Merck Frosst and Genome Quebec strike collaborative deal for anti-fungal research

Quebec government invests $50.4 million

Genome Quebec has struck a major research collaboration with Merck Frosst Canada potentially worth more than $15 million and secured $50.4 million from the Quebec government, boosting its capacity for contributing to the development Quebec's life sciences sector with an emphasis on human health. The Merck collaboration allows for the resumption and expansion of a project between Genome Quebec and Elitra Canada that was successful in Genome Canada's Applied Genomics and Proteomics Research in Human Health competition.

Merck's acquisition of Elitra and the decision to fund its work with Genome Quebec allows work to resume on a research project that was suspended when Elitra declared bankruptcy. Its key researchers, Drs Terry Roemer and Deming Xu, are now employees of Merck. Before the project's suspension, Genome Quebec had contributed $2.7 million. The remainder of the public funding will now be released.

The collaborative research will be conducted at the Centre of Fungal Genetics at Merck Frosst (formerly Elitra) and coordinated with Merck's US labs where similar work is being undertaken. The strength of the anti-fungal research in the Montreal region was critical in Merck Frosst Canada's negotiations with parent Merck & Co, Whitehouse Station NJ, to fund the research in Canada. The investment, if fully realized, represents a 3:1 leverage of Genome Quebec funding and contains royalty provisions.

"Under normal circumstances, you would have expected the research and expertise to be consolidated with our US research lab. But I'm Canadian and I want to keep the research and its potential in Canada," says Merck Frosst president André Marcheterre. "Genome Quebec's contribution allowed us to argue with our parent to maintain these activities in Canada … This is over and above our current trends and commitments."

Most, but not all, of the additional $10 million announced by Merck will also be spent in the region. Marcheterre says the commitment is being made despite the persistent difficulties of investing in Canada.

"We hope to expand our fungal research team (in Montreal) but it's difficult to convince any large pharma to invest in Canada. There's a level of uncertainty that's hard to deal with," he says. "Our innovation system is second to none with excellent research centres, universities and hospitals. The issue always lies with our commercialization system in Canada. We always find a way to not be totally competitive in terms of intellectual property."

For Genome Canada, the Merck collaboration is a validation of the agency's business model and an opportunity to build on the suspended Elitra project.

"For us to keep the scientists here and help Merck set up a new research unit in Montreal is significant. This could be long term," says Dr Paul L'Archevêque, president and CEO of Genome Quebec. "Merck resumed interest in the projects. This is all new money."

SEEKING NEW OPPORTUNITIES

The provincial investment of $40.4 million gives the green light to seven projects approved under Genome Canada's third major competition announced last year (see chart), as well as an additional $10 million to pursue participation in large international projects and stimulate cross investment between academic and private sector research. Genome Quebec has now received more than $300 million since its inception to fund and manage nearly 30 projects in health, bioinformatics, agriculture, environment, forestry and ethics. The Quebec government's investment in Genome Quebec ranks second only to the funding of Genome Canada in support of genomics and proteomics research nationally.

"This funding will ensure that we continue to grow our investments and leverage them," says L'Archevêque.

While the $40.4 million focuses on existing projects, the additional $10 million announced in last month's Budget gives Genome Quebec the ability to seek out new projects and funding partners for future research collaborations. L'Archevêque says the use of the funds will become clearer once Genome Quebec considers its options.

"We have a clear purpose and that is for Genome Quebec to be on the leading edge in genomics and proteomics in Quebec. To do that, there are things we need to do," he says. "We need more international initiatives with Quebec and Canadian researchers in large scale projects ... We're looking at a couple of projects right now and we need to position our science to attract people here. We also want to stimulate cross investment between academic and private sector research, in the same vein as the Merck collaboration. In the last two competitions, there were very few private sector partners so there's a potential gap there."

For Merck's Marcheterre, the real gap in the bid to increase industry-academic collaboration lies between the larger economic environment in Canada and its major competitors. He notes that the former Liberal government introduced legislation to increase effective patent protection from five years to the international norm of eight years, but that legislation died when the election was called. He hopes the Conservative government will reintroduce similar legislation and says he was pleased by last week's meeting between Industry minister Maxime Bernier and the CEOs of several large pharma.

"Bernier met with us at Merck and visited our research facility for one hour and had discussions with several CEOs," he says. "It was our first opportunity to meet."

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