21 Nov Take off: Canadian biotech industry thrives
Last week, we looked at Israeli life sciences and the high density of activities occurring in the small country. This week, your world-traveling columnist takes you north of the border to Canada where he participated in an event offered by the Toronto Biotechnology Initiative.
You may ask what I was doing up in Canada considering I just recently returned from Israel. The Illinois Trade Office, which is part of the Illinois Department of Commerce & Economic Opportunity, is trying to promote the BIO 2006 conference in various countries around the world. They had asked for my help in talking about the Midwest and specifically about Illinois life science efforts to this important Canadian office.
Of great help is the fact that Illinois actually has on the ground in Toronto an Illinois trade office outpost that is staffed by some hardworking and well-connected individuals who are diligently raising the Illinois flag.
So why the interest in Canada? Well, there is a lot to be learned there. Aside from the fact that Canada is our closest neighbor (no aspersions being cast on Mexico), there is a robust biotech industry there with 472 biotech companies, according to Ernest & Young, with the following characteristics:
• 82 publicly traded biotech companies
• 7,370 people employed by the biotech community
• Market cap of $13.7 billion for the Canadian biotech community
• 2004 industry revenue of $2.1 billion (up 21 percent over 2003) and net income of $408 million
• R&D expenditure of $782 million in 2004
• Cash on hand at the end of 2004 of $2 billion
Canada has four key bio clusters:
• Ontario (Toronto) with 27 publicly traded companies
• Quebec (Montreal) with 24 publicly traded companies
• British Columbia (Vancouver) with 16 publicly traded companies
• Alberta (Edmonton) with 15 publicly traded companies
Additionally, Canada had four IPOs in 2004 with rounds ranging from $12.3 million to $42.4 million. These generated a total of $85 million in IPO financing that year. In total, Canadian biotech companies raised about $520 million in 2004 versus $1.1 billion in 2003.
Some of Canada’s leading biotech companies include:
• ID Biomedical
• Angiotech Pharmaceuticals
• Axcan Pharma
Canadian biotech companies have at least two stock exchanges on which to list:
• The Toronto Stock Exchange
• The Vancouver Stock Exchange
Still, many of these companies often look to list on the Nasdaq or the Amex exchanges in the U.S. (or even a dual listing). The key center of Canadian biotech is Ontario with the main city of Toronto taking the lead. Quebec is a close second.
In reality, Ontario is considered to be the third-largest cluster of biotech companies in North America trailing only California and Massachusetts, according to Ernst & Young. Quebec is the fourth-largest ahead of North Carolina, Maryland and New Jersey. British Columbia is right after New Jersey and is ahead of New York, Pennsylvania and Georgia.
While visiting Toronto last week and trying to preach the benefits of locating a U.S. point of entry in the Midwest, it’s no accident that I became painfully aware that Toronto has already produced this meeting not once but twice. Fortunately, the Canadians are a friendly group and enthusiastically tolerated my pitch.
It also helps that Chicago has a similar “feel” to Toronto in terms of weather, location on a major lake, size, ethnic diversity, cultural profile, sports and of course its life science community. In fact, these two cities are incredibly alike in many ways, which should make most Canadians feel at home when they come to Chicago.
When I asked the audience of more than 100 to raise their hands if they had visited either Chicago or Illinois, more than two-thirds had their hands up high. I had the pleasure of meeting with the executive management of the Toronto Biotech Initiative, too. According to this group, there are more than 100 medical biotech companies in Toronto alone.
Nearby Mississauga (for those of you who worked at Searle, this is where Searle had its Canadian headquarters for many years and Abbott still has a facility there) has 69 companies including an area called “Pill Hill”. Mississauga’s total bio sector (including many Canadian subsidiaries of Big Pharma companies) has some 421 companies employing more than 19,700 employees.
Two nearby universities help create the university-company link: the University of Toronto and York University.
In downtown Toronto, the city created a “discovery district” (much like Chicago’s medical district), which is the most concentrated mix of research, medical applications and business support services in a two-square kilometer area. This area also includes a large concentration of research hospitals and the seat of the provincial government.
While I could continue to wax more eloquently on Canadian biotech and particularly the virtues of Toronto biotech, I would never get this column out to you. Needless to say, you need to visit this area, and yes, your Canadian hosts are very friendly.
The Canadian government has a number of financial initiatives for companies looking to set up shop and activities in Canada. Two Chicago-area ag biotech companies (Pyxis Genomics and Chromatin) have already taken advantage of such incentives as well as local talent.
You will also find the Canadian consulate in Chicago a major source of help and very knowledgeable on life sciences in the Midwest. Also, don’t forget that Illinois already has an office in Toronto as an outpost to help you.
If that’s not enough, a meeting will held in December by the Chicago Technology Forum that will feature members of host cities to past BIO annual meetings to let us know about lessons learned and how to get the most out of the meeting before, during and after.
Toronto is sending its lead biotech executive (president of the Toronto Biotech Initiative) to tell us about their two BIO meetings and what they have done for Canada and Toronto. See you next week!
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