Prime Pump of Biotech Research, Gap in funding impedes growth of sector, says Dr. Robert Bell

Toronto (Sept. 12, 2006) - When I was a high school student, I was fortunate to get an excellent summer job working at one of the Big Three automobile engine factories in Windsor.

Each machine was simple to run and I needed minimal training to operate them. Today, though, highly trained workers with great team skills are needed to operate the "lean" manufacturing processes that have developed in the automobile sector.

This change has been paralleled by a change in the regional resources necessary to support a vibrant automotive manufacturing industry, such as a full complement of parts manufacturers and transportation networks to allow for "just in time" delivery of parts.

In addition to industrial infrastructure, the region also must offer excellent social programs, effective worker injury insurance, public health care, and partnerships with local universities and colleges to train the next generation of auto workers.

These industrial and social investments create a cost-effective environment for international capital investment, what Michael Porter of Harvard Business School has described as a regional "cluster" of interconnected social and private investment. Ontario's success in the auto industry can serve as our model as we develop a regional cluster of international biomedical expertise.

To develop a thriving biotechnology industry in Ontario we need a targeted approach to health commercialization. We should take full advantage of the unique integrated resources in Ontario's universities and research hospitals to develop new and better products for the global health market.

Investments by the provincial and federal governments in the biotech sector are impressive. The Canadian Foundations for Innovation (CFI) with matching provincial funds has allowed universities and research hospitals to make major investments in new laboratory facilities.

On University Ave., for example, CFI grants have provided us with the means to outfit the Toronto Medical Discovery Tower, an important part of the MaRS complex. These new laboratories, combined with the federally funded Canada Research Chair program, have allowed Ontario to recruit and retain health scientists at an international level for the first time in recent memory and provide them with leading-edge tools. MaRS is part of the kind of multidisciplinary supportive regional cluster that Porter describes as necessary to develop a knowledge-based economic sector. MaRS brings academic researchers, intellectual property lawyers, venture capital organizations and early stage biotechnology companies together in a setting suitable for the development of biomedical products.

Ontario has another critical element for developing an international biotechnology centre: strong, publicly funded research hospitals that are seamlessly integrated with Ontario universities. Toronto has the potential to lead all North American cities in the ability to move discoveries out of the laboratory. Our research hospitals offer a vertically integrated system where patient needs can be identified in the clinic, biological specimens can be gathered and tested in the pathology suite, and gene and protein targets identified for drug development or novel treatments in our laboratories.

The recent investments made in our laboratories, such as the technology for rapid screening of biological specimens for identification and differentiation of stem cells, and drug development facilities will allow us to provide commercially viable products for testing in our large clinical setting.

There is, though, a missing element in the development of a commercially viable biotechnology industry in Ontario. We need an alternative approach to funding that supports early stage development of health products.

Our scientists receive grants to operate laboratories from federal agencies and charitable organizations, but granting agencies do not generally support the work that goes into developing a commercial product.

Private sector funding sources generally seek to maximize their returns by investing in research that will pay off sooner rather than later, which does not necessarily nurture early stage concepts. Private sector funding also demands a more structured project management approach to research development, something usually not found in the academic environment.

Our research hospitals harbour a wealth of knowledge suitable for early stage development. What's needed is focused investment that allows potential products to move further down the development pipeline to the point where they reach a level of risk suitable for private sector investment.

The good news? Most elements are in place to create a major locus of biotechnology productivity here in Ontario. The missing piece is the "pump priming" funding necessary to encourage the development of teams of scientists and project managers in our hospitals and universities which concentrate on applied research evaluating new health products rather than focusing mainly on discovery research. Such focused funding is similar to but much less costly than government incentives offered to automotive companies to locate new plants in Ontario.

With a concerted effort, Ontario's research hospitals can be better utilized to develop the biotechnology industry. Leaders of the research hospital sector need to adopt project management style funding to stimulate very early stage commercial development. We also need to ensure that project-management processes are in place to identify and develop potentially valuable new intellectual property within the research hospital environment.

When we hit home runs by developing effective new therapies, our patients will benefit,the provincial economy will improve, we will attract and retain talent, and universities and research hospitals will have a strong case for additional funding so they can continue pushing the envelope.

Dr. Robert Bell is president and CEO of the University Health Network.

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