Ethics - Bio Business

Human Resources Issue: Solving the catch-22 of requiring Canadian experienceChampioning the Business of Biotechnology in Canada Summer 2010Job-readinessBioTalent's Colette Rivet tackles the issuein concert with industry, educatorsCanadian Publications Mail Product—Agreement 40063567EthicsCorporate social responsibility,genome sequencing andgenetic patentswww.biobusinessmag.comYEARS

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Bio BusinessChampioning the Business of Biotechnology in CanadaContentsHuman Resources20 Q&A with Colette RivetColette Rivet, Executive Director, BioTalent,on everything HR.22 The Immigrant ExperienceDespite language barriers and foreigncredentials, hiring new Canadians makesgood business sense and many organizationsare ready to help these workers and biotechsfind each other and succeed.CanaDa24The Conference Board of Canada RatesHow Canada PerformsHow Canada Performs: A Report Card on Canada—showsCanada ranks 14th among 17 countries and continues tobe a “D” performer on innovation.also inside8 BIO 2010 Wrap-upHighlights from the 2010 BIO InternationalConvention in Chicago12 Business ManagementCorporate social responsibility. Sustainability.Business ethics. Call it what you will, biotechsneed a firm grasp in the face of growingexpectations16 DiscoveriesRapid advances in genome sequencingare changing the face of healthcare27 Regional ProfileTucson, Arizona30 FinancingEverything you need to know about an IPO33 IP & PatentingGene patents come under fire38 In PersonScott Cormack, President and CEO ofOncoGenex and BIOTECanada’s 2010Golf Leaf Company of the YearCover photo: Pawel Dwulit“standards6 NEWS36 PRODUCTS37When you bring in internationally trained biotechprofessionals, you’re bringing in people who will havea fresh perspective. They’re innovative and will giveyou ideas about business processes and products, thingsthey’ve seen and done in their home country that youcan apply here.”~ Brigid Elmy, Project Manager at the Pathways to Employment inBiotechnology program, University of Toronto. (read more on page 22)Summer 2010 Bio Business 3

Bio BusinessChampioning theBusiness of Biotechnology in CanadaPublisher& CEOChristopher J. Forbescforbes@jesmar.comEditor’s NoteExecutive EditorTheresa Rogerstrogers@jesmar.comStaff WriterContributorsArtDirectorSecretary/TreasurerSalesManagerAccountCo-ordinatorCommunicationsAssociateProductionManagerProductionCo-ordinatorJason Hagermanjhagerman@jesmar.comMartin E. AquilinaGraeme BoocockConference Board ofCanadaBernadette JohnsonKathleen MarsmanTammy Malabretmalabre@jesmar.comSusan A. BrowneBeth Kukkonenbkukkonen@jesmar.comMichael Valentinomvalentino@jesmar.comNicole Burnienburnie@jesmar.comRoberta Dickrobertad@jesmar.comJoanna Forbesjforbes@jesmar.comBio Business is published 5 times per year by JesmarCommunications Inc., 30 East Beaver Creek Rd., Suite202, Richmond Hill, Ontario L4B 1J2. 905.886.5040Fax: 905.886.6615 www.biobusinessmag.com Oneyear subscription: Canada $35.00, US $35.00 and foreign$95. Single copies $9.00. Please add GST/HST whereapplicable. Bio Business subscription and circulationenquiries: Garth Atkinson, biondj16@publicationpartners.com Fax: 905.509.0735 Subscriptions to businessaddress only. On occasion, our list is made available toorganizations whose products or services may be of interestto you. If you’d rather not receive information, write to usat the address above or call 905.509.3511 The contentsof this publication may not be reproduced either in partor in whole without the written consent of the publisher.GST Registration #R124380270.PUBLICATIONS MAIL AGREEMENT NO.40063567RETURN UNDELIVERABLE CANADIANADDRESSES TOCIRCULATION DEPT.202-30 EAST BEAVER CREEK RDRICHMOND HILL, ON L4B 1J2email: biond@publicationpartners.comBio Business is a proud memberof BioteCanada andLife Sciences Ontario.EthicsCorporate social responsibility hasbeen part of our business vocabularyfor some time, but what arecompanies really doing about it?As we learn in “Corporate SocialResponsibility—A rose by any othername?” on p. 12, most Canadian businessesare already guided by a very broadset of ethical, political and social obligations,or business ethics, such as environmentaland energy initiatives, communityoutreach, transparency and accessibility,safety and security, product stewardship,and employee rights. What are they doingabove and beyond? Like many otherindustries and big businesses, companiesin the bio space seem to be mostly aboutgoing green.Chris MacDonald, of the departmentof philosophy at Saint Mary’s Universityin Halifax, and the author of a regularblog site on the topic, says the biotechindustry has special challenges. For one,since cutting-edge science is the name ofthe game, businesses in biotech must dealwith a phenomenal rate of change andflux. There are also enormous legislativegaps because the issue hasn’t existed untilnow, or regulatory agencies lack the scientificcapacity to handle them.A great example occurs in genomesequencing. In “Getting to Know You”on p. 16, we look at how rapid advances inthis space are changing the face of humanhealthcare. Home genetic test kits arealready available in U.S. drugstores thoughthe FDA is now taking steps to regulatethese tests. This will certainly prove to bean area to watch as issues of ethics andrisk/benefit scenarios play out.Ethics also come into play in, “TheImmigrant Experience” on p. 22 of ourHR special. It’s a story I’ve wanted to dofor a long time. Living in the Toronto areaand being married to someone whoseparents immigrated here in 1966, I’m notonly surrounded by the issue, butimmersed in it.Immigrants are no different than thoseof us born and educated right here inCanada. We all want a chance to use ourskills and training. We all want to be ableto take care of our families. We all want tobe meaningful contributors to society.And we all deserve a chance to shine.Allowing all workers access to the samejobs (provided their skills and credentialsare a match) has always been a thornyissue, but it is the ethical thing to do.Theresa Rogerstrogers@jesmar.comPublisher ofLab Business MagazineLab Business CardsBio Business MagazineHave you visited our website recently? Go to www.biobusinessmag.com toread the magazine online, browse reports, or explore company profiles andthe latest news.Printed in CanadaSummer 2010 Bio Business 5

The global biotechnologyindustry wasable to weather thecontinued worldwideeconomic turmoil anddeliver a strong financialperformance in2009, with the world’sestablished biotechcentres reaching profitabilityfor the first timein history. However, the gap between the “haves” and “have nots”in the industry continued to widen in 2009, posing new challengesfor emerging companies in accessing the capital needed forR&D. These and other findings were released recently in BeyondBorders: Global Biotechnology Report 2010, Ernst & Young’s 24thannual report on the biotech industry.“Biotech companies have long confounded predictions on theirability to survive difficult economic conditions and 2009 was nodifferent,” says Glen Giovannetti, Ernst & Young’s GlobalBiotechnology Leader.Key financial findings from the report include:«Pharma NewsBeyond BordersMerger Creates Strong Cash FlowValeant and Biovail have approved a definitive mergeragreement under which the companies would merge to becalled Valeant Pharmaceuticals International, Inc.J. Michael Pearson, currently Chairman and CEO ofJ. Michael PearsonValeant, will serve as the new Valeant’s CEO, and Bill Wells,currently CEO of Biovail, will be the non-executive Chairman. The new Valeant’sBoard of Directors will consist of 11 members, including five Biovail representatives,five Valeant representatives and one additional independent Canadianresident director to be identified through a search process, nominated by Valeantand agreed upon by Biovail.“This compelling combination will create tremendous value for stockholders ofboth companies as our business benefits from cost savings, greater scale, efficienciesfrom extending Biovail’s corporate structure and enhanced financial strengthand flexibility. We are committed to delivering the anticipated cost savings benefitsand, as we did with Valeant over the past two years, transforming the newentity into a diversified, specialty pharmaceutical company focused on growthand cash flow generation,” says Pearson.Following completion of the merger, the new Valeant will be headquartered inMississauga, Ontario, and will remain a Canadian domiciled corporation, listedon both the Toronto and New York Stock Exchanges.www.valeant.comwww.biovail.com• Companies in the industry’s established biotech centres of theU.S., Europe, Canada and Australia had an aggregate net profit of$3.7 billion (U.S.) in 2009, an improvement from the $1.8 billion(U.S.) net loss in 2008 marking it the first time ever these marketshave reached aggregate profitability. This improvement was drivenby a dramatic increase in net profit in the U.S. market due largelyto the adoption of new cost-cutting and efficiency measures.• Revenues of listed biotech companies fell by nine per cent to$79.1 billion (U.S.) in 2009 from $86.8 billion (U.S.) the prioryear. The bulk of this decline was due to the exclusion ofGenentech in 2009 as a result of its acquisition by large pharmaceuticalcompany Roche. Excluding Genentech from both years,industry revenues would have grown by eight per cent.• Companies in the U.S., Europe and Canada raised $23.2 billion(U.S.) in 2009, a 42% increase compared to 2008. A significantportion of this capital was raised by a handful of established publiccompanies in follow-on offerings, as access to capital for manycompanies remained scarce.The report also identifies a number of guiding principals forbiotech companies to adopt, and includes in-depth regional findingsfor major biotech markets.www.ey.caTaking Home the SilverAt the Medical Design and Manufacturing(MD&M) East 2010 Conference andExposition in New York City, AngiotechPharmaceuticals was named a 2010 MedicalDevice Excellence (MDEA) silver award winnerfor excellence in medical device designfor its Quill Self-Retaining System (SRS).Winning entries are chosen based oninnovative use of materials or processes anddesign and engineering features thatenhance the ability of medical professionalsto provide healthcare, improved patient benefitsand better overall delivery of care.“Angiotech is very proud to receive a2010 Medical Design Excellence Award,”says Dr. William Hunter, President and CEOof Angiotech. “This award further reinforcesour belief that Quill SRS is a revolutionaryconcept in wound closure, a product areathat has not seen any significant advancementsin many years.”www.angiotech.com6 Bio Business Summer 2010

BIO 2010“The unique value of BIO is that it is truly an internationalevent,” says Dilley.Public officials from across Canada and the world were inattendance. Tony Clement, Minister of Industry; Ed Stelmach,Premier of Alberta; Jean Charest, Premier of Quebec; and RobertGhiz, Prince Edward Island’s Premier walked the floor as didFrance’s Minister of State for Foreign Trade; Malaysia’s Ministerof Science, Technology and Innovation; Spain’s Minister ofIndustry, Tourism and Commerce; and Taiwan’s Minister of State,among many others.Record setter“The highlight of the show was the business forum in whichcompanies were able to not only present a comprehensive overviewof their development pipeline or technologies, but alsoallow for targeted partnership meetings,” says Jeff Smith,President of Allphase Clinical Research Inc.This year’s keynote speakers were a highlight of the event formany. On Tuesday, former presidents Bill Clinton and GeorgeW. Bush took to the stage in front of close to 5,000 confereesfor a discussion moderated by Greenwood. The discussionranged from past presidencies to current events.“People liked it because it was like sitting in the living roomtalking to them,” says Robbi Lycett, Vice-President of Conventionsand Conferences for BIO. “It was more relaxed than it would havebeen with them delivering a speech. It was a frank, open discussionand I think people really appreciated that.”Wednesday’s keynote featured climate-change activist andformer U.S. Vice-President Al Gore discussing personalizedmedicine, stem cell research and next-generation sequencing.Award winnersBIO 2010 was the setting for a number of competitions andaward presentations such as the Sanofi-Aventis InternationalBioGENEius Challenge, organized by the BiotechnologyInstitute.Saskatchewan’s Rui Song, winner of the Sanofi-AventisBioTalent Challenge, Canada’s qualifying event for theBioGENEius Challenge, received an honourable mention forher project, titled Racing to Find a Marker: Development ofMolecular Markers for Races of Colletotrichum Truncatum.Winners of the challenge were announced during Tuesday’skeynote luncheon, with Raina Jain, a junior from FreedomHigh School in Bethlehem, Pennsylvania, receiving first prize.Jain’s project, titled Engineering Glass Bone Implants toEnhance the Adhesion of Precursor Osteoblast Cells, foundthat cells adhered better to smoother surfaces, resulting inimproved bioglass implant performance and mobility.Innovation was also recognized with BIOTECanada’s GoldLeaf Awards, announced Tuesday at the Canada pavilion (thelargest pavilion at the convention). The awards honour companiesand individuals who demonstrated leadership, innovationand financial success in the previous year.The Company of the Year award was presented toVancouver’s OncoGenex Technologies Inc.“With significant financial and product milestones duringThe Ice Cream Social featureda number of speakers,including Ellana, one of themany patients who benefitfrom biotechnology therapies.The conferencehosted a recordnumber ofpartneringmeetings—morethan 17,000—setting a precedentfor future BIO shows.The opening ceremony took place on Tuesday, with more than athousand attendees filling the halls at Chicago’s McCormick place.Summer 2010 Bio Business 9

BIO 2010the 2009 economic downturn, OncoGenex is a perfect exampleof the drive and talent of Canadian firms,” says BIOTECanadaChairman, Brad Thompson.iCo Therapeutics Inc., a reprofiling company focused onredosing or reformulating drug candidates for new or expandedindications was named the Early Stage Company of the Yearin Health.“Both of these firms are stellar examples of Canadian innovativethinking, research and development expertise, and a businessacumen that saw them reach significant developmentmilestones even during a challenging economic period,” saysPeter Brenders, BIOTECanada President and CEO.The Early Stage Company of the Year in Industrial andAgriculture, CO2 Solution Inc., signed a Joint DevelopmentAgreement with California’s Codexis Inc.—a leading designerand producer of super enzymes for harsh industrial processes—moving the Quebec-based biotech’s process closer tocommercialization.The distinguished Dr. Murray McLaughlin, a longstandingfigure in Canada’s life sciences sector, was recognized with theIndustry Leadership Award.“It is a great privilege to be recognized by the industry in thisway,” he says.Finally, Dr. Karen Burke, Amgen, and Dr. James Willoughby,Hoffman-La Roche, were honoured for their work withCanada’s government on an introductory path for subsequententry biologics.A strong Canadian presenceOver the course of the convention, Canada flexed its brain andsocial muscles with presentations and networking events.“While the numbers may not have been as high as previousyears, the conference still afforded many opportunities for networkingand collaboration,” says Sally Greenwood, Director ofCommunications and Education at Genome British Columbia.Dr. Andras Nagy, Dr. Randy McIntosh and Dr. Peter St.George-Hyslop, teamed up on Monday afternoon to present anoverview of Ontario’s innovation in neuroscience and aging atthe Wit Hotel before a social mixer on the rooftop overlookingthe downtown core.The G20Biotech Canadian Soiree took place at ChicagoUnion Station on Tuesday, part of a day of events in conjunctionwith BIOTECanada starting with the Canadian PavilionOpening and ending at Union Station in the company of hundredsof life sciences leaders.Ontario’s Minister of Research and Innovation, John Milloy,spoke at several events, including early-morning breakfasts andlate-night social events, making Ontairo’s presence known.In 2011, the show will be taking place in Washington, D.C.,where current U.S. President, Barack Obama has been asked tospeak. Discussion at the 2011 show will be heavily centred onpolicy, and there are hopes that many senior level governmentofficials will turn out for the convention. BBGeorgia Grows Biosciences IndustrySince Hosting BIO 2009Atlanta to Host Pittcon in 2011More than a year has passed since Georgia showcasedits bioscience assets to more than 14,000 attendeesfrom 61 countries and 48 states at the 2009 BIO InternationalConvention in Atlanta. Since the convention, Georgia hascontinued to experience significant growth in this fast-growing,strategic industry. Georgia’s unbeatable combination ofgroundbreaking research, top-ranked universities, talent,global access, spirit of collaboration and supportive businessclimate continue to attract bioscience companies to the state.More than 300 bioscience companies in fields such as pharmaceuticals,biotech, medical devices and bioenergy callGeorgia home, making it the most industry-diverse state inthe U.S. southeast.One of the most significant developments was theannouncement by Seattle-based Dendreon Corporation. InAugust 2009, Dendreon Corporation announced it wouldlocate a $70 million facility in Union City, Georgia. Thisplant will manufacture Provenge, an aggressive treatment forprostate cancer that recently won FDA approval. In addition,other recent wins for Georgia include Sepmag Technology ofSpain (in-vitro medical devices), Iverson Genetics ofWashington (genetic testing), Qualtex Labs of Texas (bloodtesting), Cancer Treatment Centers of America (hospital), anda number of bioenergy-focused enterprises.Support for biotech entrepreneurs has also increased inthe state with the 2009 implementation of a revised R&D taxcredit that is tied to the federal calculation and can also beused against payroll withholding. Small, innovative companiesnow have a longer time period and greater opportunityto position themselves for success.At the 2010 BIO International Convention, Georgia wasa Double Helix sponsor for the third year in a row. In theGeorgia Pavilion, the state hosted 12 Georgia universities,companies and agencies.“The high-wage jobs created by this industry generateeconomic growth in Georgia and help drive the innovationso necessary to success in the global marketplace,” says KenStewart, Commissioner of the Georgia Department ofEconomic Development. “Our participation in this conferenceis a key component to our long-term strategy to raiseGeorgia’s profile in this sector and attract companies andventure capital to the state.”For more information on Georgia’s vibrant bioscienceindustry, visit www.georgia.org.BioGeorgia staff10 Bio Business Summer 2010

Looking to get that special projectoff your to-do list?Get a head startEvery organization has them—important projects that, because of competingpriorities, never make it off the to-do list. But they have to get done.BioTalent Canada’s BioTalent HeadStart program can help by providing an eager,motivated post-secondary student to carry out your specific assignment—maybea web designer who can finish your company site, or a business student to researchpotential customers. These talented young learners donate their time in exchangefor real-world work experience in the biotechnology sector.What’s in it for you?• Get a project completed at nofinancial cost• Access the skills of a talented student• Find a potential future employee• Help a student become job-readyGet what you need.Apply to the BioTalent HeadStart program today: www.biotalent.ca/getaprojectdoneCopyright 2010. BioTalent Canada is a registered trademark of BioTalent Canada.Funded by the Government of Canada's Sector Council Program

CorporateSocialResponsibilityCanadian biotechs need a firmgrasp on business ethics in theface of growing expectations12 Bio Business Summer 2010

Business ManagementBy Bernadette JohnsonCorporate Social Responsibility.Social Responsibility. CorporateCitizenship. Sustainability. BusinessEthics.The latter is the most all-encompassingterm, according to Chris MacDonald,PhD, who teaches in the department ofphilosophy at Saint Mary’s University inHalifax, and is also the author of a regularblog site, www.businessethicsblog.com.“I almost never use the term CorporateSocial Responsibility (CSR) because itmeans different things to different people.Generally, CSR seems to mean making agood product and treating customers andemployees well, paying taxes on time, andthen doing something for society. Butthat’s only part of it. It’s broader than that.It’s about how a company should behave.Using the term CSR is like trying to usethe word Catholicism to mean all ofChristianity,” he says.“The better term is business ethics—that’s the broadest term. Ethics is not justabout personal integrity, or avoiding conflictsof interest, what it is interested in isfiguring out the right thing to do in theworld of commerce.”Most Canadian businesses are indeedguided by a very broad set of ethical,political and social obligations, amongthem environmental and energy initiatives,community outreach, transparencyand accessibility, safety and security, productstewardship, employee rights and otherbenchmarks.And scientists and biotechs, in particular,need to be especially attuned to thespecific responsibilities outside their officesor lab doors. As their products andtechnologies move from the lab into themarketplace, firms will need to considerbasic business principles and ethics, as wellIs Going Green theLatest CSR Trend?As the public consciousness for sustainabledevelopment, environmental protectionand energy reduction grows, science-basedorganizations are attempting toremain in step. Many businesses—awareof the impact of their operations—areincreasingly initiating campaigns and policiesthat give back. Here’s a look at a fewrecent announcements:University labs harnesstheir own energyAccording to the United StatesEnvironmental Protection Agency, labsuse anywhere from five to 10 times moreenergy than the average office building.Some labs across Canada, and in particular,university labs, are working hard toreduce overall consumption of energy.Sustainability—from the early stages ofconstruction right through to everydayuse—is becoming a central theme in theindustry. The McGill Life Sciences Complex,for one, boasts a green roof (grass-covered)that aims to reduce heat gain andthus the energy spent on internal air heating/cooling.The roof also houses a50,000-litre cistern that recovers water andfeeds it to the toilets throughout the building.The CANMET MTL building, fundedby Natural Resources Canada and underconstruction in Hamilton’s McMasterInnovation Park, will use a solar wall on itsroof to harness the energy of the sun for airand water heating, among other things.Jamieson plants treesWindsor’s vitamin and natural healthproducts manufacturer JamiesonLaboratories recently unveiled a 10-yearcommitment to the Essex RegionConservation Authority to reforest a 121-acre former Carolinian forest, as part of itsnew national, public tree-planting campaign(Jamieson Trees). The property willbe naturalized with more than 72,000seedlings, a number representing approximately10 years of Jamieson’s wood-fibreconsumption. President and CEO VicNeufeld said in a release, “We are passionateabout trees and about giving back to ourcommunity… Our business depends on theplanet’s riches. Trees purify our water andair and they are the raw material for paper.”Jamieson Laboratories currently donatesnearly four per cent of its annual revenue toreforestation and animal-protection projects.Sustainability strategymakes a difference atL’OréalCosmetics giant L’Oréal Canada, ofMontreal, recently reported significantreductions in its greenhouse gas emissionsand water use, as well as improvements inwaste management, following an environmentalperformance assessment. Theimprovements were attributed to a variety ofmeasures including: the acquisition of cleanervehicles and corporate fleet fuel consumption;the recovery of residual energy at thefactory level; the installation of flow limitervalves and timers on washroom faucets andthe optimization of production tool washcycles in the plant to reduce water consumption;and waste reduction through corporaterecycling efforts. In 2008 and 2009, ParisbasedL’Oréal Group was named one of theworld’s 100 most sustainable companies byInnovest and Corporate Knights. This year,on the occasion of Maison L’Oréal’s 100thanniversary, 100 citizen initiatives wereundertaken in communities where the companyis located.as abstract public policy issues (Do weallow human cloning? How do we marketa direct to consumer genetic test? How dowe label it?), and much more.The biotech industry has special challengesfor a variety of reasons, MacDonaldsays. For one, since cutting-edge science isthe name of the game, businesses in biotechmust deal with a phenomenal rate of changeand flux. There are enormous legislativeSummer 2010 Bio Business 13

AWB_BioBusiness_Summer2010.pdf 1 16/06/2010 3:52:36 PMCMYCMMYCYCMYKbridging biology & businessCome to Saskatoon, Saskatchewan, Canada for the ag-biotech conference:ABIC 2010!Be there!www.abic.ca/abic2010Keynotes: Julian Cribb (Cribb & Assoc.) The Coming Famine: Risks and Solutions for Global Food Security; John E. Hamer (Burrill) Global View of Agbiotech: A New Role in Energy and the Environment; Jay Ingram (Discovery Channel) Truth: An InconvenienceKarl Dawson (Alltech) The role of Biotechnology in Nutrition and Food Security; Clive James (ISAAA) Addressing Environmental Sustainability Through Biotechnology; Prem Warrior (Gates Foundation) Agbiotech: The Global Sustainability ChallengeBusiness Managementgaps where there are no laws, he continues,because the issue hasn’t existed until now,or regulatory agencies lack the scientificcapacity to handle them (often becausethey are understaffed and/or not able tounderstand the emerging technology).“The gaps in the law are likely to bemuch larger and much longer in the worldof biotechnology. Biotechs don’t have theluxury that many other businesses have ofbeing able to say, ‘Well, look, business justhas to follow the basic rules, set by governmentor law,’” says MacDonald, citing theinfamous Dolly the sheep, the first mammalto be cloned from an adult somaticcell, in Scotland in 1996.“The phone was ringing off the hook atthe [university’s] ethics centre at that time.And it was another seven years before legislationwas passed in Canada to precludehuman cloning,” he says.Secondly, the set of stakeholders orinterested parties in an ethical issue withinbiotech, is at often much broader than it isin just about any other industry.“If you’re a small Canadian biotechcompany working on transgenic salmon sothat they will grow faster, it is not implausibleto have someone from the other sideof the ocean send you an e-mail that says,‘Wait a minute, I have a stake in this as acitizen of this planet, and you’re changingthe meaning of life’,” says MacDonald.“This is an industry where those sorts ofclaims aren’t or can’t be immediatelylaughed off.”With public expectations of businessvastly different today than they were ageneration ago, especially in terms oftransparency and accountability, biotechsneed to be more proactive in terms of ethics.Compulsory codes of ethics and ethicstraining might be a good start, saysMacDonald. The public has strong feelingsabout whether genetically modifiedfoods are labelled, or whether stem cellresearch is a good or bad thing, he says, soit is not unlikely for them to demand thatbiotechs in Canada be ready to account fortheir decisions.“In 2010, you are expected to be ontop of key ethical issues and be reflectiveof the ethical impacts of your business.Martha Stewart’sImClone ScandalRaises More EthicsQuestionsOne of the largest biotech scandals—orperhaps the most infamous—actuallyhad nothing to do withbiotechnology… or did it?In 2004, after a highly publicized,closely watched, five-week jury trial,media mogul Martha Stewart was convictedof lying to investigators about astock sale and served five months inprison. According to the U.S. Securitiesand Exchange Commission, Stewartavoided a loss of $45,673 by sellingall 3,928 shares of her ImCloneSystems stock in 2001, after receivinga tip from her Merrill Lynch broker.“Martha Stewart’s incarceration hadvery little to do with science. It was agood old fashioned insider training andbusiness integrity issue that broughtImClone—at least in the short run—toits knees,” says philosophy professorand biotech blogger Chris MacDonald.One way to look at it, however, isthat it probably delayed bringing apromising cancer drug to market, hecontinues. “It’s at least plausible thatpeople died over Martha Stewart’sinsider training. Biotechnology is animportant field and there are importantproducts that in this case didn’t get tomarket as quickly as they might havebecause of a lapse in business ethics,just not in the typical, traditional, scientificethics that have dominated the fieldfor the last couple decades.”And if there’s any industry that ought tobe reflective about it, it’s going to bebiotech, which notoriously raises concernsfor reasons good or bad. It raises aset of topics that people care passionatelyabout and where people are going to havean opinion.” BB14 Bio Business Summer 2010

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Q&A with Colette Rivet, ExecutiveDirector, BioTalent CanadaBioTalent Canada helps Canada’s bio-economyindustry thrive globally. As a non-profit nationalorganization of innovators leading our bio-economy,BioTalent Canada anticipates needs and creates newopportunities, delivering human resources tools, informationand skills development to ensure the industry has access tojob-ready people.BioTalent was created in April 1997 in response to a studyon the biotechnology sector. This study proposed a series ofrecommendations to ensure the Canadian biotechnology sectorhas access to the skilled employees it requires. Based on theserecommendations, BioTalent Canada has developed manyproducts and services to meet these HR needs.Bio Business recently caught up with Colette Rivet,Executive Director. Following is an edited excerpt of thatconversation.By Theresa RogersWhat is the most important HR-related issue the industry iscurrently facing?Job-ready, skilled people. In 2007 we did a big survey and it wasclear from that survey that people in these companies realize thatHR is going to be the big issue they’re going to face in the futureand are facing right now. If we look long-term and strategically atwhat is happening in Canada, we have graduates that are comingout of school that are not job-ready and industry will say thatabout most of the schools in Canada.What then is job-ready for this industry?First of all, a lot of children are not studying science anymore sothat’s the first big thing and of course in our sector, even if you’renot going to be doing research, you need to have some basicknowledge of science and you need to start that in primary schooland you need to keep going with it. We’ve also asked the companies,‘What’s job-ready for certain functions?’ so we have some20 Bio Business Summer 2010

Human Resourcesskills profiles that are available to them. It’s a tool employers canuse when they’re hiring in those functions, or for performanceevaluations but it also tells the job seekers what they need to haveto be job-ready and it also tells all the institutions out there whatthey need to be teaching. When you think of business skills, leadershipskills, the silos in our education system don’t work anymore.In our sector we really do need to have them cross-sectoraland interdisciplinary and more and more of the programs need toidentify that.Right now the companies are telling us a third of their positionsare vacant because they can’t find the right talent. In a smallcompany you can’t risk taking on somebody that would not beable to do the function.So for someone out there with all these skills, it’s a good field toget into in terms of job prospects?Definitely, but you have to be job-ready. We’re working with theToronto District School Board and we have helped them developa curriculum, with industry input, for grade 12 biotechnologycourse and now we’re also helping with a continuum from grade7 to grade 12.Then we have our Sanofi-Aventis BioTalent Challenge andwe’ve been supporting this for over 10 years. High school kidsput in research proposals. Volunteers from the communityreview them for feasibility and match them with a mentor intheir region. They do the research and then they competeregionally and nationally and BIO pays for two of our top winnersto go to BIO and compete with the BioGENEius competition.It’s been very successful.We also have the Career Focus program where we provide athird of wage subsidy if the company does two-thirds for a newgraduate who has no experience in biotechnology. When weevaluated that, 100 per cent of those who had completed theprogram, were hired.Do the HR concerns vary in different parts of the country?It’s the same issues. There are some tiny different ones. Forinstance, in Quebec, hiring internationally educated people is abig issue for them and it’s because they’re bringing in Frenchspeakingpeople who don’t speak English and English is thelanguage of business in Canada for biotechnology. The other isin the west. They had problems with too many regulations, theyfelt, to get their companies going. Finding capital is definitelythe top one everywhere, but also it’s related to HR as well. If youdon’t have the funds, you don’t have a lot of funds to hire someone,unfortunately and if you don’t have the right people youcan’t get the funds.The economy seems to be improving now. Are people hiring?Our sector is very resilient. When you’re developing a productyou’re going through billions of dollars and 20-plus years of developmentso they see the highs and lows and they know how to staydown when the shooting is going on. But when we did our bioenergyreport, Generating Opportunities, in September 2009during the economic downturn, there was a definite need forpeople, still. They didn’t have the skills they needed. Especially inbioenergy right now. It’s growing like crazy.You’ve got the two new programs: BioManufacturing and BioSkillsTransfer. Have you had much uptake on those?Very much so. We’ve found manufacturing positions are hard tofill. Right now we’re identifying where the hotspots are andidentifying what kind of skills could be transferred from typicalmanufacturing positions to our sector and then we’re going to goto regions and promote these skills.The other thing we’re doing is these internationally educatedpeople who are looking to be licensed or certified by professionalbodies, we are developing, in liaison with these professionalbodies, some marketing communications activities toshow them that we could use them in our sector while they’rewaiting to get their license or certification and at least they couldkeep some of their skills while they’re waiting. So we don’t needa physician licensed to practice medicine to be able to doresearch or help us with clinical trials.What role do you see for social media?This is the media for youth, and LinkedIn is for business people.It’s the way to be able to connect with everybody. We’re tryingto interest students in science so we have developed a tool on ourwebsite called BioTalent Quest and they get to be a bit moreaware of the skills they need to be able to work in our sector.We’ve done career profiles as well, showing them salaryranges and what kind of work they do in a day, so what we’redoing in these social media is more of that—trying to get themexposed to more of the science behind biotechnology and getthem interested.What is the next five years going to be all about?It’s still going to be all about the supply side, essentially. Andmore tools. In terms of priorities, we’re looking at fosteringstudent interest in science, the Aboriginal peoples, internationallyeducated professionals, and improving the job readiness ofgraduates, so you can see for the next five years, those are reallyour priorities right now.Is there anything else you wanted to mention?I have so much to tell you! One of the things I would like to seeis less duplication of efforts and more leveraging of our fundstogether among different associations and organizations tryingto work in this area. It actually overwhelms the companies.There is so much and they have so few resources to be able todo that. BioTalent Canada being the hub for anything to dowith HR and skills development means companies can go toone place to know about all the resources.In this sector, I find people very sincere and very committed towhat they’re doing so it’s rewarding to be able to help them. BBSummer 2010 Bio Business 21

The ImmigrantExperienceDiverse hiring practices provide bothsocial and economic benefitsBy Jason HagermanAccording to just about every major economic forecastreleased in the last five years, Canada is undoubtedly goingto be faced with a labour shortage within the next decade ortwo. The simple fact, according to Christine Nielsen, Director ofthe Canadian Society for Medical Laboratory Science (CSMLS),is that we cannot produce enough people to work in this country.“It’s going to happen in every sector, and the only way to meetthis demand for workers is through immigrants. Skilled workersfrom around the globe bolster the workforce in Canada and helpthe country stay economically competitive,” she says.Aside from the fact that hiring internationally trained professionalsis quickly becoming a necessity, there are many ways inwhich newly Canadian employees can benefit biotech businesses.Naturally, there are issues Canadian-born workers do not present,but the global community is a diverse one, and mirroring that willcreate inroads to many opportunities.“There is a book called, The Wisdom of Crowds, and the basicthesis is that the more alike we are, the less creative we are,” saysPeter Pekos, President and CEO of Dalton Pharma Services andYORKbiotech board member.According to Pekos, the more diversity you have in a group,the more likely you’re going to have a variety of perspectives atyour disposal, creating value for your company.This perspective is shared by many professionals across thelandscape of the life sciences, and the labour force as a whole.“When you bring in internationally trained biotech professionals,you’re bringing in people who will have a fresh perspective.They’re innovative and will give you ideas about businessprocesses and products, things they’ve seen and done in theirhome country that you can apply here,” explains Brigid Elmy,Project Manager at the Pathways to Employment in Biotechnologyprogram at the University of Toronto (U of T), Mississauga.This program, funded by the provincial government, is a22 Bio Business Summer 2010

Human Resourcespartnership between the School of Continuing Studies at U ofT and the Masters of Biotech program at U of T, Mississauga,and aims to acclimatize immigrant workers to the Canadianbiotechnology workplace through a program of in-class instructionand mentor support. Upon completion, trainees are presentedwith a certificate identifying them as ready for employmentin the Canadian marketplace, taking away some of theuncertainty employers face when assessing an applicant’s suitabilityfor a job.A global market“Diverse hiring is an excellent idea because we are in a globalmarket, we have to go other places in this world to succeed,” saysColette Rivet, Executive Director of BioTalent Canada.The BioSkills Recognition program, which sprung out of a2007 report titled, Recognizing Talent—Capitalizing on the skills offoreign trained professionals for a vital bio-economy, is similar to theU of T program in that it aims to identify skilled internationallytrained workers, break through the barriers they are facing andconnect them to the Canadian bio economy.Immigrants can create an online portfolio that is reviewed bya competency committee comprised of industry experts.“We can then determine if they are bio-ready. If our expertsfeel that the worker is unsure on a technique, we have a practicalobservation session in which the applicant will visit a companyand perform a technique in front of an industry person,” saysRivet. Once confirmed, the profile can be viewed by Canadianemployers, who can be confident that the proficiencies identifiedare indeed up to par. These workers can then help a companydevelop a more globally oriented perspective and break into previouslyinaccessible or difficult to access markets.A reflection of the communityHaving a diverse workforce that mirrors the community you’reworking in is good for business, says Elmy.No case exemplifies this more than Toronto-based DaltonPharma Services. Pekos is a first-generation Canadian. His parentscame to Canada following the Second World War, like manyother immigrants, with hopes of creating a better life for theirchildren.“I have this sense that I need to help immigrants myself, and it’spart of the culture of our company,” he says. “We look to give backin order to repay the wonderful opportunities that I was given.”With over 245,000 individuals relocating to Canada in2008/2009 alone, according to Statistics Canada, there areplenty of chances for Pekos to present internationally trainedprofessionals with an opportunity of their own, and he takesevery opportunity.“About 75 per cent of our employees are new Canadians, andabout 20 per cent of them took their first job here with us,” he says.Since starting out in 1986 as an entrepreneur, Pekos hasgrown his company to 80 times its original size, and operatesaround the globe.“We had a relationship with a Japanese pharma companythat lasted 10 years, until they were acquired. The primary reasonthat they worked with us is that we were not Japanese. Theywere getting from us what they could not get from a domesticsource,” says Pekos.Challenges“One of the biggest barriers to employment for immigrant workersis language,” says Rivet.Elmy agrees. “Culture and communication has been identifiedby employers as what they feel international professionals need inorder to integrated to the Canadian workplace.”The majority of Canadian biotech companies are small, withmore than a quarter employing less than five workers. In thisenvironment, the worker must be well integrated in terms of communicationand proficiency in order to make it as part of the team.Employers simply don’t have the time or resources to coach aperson along.“About 75 per cent of ouremployees are new Canadians,and about 20 per cent of themtook their first job here with us.”Peter Pekos, President andCEO of Dalton Pharma ServicesThis is why programs like the BioSkills Recognition programor Pathways to Employment in Biotechnology and organizationslike CSMLS, the Toronto Region Immigrant EmploymentCouncil, the Greater Halifax Partnership and many others arecrusading for recognition of international professionals.“Some immigrants get caught in a sort of catch-22. They can’tget a job in Canada because they lack Canadian experience,”Pekos says.“Most employers are set on a requirement of Canadian workexperience. How can an immigrant get that experience in the firstplace?” asks Nielsen.Canadian employment history is a sort of safety net foremployers, taking some of the perceived risk out of hiring animmigrant worker. But is hiring a worker from India or China anymore risky than hiring a new graduate from Canada?“Forward-thinking companies are planning for the future, forthe fact that their highly trained workforce will soon retire andthose people need to be replaced. The biggest thing in the futurewill be possessing a global perspective,” says Elmy. BBFor supporting studies and stats, visit our website atwww.biobusinessmag.com.Summer 2010 Bio Business 23

Regional ProfileWork on the University of Arizona’s BioPark began late last year and will bring research facilities closer to campus.Tucson Lights Arizona’s PathTo Personalized MedicineRecent investments by pharma giants Roche and Sanofi-Aventis complementUniversity of Arizona research institutions, spinoffsBy Theresa RogersPersonalized healthcare promises to deliver the right medicineto treat a sickness, eliminating trial and error prescriptionsof expensive drugs that can affect each patient differently.It is the Holy Grail of medicine and everybody wants apiece of the market that is predicted to reach almost $450 billionin the U.S. in the next five years.Making it a reality will require a combination of the rightdiagnostic tools and drugs, backed up by top-flight research fromcorporations and universities, as well as sophisticated productionfacilities, computer systems and medical centres to evaluateknowledge gained in clinical trials and from patient experiences.Tucson, Arizona, is making a strong bid to become one of thecentres where personalized medicine will move from theory topractice. The second-largest city in Arizona has the buildingblocks to make it happen. It is home to Ventana Medical Systems,Inc. (a member of the Roche Group), one of the leading diagnostictool companies in the U.S. Sanofi-Aventis, the third-largestpharmaceutical company in the world, recently invested $61 millionin a research laboratory located in the same business park asVentana. It is the only lab Sanofi-Aventis has built from scratchin the U.S.Local corporations such as High Throughput Genomics(HTG), and Luceome Biotechnologies, whose high throughputassays are used to test drugs, are carving out their niches in thediagnostics business. HTG’s partners include Merck, LuminexCorp., and the John Wayne Cancer Institute.Ventana Medical Systems, Inc., focuses on accelerating thediscovery and development of new prognostic and predictivecancer tests that enable personalized healthcare.Critical Path InstituteTucson is also where the Critical Path Institute (C-Path) coordinatesthe efforts of almost 500 scientists from 30 leadingpharmaceutical companies, patients’ rights groups, representativesfrom the U.S. Food and Drug Administration (FDA), theEuropean Medicines Agency (EMEA), Pharmaceuticals andMedical Devices Agency (PMDA, the Japanese counterpart ofthe FDA), and a bowlful of other alphabet soup agencies to expeditethe development and time to market of pharmaceuticals.C-Path was formed in 2005 as a not-for-profit centre to breakthe logjam in the drug development and approval processes. Dr.Ray Woosley, C-Path’s CEO, notes that about $120 billion wasSummer 2010 Bio Business 27

spent by the industry, the government and universities in 2008,producing only 21 new drugs at $6 billion per drug. “It takes anaverage of 15 years for a new product to go from discovery tomarket,” he says. “It does not have to be that way. Drug developmentfor HIV was done quickly: three-and-a-half years includingclinical reviews. None have been taken off the market.”University of ArizonaTucson’s academic infrastructure is based on the University ofArizona, one of the nation’s leading research institutions. UAincludes the BIO5 Institute, which promotes personalized medicineand development of pharmaceuticals by collaborative effortsof academics and graduate students. It draws on the university’sdepartments of medicine, pharmacy, science, engineering andagriculture, as well as bioinformatics capabilities from the EllerCollege of Management. The university is also involved in promotingelementary and high school science education.The BIO5 Institute also houses the Clinical and TranslationalScience Institute, a $20 million UA project to provide patientsfaster access to laboratory discoveries that could save their lives.BIO5 Institute has spun out companies such as LuceomeBiotechnologies, Cancer Prevention Pharmaceuticals (developerof a drug combination to prevent colon cancer from recurring)and bioVidria, whose silica-based materials improve highthroughput screening of new drugs and diagnostics.UA’s Cancer Center has produced 14 biotechnology, medicaldevices and pharmaceutical companies. It has an annual budgetof $78 million.The UA Science and Technology Park’s Arizona Center forInnovation, a Tucson business incubator for biotechnology companies,brings venture capitalists and experienced business executivestogether with university researchers to bring technology outof the laboratory and into the marketplace.The UA Science and Technology Park is also building aBioscience Park near downtown Tucson that will bring researchfacilities closer to the university campus. The new park will havefaculty and student housing, its own Center for Innovation, ahotel and a conference centre. Work began in late 2009.“The University of Arizona is the largest source of new technologyin the life sciences in the state, and we did not want to seeall that technology leak out to San Diego or wherever it mightgo,” says Bruce Wright, CEO of the Science and TechnologyPark. “Part of our strategy was to capture that technology andkeep it here and to attract other related activity.”That strategy fits into the overall plan for the development ofthe life sciences industry in the region by the Tucson RegionalEconomic Organization (TREO), The Battelle Institute, TheFlinn Organization, and other regional and state organizations.TREO hired Michael Porter, the Harvard business expert, toidentify four key industries that could shape the region’s future.Biotechnology was one, says Joe Snell, TREO President.“Biotechnology, specifically diagnostics, is an area where wehave a unique differentials—Ventana, Sanofi-Aventis, C-Path—The University of Arizona’s BIO5 Institute ensures scientists from fivedisciplines: basic science, agriculture, medicine, pharmacy andengineering, find solutions to biology-based challenges affectinghumanity today.combined with BIO5,” Snell says. “For a small market we have theright ingredients and we are working very hard to get more.”Battelle, commissioned by The Flinn Organization of Phoenix,drew up a roadmap for the state and the southern Arizona regionto help build a life sciences cluster.The plan has paid off. BizTucson, a local business magazine,estimates the region has almost 100 biotech companies withabout 2,000 employees. Walter H. Plosila, Senior Advisor to theBattelle Technology Partnership Practice, said in a December2009 report, Tucson has added 32 life science establishments since2002, for an employee growth rate of 58 per cent. There are 15hospitals with almost 15,000 employees, he said.VentanaThe biggest addition was undoubtedly Roche’s $3.4 billion purchaseof Ventana Medical Systems, Inc., in 2008. Founded in1985 by Thomas Grogan, a pathologist at UA, Ventana hadgrown to almost 900 employees by the time of the acquisition.Roche paid a sizeable premium for Ventana, not least of allbecause its diagnostic technology identifies cancerous cells thatare treated by Genetech’s Herceptin drug. Roche acquiredGenetech in 2008.“We are the global market leaders of tissue based diagnostic,”says Hany Massarany, President of Ventana. “We have 6,000-plussystems installed in 35 to 40 countries and we are growing veryrobustly, and we expect that to continue for the next five years.”Most of the company’s customers are large pharmaceuticalcompanies, biopharmaceuticals, clinical labs and pathology labs inhospitals. “We are growing pretty rapidly and have access now tomany markets where Roche is well established and we are able totap into those markets where we could not as a small or mid-sizedcompany,” Massarany says.“There are about 13 million people worldwide with cancer28 Bio Business Summer 2010

Regional Profiletoday and with an aging population that is expected to expand to27 million by 2030, with 17 million deaths,” Massarany adds.“Obviously it is a big issue. We are very passionate about improvingthe lives of all patients with cancer. We want to change thepractice of medicine so that one day cancer can be fully cured.”Roche says in its 2009 Annual Report, total revenue from itsTissue Diagnostics unit (Ventana) were up 29 per cent to $463million (Cdn.), and that Ventana’s immunohistochemistry (IHC)reagents for cancer research racked up a 28 per cent growth insales to $255.4 million (Cdn.), the second-best seller of Roche’sdiagnostic products.As Massarany and other Ventana executives explained duringa tour of the company’s facilities, the company is aiming for theday when its assays will be used with Herceptin treatments developedby Genetech for breast and gastric cancer. That is the roadto personalized medicine, and the reagentsand equipment from Ventana will be keyto making it happen, in the company’sview.“In one fell swoop when Roche boughtus, they completely revalued diagnosticmedicine,” says Grogan, who is now scientificadvisor to the company he founded.“Why should they pay $3.5 billion forlittle old Ventana? What they have atstake is closer to $50 billion a year.”Eric Walk, Ventana’s Senior Vice-President and Chief MedicalOfficer, says the industry’s goal is to improve the low response totreatments by identifying patients who will respond positively toa drug and treating them preferentially. “Rather than have only‘one size fits all’ strategies, the new model is predicated on a newgeneration of diagnostic tests” which will target specific diseases,Walk says. “Diagnostics become the companion to pharmaceuticalcompounds, so the low response rate can be increased to 70 or80 per cent. These days everyone is talking about companiondiagnostics in healthcare,” he adds.As a homegrown success story, and now a central part of amultibillion-dollar international brand name, Ventana obviouslyhas major impact on the local economy and the life sciencesindustry. One company that has clearly been affected is HighThroughput Genomics (HTG), a privately held business that wasstarted in 2001 in an old drugstore in Tucson by Bruce E.Seligmann, PhD, an internationally recognized scientist. Beforehe started HTG, Seligmann had worked for Ciba-Geigy(Novartis) and Selectide (another UA spinoff which Sanofi-Aventis eventually acquired.)High Throughput GenomicsHTG grew slowly as a research company until January 2008,when Tim (TJ) Johnson became President and CEO. Johnsonhad previously been a Senior Vice-President at Ventana, responsiblefor manufacturing, quality, strategic marketing, corporatedevelopment, and product technical support.Tucson is making astrong bid to becomeone of the centreswhere personalizedmedicine will movefrom theory to practice.At HTG, Johnson completely changed the management team,and redirected the company from a “broad-based life science toolsbusiness to more of a personalized medicine company,” he says.“Our growth strategy is pretty simple,” Johnson says. “Wefocus on segments where we have distinct competitive advantages:validation, pre-clinical and clinical. Where we have a competitiveadvantage and differential values is in fixed tissues.”Clinical testing is growing rapidly, especially in oncology,which depends primarily on fixed tissue samples. Johnson believesthat HTG can grow to $50 million in five years. “It will take agood test for prostate or colon to get to that kind of number,” hesays. “I am learning from Tom [Grogan]. I want to build a mini-Ventana.”Merck has invested $10 million in the new HTG. LuminexCorporation, a leader in biological testing technologies, launchedin partnership with HTG a jointly developedgene expression product, qBeadGene Expression Assay, in May 2010.According to Johnson, the product canquickly and accurately measure a select setof genes among many samples. Luminexplans to market it to researchers.In April 2010, HTG and the JohnWayne Cancer Institute agreed to jointlydevelop a novel mRNA signature to distinguishbetween early stage melanomasand benign nevi.HTG is also part of a $40.8 million research program led byArizona State University to develop systems for the U.S.Department of Health to detect an individual’s exposure to radiationin the event of a nuclear or radiological incident. The systemwould give first responders critical information in the case of adisaster.FundingThe combination of public and private support for life sciences inTucson is bringing much needed good news to this city in theheart of the Arizona sunbelt. One ongoing challenge Tucson facesis the relative lack of venture capital in the city and even the state.Harry George, Chairman of HTG, is a native Arizonan and leadsa VC firm that has made investments in a number of companies.The private group Desert Angels provides money and managerialexpertise to startups. Big pharma is also a source of funding—lookat HTG, Ventana and Sanofi-Aventis.The best funding news recently is the launch of the “ArizonaFund of Funds,” spearheaded by George. The goal of the fund isto attract and oversee the investment of as much as $200 millionto benefit Arizona’s promising, innovative businesses. The programraises investment capital from investors who commit toinvest in early-stage Arizona companies, and reinvests those fundsin several professionally managed target venture funds. The hopeis that with this new effort, Tucson should be able to attract moreventure money. BBSummer 2010 Bio Business 29

Taking Your Company PublicEverything you need to know about an IPOBy Martin E. AquilinaThe decision to go public should not be made lightly, as aseamless transition to a publicly traded company requires acareful analysis of one’s enterprise and the coming togetherof a variety of actors. The benefits of going public are significant,but financing a corporation via an Initial Public Offering (IPO)may not be the best method of securing funds in every situation.Benefits of going publicAn IPO provides a company with the influx of cash required togo forward in a new direction, or to solidify its position in themarket by investing in capital assets, additional human resourcesor research and development. While proceeds from an IPO canbe used to repay or refinance existing debt, if this is an importantstated use of proceeds, the IPO is likely never to get off theground.Going public, however, does provide other benefits. In particular,by creating a public market for a corporation’s stock, an IPOresults in liquidity for its founders, employees and investors.Increased liquidity allows a company to use its stock as an alternativecurrency in future mergers and acquisitions.In addition, it is often argued that going public has other lesstangible benefits for a corporation’s culture and image. Havingliquid shares with an easily ascertainable market value, for example,may make it easier to attract executives with stock options andstock purchase plans. Employees with stock in the corporationhave an added incentive to focus their energies on the growth ofthe corporation.In terms of corporate image, the very fact that a company isgoing public generates free press as investors and the financialcommunity focus their attention on the issuer, raising its profile.In addition, suppliers and creditors may see public companies asmore “serious” businesses presenting a lower credit risk, as there isa greater chance that the firm will remain stable in the long term.This may result in more favourable terms for the company indealing with such parties.Drawbacks of going publicGoing public requires a corporation to take on additional burdens,particularly with respect to reporting and auditing. At a minimum,annual and quarterly financial statements, managementdiscussions and analyses, press releases and material changereports, where necessary, must be prepared and filed with regulators.Becoming a public corporation also usually adds complexityto operations because of the necessity for internal controls, theadequacy of which must be periodically certified by the company’sCEO and CFO. As a public company, there is of course increasedexposure to litigation by shareholders, particularly as a result ofalleged misrepresentations in public disclosure documents, includingthe prospectus itself.There is some concern that a private corporation will losesome of its competitive edge by going public, due to the fact thatreporting requirements could make confidential information public.While it is likely that more information will make its way outinto the public sphere to competitors and suppliers, it is importantto bear in mind that many of the important numbers, such as supplycosts and employee remuneration are driven by market forcesrather than internal strategy.The clearest drawback to going public is the possibility thatcontrol of the corporation will be lost through a takeover bid.Barring such a drastic outcome, the existence of a large shareholderownership group necessarily places different pressures onthe corporation. Meeting and managing shareholder expectationscan be difficult, particularly with respect to building long-termgrowth at the expense of short-term profitability; shareholdersmay not have the patience that the previous ownership group had,and may well demand the paying out of dividends at the expenseof reinvestment, for example.The IPO process itself can be quite onerous, particularly forthe directors and officers of the corporation. It can easily take upto five months to complete, and consists of tasks that cannot easilybe delegated by the highest levels of management. In addition,there are substantial costs associated with the IPO itself, mostnotably the underwriters’ remuneration, as well as legal and auditingfees.Finally, although going public increases the liquidity of stocks,there will be restrictions placed on the ability of those with insideknowledge of its operations, including directors and officers, tosell their shares. Entities which possess significant stock holdingswill also be constrained in their ability to transfer or sell shares.A company that places a very high value on maintainingoperational control, or that may not wish to wade into the watersof managing shareholder expectations, might want to think twicebefore embarking on an IPO.Preparing to go publicGenerally, IPO candidates need to demonstrate growth and con-30 Bio Business Summer 2010

Financingsistent earnings before they will be seriously considered by investors.The prospect for growth will be of particular interest tofuture shareholders.A firm should also have a reasonably strong managementteam, as these persons will be on the front line generating investorconfidence and sculpting corporate image leading up to an IPO.Strengthening and diversifying the corporation’s board is a step toconsider, as bringing in a range of expertise will likely be regardedpositively by prospective investors.Preparing for the IPO process should start at least one yearbeforehand. This includes gearing up for the increased reportingand auditing requirements that will become part of the necessaryroutine once the company is publicly owned. Annual auditsshould be performed and efforts should be made to gather thetype of financial information that will be required of the companyto go public.Going public will require the co-ordination of a number ofparties, and it is never too early to begin to make connections andbuild relationships with people with the expertise to make theprocess run smoothly. In particular, the corporation will requirethe services of underwriters, auditors, lawyers and a motivatedmanagement team. The right underwriter will likely be the mostimportant player in the IPO process, as it can provide invaluableinsight, not only on the correct valuation of an IPO, but on themarket conditions with respect to the corporation’s line of business.Timing can be a tricky matter to determine, as investormarkets can heat up and cool rapidly; an underwriter with knowledgeof the market will be key to the success of an IPO.The Canadian experienceIn terms of life sciences IPOs in the past number of years, theCanadian experience has been lacklustre. An investor focus onenergy and commodities, and a rash of poor drug trial results hasresulted in there being only nine life sciences IPOs in Canadasince 2007 (excluding Neuromed Pharmaceuticals’ listing onNASDAQ in the fall of 2009).The situation has been much better in the United States, witha number of companies slated to make IPOs in the upcomingyear. There is, however, reason to keep an eye on Canada, as thereare a few Canadian companies set to appear before United Statesor European regulators to gain approval for commercial productionof their pharmaceutical products. Success by one or more ofthese companies could see investors soon flocking to bio business,and heating up a market that has certainly been cold of late. BBMartin E. Aquilina is a partner at Gowling Lafleur Henderson LLP.Summer 2010 Bio Business 31

IP & Patentingargue that this represents nothing more than clever wordsmithingto circumvent the prohibition, while achieving the same result. Anissued patent encompassing an isolated gene could be used tostifle research. Few molecular biology lab techniques could becarried out without “isolating” a gene of interest.One ground for attacking the validity of the Myriad patentswas that the subject matter is neither new nor inventive, since thegenes already existed in nature at the time of their “discovery.”This line of reasoning overlooks that the gene sequences and theirlink to breast cancer had not previously been known. Nevertheless,in Europe, Myriad’s patents were revoked in 2004 for lack ofinventive step. In 2008, the same patents were restored but withreduced scope.The American Civil Liberties Union commenced proceedingson May 12, 2009 to have Myriad’s claims to isolated genes in theU.S. patents invalidated for encompassed non-patentable productsof nature. Claims to diagnostic methods were also attackedon the grounds that the step of comparing a sample DNAsequence to a reference to find mutations encompassed non-patentablemental processes of a person.In the March 29, 2010 decision, Justice Sweet determined thatthe issue boiled down to whether or not the subject matter of theclaims was patentable:DNA represents the physical embodiment of biological information,distinct in its essential characteristics from any other chemical found innature… DNA’s existence in an “isolated” form alters neither thisfundamental quality of DNA as it exists in the body nor the informationit encodes. Therefore, the patents at issue… are unsustainable as amatter of law… Similarly, because the claimed comparisons of DNAsequences are abstract mental processes, [the method claims] also constituteunpatentable subject matter.In short, isolated genes were found to be non-patentablebecause they allegedly do not differ fundamentally from genes intheir natural state. In dealing with the claims to diagnostic methods,the judge ignored legal precedent indicating that diagnosticdeterminations are not abstract mental process when the informationis not immediately evident upon simple inspection.Whether or not one approves of Myriad’s conduct or theCourt’s reasoning, two points are undeniable. Firstly, the Myriadtechnology is medically significant. Secondly, knowledge pertainingto disease-association is not equivalent to the discovery of agene sequence as it occurs in nature. The latter point bears repeating:Information regarding a gene’s link to disease cannot beinferred from a sequence in the absence of arduous and costlyexperimentation.At stake in the controversy is nothing short of the future ofgenetics-based healthcare. It is intriguing that gene-related patentscan provoke public outrage, while patents for drugs (whichoften regulate genes) are readily accepted by the public. If upheld,the finding in the Myriad case that isolated genes do not constitutepatentable subject matter would remove a major commercialincentive for pursuing private sector research in molecular medicine.Without the capacity to protect the intellectual property ofgenetic inventions, researchers motivated to uncover genetic predispositionsto disease will have fewer opportunities to commercializediscoveries. Exemplary companies and discoveries resultingin patent applications are outlined below.Age-related macular degeneration is a progressive conditionresulting in blindness. Determination of an individual’s inheritedrisk of developing age-related macular degeneration is a desirabledetermination not only for families with a genetic link but also tothe general public. ArcticDx, Inc., a molecular diagnostic companybased in Toronto, has developed a detection method basedon intellectual property rights such as those outlined in U.S.Patent Publication No. US/2009/0263801 to Duke University,published on October 22, 2009 entitled Phenotype-GenotypeRelationship in Age-Related Macular Degeneration. This patentapplication describes a gene variant indicative of the risk of earlyonset neovascular macular degeneration and a method of assessingrisk. Early detection of macular degeneration could slow thedegenerative process if appropriate therapy can be delivered in atimely manner.Inheritance has been shown to play a role in the developmentof colorectal cancer. U.S. Patent Publication No. 2010/0047782to Cancer Care Ontario of Toronto and McGill University ofMontreal published February 25, 2010. The application, entitledAssessment of Risk for Colorectal Cancer, describes a method foridentifying an individual who has an altered risk for developingcolorectal cancer. The method involves detecting one or more ofa number of identified single nucleotide polymorphisms (SNP)indicative of a propensity for colorectal cancer. The discoverywas made using genomic DNA samples from patients aged 25to 74 with familial or sporadic colorectal cancer. By developinga test to determine the individuals carrying a susceptibility tocolorectal cancer, the benefits of early detection and treatmentcan be realized.Ovarian cancer is a significant cause of mortality in women.Granulosa tumours represent a form of ovarian cancer that is besttreated with surgery. International Patent Publication No.WO/2010/040204 to The British Columbia Cancer Agencyentitled Detection of Granulosa-Cell Tumors was published April15, 2010. The application describes the finding that a geneticmutation in tumorous tissue can be used to discriminate granulosatumours from other cancerous tissues. Such a method ofdetection would have benefits in determining treatment mode.Commercial development of genetic testing methodologiesrequires the investment of resources far beyond those required tomake an initial discovery. Without the downstream promise of aproprietary position through patenting, how can the public expectinvestors to commit resources to the development of commerciallyviable products? BBGraeme Boocock is a Technical Advisor and Patent Agent Trainee atthe Ottawa office of Borden Ladner Gervais LLP. Kathleen Marsmanis a Patent Agent and Partner Trainee at the Ottawa office of BordenLadner Gervais LLP.34 Bio Business Summer 2010

ProductsValue-Priced Moisture AnalysisOHAUS announced its expanded lineup of MB Series MoistureAnalyzers. The new additions combine high quality and durable constructioninto sleek, compact designs. The MB45, MB35, MB23 and MB25Moisture Analyzers offer pharmaceutical, chemical, food and researchlaboratories consistent moisture testing, with high precision readabilityand strong test repeatability. The flagship MB45 boasts readability of0.001 g, repeatability of 0.015 per cent, and sample capacity of 45grams. It can display text in five languages—English, Spanish, French,Italian and German. Utilizing an integrated database, the MB45 SeriesMoisture Analyzer can store up to 50 drying procedures to maximize productivity.Simply recall the test from the analyzer’s memory and begin.www.ohaus.comDesign Your Own ValvesCustom-manufactured pneumatic selector stack valves that canhandle multiple flows, in multiple directions and with multiplemedia, are available from Conant Controls, Inc. The valves canbe manufactured to specification from a variety of materialssuch as aluminum, brass and 316 stainless steel; with O-ringsand sleeve materials to handle various media and designsranging from one input to nine outputs and vice versa. Stackingarrangements can range from two to six high and port sizesfrom ¼ inch to ¾ inch. Applications range from manual backupsin process control to manufacturing systems and individualproduct mixers.www.conantcontrols.comUnder PressureQ LABTECH introduced the Q-Tube, a safe pressure reactor featuring apressure-release and reseal system that prevents accidental explosionsdue to over-pressurization. The Q-Tube has 200 psi working pressure andis used in applications where higher yields, cleaner products, and fasterreactions are desired such as organic synthesis, inorganic synthesis, catalytichydrogenation, polymerization and high pressure and high temperaturehydrolysis. Q-Tube has higher reproducibility than a microwave synthesizer,plus has higher and cleaner product yields. It is also greener,with an energy savings of 92 per cent(energy reduction) and 150 gallonsof water per refluxed reaction.www.qlabtech.comShortened Stroke LengthBenchmarked against leading pipettes, the BrandTechScientific Transferpette S pipette provides optimizedcomfort and performance with traditional design. TheTransferpette S is constructed from composite materialsfor greatly reduced weight and superior autoclavability.Features include one-handed volume adjustment,simple disassembly for cleaning and covered IDlabel. Easy Calibration technology ensures fast in-labcalibration adjustments without tools for ISO/GLP compliance.The stroke length is the shortest among premiumpipettes—as much as 40 per cent shorter than similarproducts, to reduce the chance of repetitive stressinjuries. Fixed and adjustable models are available involumes ranging from 0.1µL to 10mL and they arecompatible with leading brands of tips.www.brandtech.comL I S T O F A D V E R T I S E R S & W E B S I T E SAg-West Bio.................................................Page 14............................................. www.abic.ca/abic2010BioTalent......................................................Page 11, 19................................................ www.biotalent.caBrain Tumour ...............................................Page 26.................................................www.braintumour.caCSMLS.........................................................Page 32......................................................... www.csmls.orgEppendorf.....................................................Page 4, 39................................................www.eppendorf.caFisher Scientific............................................Page 2........................................................ www.fishersci.caNaturejobs....................................................Page 31................................................www.naturejobs.comVIDO............................................................Page 40............................................................www.vido.orgVWR.............................................................Page 15, 35..................................................... www.vwr.comSummer 2010 Bio Business 37

In PersonScott CormackPresident and CEO of OncoGenex, presses ahead witha strong balance sheet and a strong industry partnership’m a big believer in balance, as downtime allows one to“I think. Without downtime, it is easy to get stuck in dailyexecution without pulling back and evaluating the big picture.Constant assessment of the big picture is, in my opinion,critical to success,” explains Scott Cormack, President andCEO of OncoGenex, BIOTECanada’s 2010 Golf LeafCompany of the Year.There have been times, as with the majority of companiesin the life sciences, when funding was scarce and, accordingto Cormack, the company flirted with zero cash, but effectivebusiness decision-making has always prevailed. In 2007,facing a limping market, the company executed a reversetakeover of Sonus Pharmaceuticals, becoming a publiclytraded company.“This was paramount in our ability to sustain during turbulentmarkets,” Cormack explains.Two years later, the company signed a worldwide collaborationand license agreement with Teva PharmaceuticalIndustries Ltd., which supports the final stage of developmentfor OncoGenex’s lead product candidate. That same year,Cormack was presented the Ernst & Young Entrepreneur ofthe Year Award.Keeping a strong partnership with the Vancouver ProstateCentre, where three of OncoGenex’s products have beendiscovered, has also helped the company survive.“Enough can not be said about the Prostate Centre andthe team there. Rather than establishing a costly researchfacility, we continue to contract back to the centre, which hasresulted in a remarkably financially efficient businessmodel,” Cormack says.He offers encouragement to other potential entrepreneurs:“Stick with it and continue to believe in what you are doing.This is an endurance test, rarely rewarded with instant gratification.To us, improving patient survival, quality of life anddisease management is a noble cause, and worth the frustrationsand challenges.”38 Bio Business Summer 2010

www.eppendorf.com/advantageGet Eppendorf quality today!5 yearwarrantyFREE!40%off secondrotorXXXX-A1XX © 2006 Eppendorf AG012.C4.104.D © 2010 Eppendorf AGPerformance you can count on!Eppendorf Multipurpose Centrifuges 5804/R and 5810/R promotion packagesEppendorf centrifuges 5804/R and 5810/R with their renownedquality and reliability offer you cost efficient solutions for yourmedium to high-throughput applications—now and in the future.Whether your applications require spinning many tubes at atime or centrifugation of larger volumes at high-speed, thesemultipurpose centrifuges with their variety of rotors and adapterscover virtually any application in tubes, flasks and microplates.Choose the right model for your application:l Compact multipurpose models 5804/5804 R—ideal forapplications in deepwell plates or for high-speed centrifugationof volumes up to 100 ml.l Versatile models 5810/5810 R—in addition to high-speedcentrifugation of larger volumes these workhorses alsoaccommodate large swing-bucket rotors to fulfill all highcapacityneeds in tubes and plates.Product Features and Benefitsl Large rotor selection and speed up to 20,800 x g (14,000 rpm)for a wide range of applicationsl Quiet operation to benefit your work environmentl Low profile for ergonomic loading and unloading of rotorsl Soft-touch lid closure for ergonomic lid lockingl Maximum placement flexibility due to 120 V power supplyl Saves up to 35 user-defined programsRefrigerated versions 5804 R and 5810 R also feature:l Environmentally friendly CFC-free refrigerantl FastTemp function for fast and accurate pre-coolingl Standby cooling keeps set temperature when lid is closedl ECO shut-off engages after 8 hours of non-use to reduceenergy consumption and extend compressor lifel Built-in condensation drain to eliminate water accumulationl Patented, dynamic compressor control (DCC) for extendedcompressor life and energy savingswww.eppendorf.com • Email: info@eppendorf.comIn the U.S.: Eppendorf North America, Inc. 800-645-3050 • In Canada: Eppendorf Canada Ltd. 800-263-8715

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