Majority of Canada's emerging biotechs unable to continue research
within year
24 July 2009
The recession continues to take its toll on emerging companies
seeking capital investments to commercialize science discoveries in
biotechnology. In an updated survey of Canada’s emerging biotechnology
companies, BIOTECanada was alarmed to see an incredible 70% of companies
will be out of cash and unable to continue their current research
operations within a year.
Most disturbing for Canada’s economy is these companies are managing
existing cash by reducing staff and ending programs. The results build
on the findings of BIOTECanada’s December 2008 survey, which found that
50% of firms would be out of cash within twelve months.
“These worrying statistics point to further layoffs of highly
educated scientists, researchers and entrepreneurs in the fields of
agriculture, medical innovation, renewable energy production and
industrial research. By potentially losing its international foothold,
Canada may be going down a path where it is unable to provide the
necessary environment a stable knowledge-based economy needs to retain
this talent,” said Brad Thompson, President and CEO of Calgary’s
Oncolytics, a cancer biotech drug developer, and Chairman, BIOTECanada
Board of Directors. “The impact of these losses on Canada’s long term
economic well-being cannot be understated.”
BIOTECanada calculates over 2,500 high skilled researchers and
scientists have already been laid off. This number will increase to over
7,000 permanent cuts within a year if short-term financing cannot be
obtained to bridge companies until the normal investment market reopens.
The industry contributed in excess of 12.3 per cent to Canada’s
private sector research and was the only industry to increase its R and
D commitment in 2008. The OECD forecasts that biotech will be the main
source of new medical treatments within the next 10 years, providing 1
new drug or treatment per year; and will be an increasingly important
source for chemical, plastics and energy production.
Many developed nations including the US, UK, Israel, Australia, and
even Norway, have announced multi-billion dollar loan or investment
programmes directed to their biotechnology industries.” explained Peter
Brenders, President and CEO of BIOTECanada. “The loss of so many jobs
and programs means Canada will effectively be giving its research to
other countries to capitalize on.”
“Other developed countries are demonstrating deep commitment to their
biotechnology industries with immediate, multi-billion dollar loan and
assistance programmes. Canada has developed a world-class biotechnology
industry. This investment may be threatened if similar time-sensitive
solutions are not implemented here,” said Ross MacLachlan, President and
CEO of Lignol Energy Corporation, a Burnaby BC biofuels and biochemicals
company.
The industry remains in discussions with the federal government on a
plan to ensure support for the sector. The plan is based on a temporary
loan program to allow firms to sustain operations.
“Firms in the sector are trying innovative ways beyond layoffs to
extend their operations,” affirmed Yves Rosconi, President and CEO,
Montreal’s Theratechnologies, a biotech drug developer. “I do see more
companies than before seeking strategic partnerships, moving operations
or engaging in co-development. Capital investor markets will return and
the goal is to ensure we have viable Canadian companies and jobs to
re-establish our place in the global bio-economy.”
“The government certainly recognises the value of private sector
innovation, so we hope they will see the opportunity to help bridge the
sector through this crisis as part of the short and long term economic
recovery strategy,” stated Brenders. “But, the urgency to act is now.”
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