RESEARCH AND DEVELOPMENT
Canada’s steady growth in biotechnology is due largely to its strong base of scientific expertise and its continuous investment in research and development. The Canadian biotechnology industry demonstrated its commitment to R&D; by undertaking an investment of CDN$1.3 billion in 2001, an increase of more than 60% over expenditures of CDN$827 million in R&D; in 1999. In 2004, Ernst &Young; reports
that public biotechnology firms have increased their R&D; spending by an average of 22% annually between 1998 and 2003.
Canada has established the fastest rate of growth in the number of workers devoted to R&D;, in external patent application and in business expenditures on R&D; among G7 countries. Canada’s growing R&D; capacity in biopharmaceuticals is a natural evolution from a research base that has won an international reputation in fields such as genomics, proteomics, bio-informatics,
stem cells, immuno-therapies, protein engineering and new drug delivery systems. Sixteen Canadian universities are affiliated with a network of more than 100 teaching hospitals and research institutes, conducting research with significant commercial potential. Currently there are 540 products in the biopharmaceutical product pipeline from research through to market.
THERAPEUTIC PRODUCTS IN DEVELOPMENT (PI-PIII)
| Blood, skin and respiratory disorders |
5 |
| Eye conditions, Transplantation, Diabetes |
7 |
| AIDS/HIV and Autoimmune disorders |
8 |
| Growth and Digestive disorders |
9 |
| Heart diseases |
12 |
| Neurologic |
18 |
| Infectious diseases |
19 |
| Cancer |
65 |
COMPANY GROWTH AND DISTRIBUTION
In 2003, the number of Canadian biotechnology companies grew to 470, consisting of 81 public and 332 private firms. According to E&Y;, Canada continues to have the second highest number of biotechnology companies in the world demonstrating a strong entrepreneurial culture, a supportive business climate and Canada’s commitment to growing this vital sector. In 2003, public biotechnology company
revenues were CDN$1.7 billion, an 18% increase over 2002 revenues. Over a 5-year period total revenues of all Canadian biotechnology companies have been growing annually by 46% and totalled $3.6 billion in 2001.
CANADIAN BIOTECH COMPANIES BY SECTOR
CANADA'S INVESTMENT CLIMATE
Canada’s R&D; environment ranks first in terms of cost competitiveness for biomedical R&D; compared to other industrialized nations including the U.S., Europe and Japan.
The country has many other strengths. Overall, as a location for manufacturing, Canada has the lowest costs to establish and operate a manufacturing facility when compared to all other G-7 countries. Federal taxation offers a 20% non-refundable tax credit for public companies and a 35% refundable tax credit for private companies on current R&D; expenditures, including
capital expenditures on R&D; and machinery and equipment. The Scientific Research & Experimental Development (SR&ED;) program provides tax incentives to eligible companies that develop new or improved technologically advanced products or processes
in Canada.
The overall skill level of Canada's workforce ranks first among competing countries. Specialized organizations like Genome Canada, the Networks of Centres of Excellence and the National Institute for Nanotechnology, have been established to ensure focus, direct funding and to attract the world’s most qualified researchers in emerging fields.
FINANCING
With the growing strengths of the sector and the alluring prospects of substantial returns, the public markets have been extremely supportive of the Canadian biotechnology industry. Capital markets have made a remarkable recovery from the tightness experienced in 2001-2002. In 2003, Canadian biotech firms attracted an increasing share of VC investment (25%) and a total of CDN$1.9 billion in
financing was raised, doubling the amount raised in 2002.
FEDERAL GOVERNMENT'S COMMITMENT TO BIOTECHNOLOGY
The federal government’s strong leadership in the areas of economic and innovation policy has contributed significantly to Canada’s success in biotechnology, by stimulating the development of a critical mass of research infrastructure, large pools of post-graduate and post-doctoral research, world-class academic, public and private sector research investigators, entrepreneurs and a renewed
vision for the sector, through the Canadian Biotechnology Strategy. In 1999, Canada established Genome Canada which is dedicated to enabling Canada to become a world leader in genomics and proteomics research. The Canada Foundation for Innovation (CFI) was established in 1997 as an independent corporation with the goal to strengthen the capability of Canadian institutions to carry out world-class
research and technology development. In 2003 the federal government increased the level of funding to CFI by CDN$500 million, increasing the total federal support for
CFI to CDN$3.65 billion.
IN CLOSING
Canada is a world leader in the biotechnology industry. That has been helped by a proven commitment from the Government of Canada, which has steadily increased its investment in the sector's infrastructure, thereby ensuring that Canadian industry will play a lasting and meaningful role both at home and abroad. The bottom line is that Canada offers a place of opportunity for biotechnology –
somewhere that research, scientists and private industry can find the knowledge, the infrastructure and, most of all, the supportive attitude that fosters success.
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Life Sciences Gateway
