Canada has a significant opportunity in the global regenerative medicine market, but needs a Canada-first designation and prioritized pathway for advanced therapeutics, and expanded support for scaling life sciences biotechnology companies, says the Stem Cell Network (SCN).

Regenerative medicine began in Canada and decades of public investment have built one of the world’s leading ecosystems of researchers, clinicians and emerging biotechnology companies, the network said in a pre-budget submission for this fall’s federal Budget 2026.

“From stem cell discovery to enabling technologies underpinning mRNA vaccines, Canadian science has repeatedly transformed global health,” said the SCN, whose president and CEO is Cate Murray (photo at right).

“Despite this promise, Canada risks falling behind,” the organization said.

 Early-stage life sciences investment has declined sharply, leaving companies with limited runway and increasing the likelihood that Canadian intellectual property will be sold or scaled abroad.

Fragmented regulatory and reimbursement systems, designed for yesterday’s medicines, delay access, deter investment and undermine competitiveness.

“The result is clear: Canadian discoveries benefit global markets, while Canadian patients wait years longer for access,” SCN said. “Too often these breakthroughs are commercialized elsewhere, leaving Canadian patients waiting and Canada capturing only a fraction of the economic return.”

To secure Canada’s advantage, the country requires a strategic, Canada-first approach that bridges the commercialization gap and prioritizes Canadian patients for Canadian-developed therapies, SCN said.

The global regenerative medicine market is currently valued at approximately US$50 billion to $60 billion and is projected to grow to roughly US$150 billion by the early-to-mid 2030s.

North America accounts for the largest share of this market, creating a significant opportunity for Canada.

If Canada captures between five percent and 10 percent of the global market, it could generate between $7 billion to $15 billion annually in economic activity, anchoring high-value jobs, biomanufacturing capacity and long-term productivity growth.

SCN recommended that the federal government establish a made-in-Canada designation and prioritized pathway for advanced therapeutics, including regenerative medicine and cell and gene therapies, with dedicated resources to support priority review and coordinated regulatory, health technology assessment, and reimbursement processes, thereby accelerating patient access to Canadian-developed and publicly funded innovations.

As a distinct class of therapies, advanced therapeutics require modernized regulatory and access frameworks.

SCN pointed out that leading jurisdictions, including Japan through its Sakigake designation, and the United States through the Food and Drug Administration’s Breakthrough Therapy and Regenerative Medicine Advanced Therapy pathways, demonstrate how priority review, regulatory flexibility and integrated support can accelerate market entry while maintaining rigorous safety standards.

Canada’s current and under-used advanced therapeutics pathway should move beyond a case-by-case regulatory approach to a predictable, criteria-based system with a formal designation, priority review timelines, and early, continuous engagement across regulators, health technology assessment and payers, SCN said.

This designated advanced therapeutics pathway should support adaptive approval models, including the use of real-world evidence, and enable earlier patient access through clinical trials. “It should not be viewed as a tool of last resort by regulators, but rather one that can offer a competitive economic advantage while delivering leading-edge therapies to patients quickly and safely.”

This approach would improve time-to-market, attract private capital and incentivize domestic and global firms to launch and test in Canada, SCN said. It would also strengthen domestic biotechs and ensure stronger economic returns on public research investments.

“Without an efficient clinical trial and approvals environment that considers time and costs, Canadian discoveries will continue to reach foreign patients before Canadians.”

For example, the Montreal-based biotech ExCellThera received millions in public funding to develop its blood cancer therapy, Zemcelpro.

The therapy successfully received authorization from the European Medicines Agency but remains unavailable to Canadian patients due to duplicative, costly and burdensome domestic regulatory requirements.

“A modernized, risk-proportionate oversight framework is vital to end innovation drain and ensure domestic successes are not forced to commercialize abroad,” SCN said.

Biotech companies need more support in pre-seed and seed-stage funding

Canada’s life sciences sector is constrained by a valuation ceiling, where promising companies are forced into early foreign acquisition due to limited domestic scale-up infrastructure and insufficient early-stage de-risking capital, SCN noted.

This results in the loss of intellectual property, productivity, tax revenue and the economic return on decades of public investment. “As global competitors intensify investment across the life sciences value chain, the risk of continued capital and talent flight is increasing.”

To secure long-term economic value, federal support must focus on the earliest stages of company formation (pre-seed and seed-stage ventures) where Canadian bioentrepreneurs require support to generate foundational data, build intellectual property and reach investment readiness, SCN said.

This is particularly critical for cell and gene therapies, which have long development timelines, high capital intensity and complex manufacturing requirements, making early and sustained de-risking essential.

Early-stage manufacturing and CMC (chemistry, manufacturing and controls) development represent significant cost and technical barriers, even before companies enter clinical trials.

Targeted measures should include co-investment mechanisms, translational and de-risking programs, and supports that offset the costs of early manufacturing, prototyping and CMC development, delivered with the speed and flexibility required to match private capital timelines, SCN said.

These supports should be designed to help companies reach defined technical and regulatory milestones, improving investment readiness and enabling the attraction of private capital, while also enabling access to specialized expertise.

An assessment of SCN-supported biotechs showed a 1:30 leverage ratio, with every dollar invested by SCN attracting approximately $30 in follow-on funding.

For example, a $500,000 SCN grant to Vancouver-based Aspect Biosystems enabled the generation of key data that led to a $2.6-billion milestone-based partnership with Denmark-headquartered Novo Nordisk. Expanding this model would enable more Canadian regenerative medicine companies to survive the earliest stages of development, reach key value inflection points and remain anchored in Canada, SCN said.

“This approach will strengthen domestic biotech formation, retain high-value intellectual property and ensure that next-generation therapies are developed and ultimately manufactured domestically, advancing economic growth, health system resilience and national health security.”

SCN also recommended that the federal government commit to long-term stability and predictability of the Strategic Science Fund (SSF), a federal program designed to support independent, nationally focused organizations that bridge Canada’s science, technology and innovation ecosystem.

Without stable, multiyear SSF commitments, Canada risks accelerating the outflow of high-value intellectual property and skilled personnel to competing jurisdictions and diminishing its reputation as a leader in science culture, research and innovation, SCN said.

A strong and stable SSF program will ensure continuity across the innovation pipeline, enabling organizations like SCN to continue leveraging public investment, attracting private capital, and delivering measurable economic, health and social outcomes, SCN said.

“By formalizing a prioritized pathway for advanced therapeutics, expanding support for early-stage scaling, and committing to the long-term stability of the Strategic Science Fund, the government can turn regenerative medicine into a cornerstone of national productivity, health system sustainability, and sovereign security.”

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