Life sciences commercialization initiative seeks to capture benefits of Canada's growing research base

High-profile backers of a proposal to assist in the commercialization of Canadian bioscience research are gaining powerful support for their plan to strike at the heart of one of the most vexing challenges facing Canada's efforts to create a truly innovative economy. Their plan to establish a national virtual commercialization institute seeks to combine the research strengths of the life science-focused Networks of Centres of Excellence (NCE) and a wide variety of other relevant players, capitalizing on Canada's substantial investment in basic biosciences research.

Leading the formidable grouping of individuals behind the proposal is Dr Fraser Mustard, head of The Founders Network and a pioneer in the creation of novel research organizations such as PRECARN Inc and the Canadian Institute for Advanced Research. He is being provided with high-octane assistance from the likes of Dr Bob Church, Harry Swain, Dr Calvin Stiller, Dr Gordon McNabb and Dr Michel Chrétien. Each in their own way have scored significant achievements in establishing powerful engines for research and commercialization, and their combined expertise is bound to generate considerable enthusiasm in their respective spheres of influence.

The proposal's proponents argue that additional funding from public and private sources is essential to assist life sciences organizations with applied and developmental research for proof of concept and prototyping, scale-up to full production, identification of promising technologies and technology bundling.

The proposal's supporters contend that without such an initiative to nurture and add value to commercially promising intellectually property (IP), Canada risks developing world-class research expertise in the life sciences that will only benefit foreign-based corporations.

To be jointly funded by government and the private sector, the proposed partnership is conceived as a not-for-profit entity led by industry and modeled on PRECARN Inc, a national organization established in 1988 to develop receptor capacity for research surrounding robotics and intelligent systems. At this stage, the request for federal funding is relatively modest at $8 million annually, with matching funds coming from a variety of industry players. But the proposal - tentatively entitled An Initiative to Help Make Canada A Leading Bioscience Nation - is still in the early stages of development, with no concrete decisions yet on how financial assistance will be provided.

If funded and successfully implemented, the life sciences initiative would also help solve the dilemma faced by NCEs at the end of their 14-year federal funding cycle. An assessment last year by the Protein Engineering Network (PENCE) strongly suggests that the pursuit of its mandate to simultaneously conduct basic research and undertake commercialization activity will be impossible once the federal funding well runs dry.

In fact, the proposed initiative grew out of a smaller initiative led by PENCE last year to link with other life science NCEs in a commercialization venture. But a generally negative reaction from the university community - particularly the industry liaison offices (ILOs) - sent the concept back for re-tooling.

"I took it over, pulled it into a different level and brought in more people. There is a growing group of individuals who want to see it done," says Dr Mustard in an interview from Rotterdam. "In Canada we have macro-economic policy that's compatible with innovation but we don't have the micro-economic policies to take it further. We have to fight to push it forward."

The proposal is one of several schemes currently being examined by the federal government as it seeks ways to respond to last year's expert panel report on the commercialization of university research, produced by the Advisory Council on Science and Technology (ACST) (http://acst-ccst.gc.ca/acst/home_e.html). Montreal-based Inno-Centre Canada has also approached the government requesting funds to expand its successful technology mentoring and commercialization model across Canada (R$, January 15/01), and it's possible that the two proposals may be joined or at least become closely linked. Proposed provincial initiatives in Alberta and Ontario are also demonstrating that there is widespread interest in developing ways to domestically capture the IP that Canada is producing.

"If we're going to be on the international map, we have to have some sort of geopolitical network that allows us to be competitive. We have to link our research strengths," says Dr Church, professor emeritus of the Univ of Calgary's faculty of medicine. "This would be a unique partnership using a private sector business discipline, a virtual network to enhance innovation and building on the networking strengths of various groups."

The initiative's key backers have been fanning out across the country over the past few months, selling the concept to senior representatives of research institutions, financial institutions, venture capital firms, the biotechnology and pharmaceutical sectors and governments. The federal government has been a major focus of the lobbying campaign, and the concept has captured the interest of senior officials at Industry Canada, Finance Canada and the central agencies.

Mustard says the relatively small size of Canada's life sciences sector makes federal support critical if the initiative is to fly. "Government funding is essential for the risk aspect of research. If this initiative grows, it (federal funding) will have to grow along with it," he says. "To make this go at the start will require $6-8 million of industrial funding and an equivalent amount of government money."

Several corporations have also indicated a willingness to support the initiative financially, but Mustard says he is not actively seeking funding until the concept is approved by government.

During its start-up phase, the virtual commercialization network would: work to develop a portfolio of promising research for potential bundling; establish a strategy to identify and support proof-of-concept work; assist with IP protection and licensing; bring together specialized financial, management and personnel expertise; and, work with investors, firms and potential start-ups.

Designed largely on a blend of the NCE and PRECARN models, the life sciences initiative is designed to augment existing commercialization vehicles at the university level and interact with organizations such as Genome Canada and the Canadian Institutes of Health Research. But the proposal ran into early opposition from the university community, although there are indications that initial reluctance on the part of the universities is weakening.

Church says that he and his fellow boosters are private individuals who are volunteering their time out of a sense of nationalism, and in response to what they see as a serious need in the economic and research fabric of the country. But he asserts that there is no intention of creating a new entity that would impinge on the jurisdictions of other players.

"It's basically a partnership, and others like the ILOs and Inno-Centre are all important players," says Church. "We want to focus on networking and bundling of technologies, although it's still too early to say what we'll actually be funding."

Church says that the business plan currently under development is exploring four options before choosing the one they hope "will be acceptable from a federal point-of-view" for formal presentation in June.

ACST REPORT A FLASH POINT

When the ACST report on the commercialization of university research was released last year, it quickly became a flash point over control of IP rights. The same sensitivities that greeted the report have also been raised by the biosciences commercialization proposal, both within the university's ILOs and even some NCEs. The proposal was pitched during a recent meeting of the chairs of the NCE boards of directors and Church says that while the chairs were generally supportive of the need for such a networking instrument, enthusiasm for specific measures were not unanimous.

"For the bundling concept, there were varying degrees of enthusiasm. It all depended on the field of interest," he says. "There are many spin-out companies from the NCEs but many have one product and the question is, are they sustainable? They may need bundling if they are to survive."

Dr Ron Woznow, CEO of the Canadian Genetic Diseases Network, says the board of his NCE is fully behind the proposal but he acknowledges that its university partners must also be on side for the concept to work.

"There are distinct roles for the universities, the NCEs, venture capital and government to play to facilitate commercialization and this initiative would provide badly needed resources," he says. "The value of the initiative from our point-of-view is not dependent on who holds intellectual property rights. If it gets technology off the shelf, then everyone benefits...Anything that will allow us to move our technology through (to commercialization) is a plus."

Still, there is suspicion on the part of many university ILOs that the initiative may usurp their role by taking a centralized approach to commercialization.

"That won't be very popular and it won't be very effective...You have to walk the hallways," says a senior technology transfer manager with one of Canada's large research-intensive universities. "A lot needs to be done with Canada's ILOs but the problem is resources. It's not structural. But this initiative has a lot of influential folks behind it and this is Canada. When these people speak, others listen."

Mustard says that while it's essential that the direction of the commercialization network must be controlled by its business partners, there is no intention to take over work now being done by the ILOs "We will work with the ILOs on deals they are comfortable with," he says. "We want to apply the lessons we've learned with the NCE structure to overcome barriers to efficient commercialization."

Church also contends that the life sciences initiative has no intention to make an IP grab or assume any of the roles currently played by the ILOs. On the contrary, he asserts that the ultimate beneficiaries of the initiative will be the ILOs themselves.

By placing its emphasis on partnership, technology bundling and human resources development. "If our research networks are not self-sustaining, then we've walked away from the reason for starting them in the first place - to build networks that are globally competitive."

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