechnology is an important part
of Canada’s future economic prosperity.
• 81% of Canadians support incentives for biotechnology and
high tech being included in economic recovery programs
(53% support, 28% somewhat support).
• Support levels are less for other sectors: 80% support help
for the forestry and mining sectors (45% support and 35%
somewhat support), 68% support helping the automotive
sector (36% support and 32% somewhat support) while
only 45% support the banking sector (21% support and 25%
somewhat support) receiving assistance.
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BIOTECanada - Summer 2009
BIOTECanada - March 2008

3. CANADIAN DISCOVERIES
Global First: Embryonic Stem Cells McMaster Discovery Makes
grown from skin Blood Cells from Stem Cells
The ethical debate over embryonic stem cell use may soon Researchers at McMaster University’s Stem Cell and Cancer
be over, thanks to a Canadian team of researchers at Research Centre have discovered how to use stem cells to
Mount Sinai Hospital who, working with a team from increase blood development. Once refined and approved
the University of Edinburgh in Scotland, found a safe for clinical use, the process could help leukemia and other
way to grow stem cells from a patient’s own skin. This cancer patients produce their own healthy new blood faster.
revolutionary finding, published by the international Working with researchers from the University of Washington,
science journal Nature, is the first time stem cells have been the team discovered that a communication pathway in the
grown without using carcinogenic viruses. The discovery cells – the ‘noncanonical Wnt’ – organises cells to change
facilitates stem cell use, which has widespread potential functions within hours, not days as previously thought.
application to many conditions including Alzheimer’s, This milestone demonstrates the need to focus on the early
diabetes and Parkinson’s. The discovery was led by Dr. hours of new cells to trigger other types of cell conversions.
Andras Nagy, who in 2005 found Canada’s two stem cell
lines.
Canadian Test for Lethal Heart
Researchers at SickKids identify
Condition Goes Global
protein critical for memory and learning
Researchers from Memorial University in St. John’s, N.L.,
Canadian scientists at Sick Children’s Hospital have
together with Newfoundland-based, Newfound Genomics,
connected a crucial brain protein, Neto1, with the ability
and Boston’s PGxHealth Ltd. discovered a gene mutation
to learn, raising the possibility that learning disabilities
that causes predominantly young men to drop dead due to
could be corrected with a drug. The finding, published in
Right Ventricular Cardiomyopathy, or ARVC, where heart
PloS Journal, indicate that Neto1 helps brain cells talk to
muscle is replaced with fibrous tissue and fatty deposits.
one another, resulting in learning impairments when it is
The team also created a test for the condition, which they
missing or malfunctions. Remarkably, the scientists have
are launching worldwide.
also found a medication, now being tested in Alzheimer’s
patients, which may fix the problem.
Researchers Discover Key Canada-US Team Rejuvenates
to Drug Resistant Superbugs Virus-killing Immune Cells to Fight HIV
Scientists from Simon Fraser University and from the A Canadian-U.S. research team discovered a way to rejuvenate
University of B.C. pinpointed gene clusters that boost key virus-killing immune cells that become “exhausted” after
the ability of ordinary bacteria to become drug-resistant a person is infected with HIV. The discovery, published in
superbugs. The findings, published in Genome Research, the Journal of Experimental Medicine, opens the possibility
are expected to lead to new therapies and treatments for of a whole new approach to therapy, based on bolstering the
bacterial infections and are particularly significant for body’s natural ability to fight the disease by revitalizing CD8
children suffering from cystic fibrosis whose bacterial killer cells inside the body’s immune system.
infections are often fatal.
CONTACT / CONTACTEZ BIOTECanada
Cate McCready
Vice President, External Affairs /Vice-présidente aux affaires extérieurs
cate.mccready@biotech.ca 613-230-5585 ext/poste 230
www.biotech.ca
BIOTECanada -- March 2009 3
BIOTECanada Summer 2008

4. Canada Continues to Lead Growing Global Adoption of biotech crops
Canada’s global leadership in the development and adoption Canada remains in the top five countries growing biotech
of agricultural biotechnology plays a strong role in bringing crops, with 18.8 million acres planted last year. This is a
in more effective, economically sound and environmentally- strong 8.5 percent increase over 2007 plantings. Significantly,
responsible crop production solutions to farmers and Canada was one of only two countries to commercialise a
consumers globally. new crop this year, with the introduction of the herbicide-
tolerant sugar beet. The success of this technology and
According to a new report, 2008 saw the rate of adoption for production of sugar beets will mean future success for
biotech crops increase exponentially: while it took 10 years the primarily developing countries producing sugar cane,
to reach the first billion acres, only 3 years were needed to which accounts for 80 % of the worlds’ sugar. The full report
reach the second billion acres. Projections indicate 3 billion is available at: www.isaaa.org
acres will be exceeded in 2011 with over 4 billion accumulated
Global Highlights
acres by 2015, the Millennium Development Goals year.
• 13.3 million farmers worldwide grew 309 million acres
Developing countries are especially strong adopters of of biotech crops in 25 countries, a 9.4 % increase from
biotechnology. This year 15 developing countries, and only 2007.
10 developed nations, planted biotech crops. Biotech crops • 90 % (12.3 million) of farmers who benefit from biotech
have improved both the income and quality of life of small, crops are subsistence farmers living in 15 developing
resource-poor farmers: 90 % (12.3 million) of farmers who countries.
benefit from biotech crops are subsistence farmers living • Over the last 11 years, developing countries have had
in 15 developing countries. The majority of biotech crops a global impact of $ 66 billion in economic benefits;
continue to be core food staples with soybeans grown on $ 44 billion to the developing world.
162 million acres followed by maize, cotton and canola.
Clive James, Global Status of Commercialized Biotech/GM Crops: 2008. ISAAA 2008.
Biotechnology by the numbers
Biotech Companies in Canada by Area of Expertise Canadian Biotech by Province
Other research
and
manufacturing
Bioinformatics,
services
Analytical,
60
Genomics and
AgroBio
Proteomics
(including food
105 and nutraceuticals)
Other global
22 88
biopharma
Industrial and
Environmental
Therapeutics 115
166
Source: Canadian Life Sciences Database, February 2009
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BIOTECanada - - March 2009
BIOTECanada Summer 2008