Building a Sustainable Life Sciences Sector in Canada
President & CEO
In the fourth episode of our fourth season, our host Peter Brenders talks with Gordon McCauley, President and CEO of adMare BioInnovations in Vancouver, about building Canadian life sciences companies, scaling up existing companies, and training the next generation of business and scientific leaders.
LIONA DOMINO (LD):
From the National Pharmaceutical Congress, this is the NPC Podcast for May 19, 2021. The NPC Podcast is about discussing and considering the purpose, process, and people of the pharma industry during the time of Covid. Today, let's continue our health care conversation by answering questions from listeners just like you. This program is presented in cooperation with Impres, Canada's next generation commercial partner. The industry is rapidly evolving, and Impres is designed to help you evolve with it. Learn more about Impres tailored best in class solutions at www.impres.com.
On today's NPC Podcast, our guest is Gordon McCauley, the President and CEO of adMare BioInnovations in Vancouver. Your host today is Peter Brenders, but first, from our state-of-the-art podcasting facility in Toronto, here is Mitch Shannon, the CEO of Chronicle Companies.
MITCH SHANNON (MS):
Liona, thanks for that state-of-the-art introduction. So, what does it mean to be an innovator? Innovation is one of those words that's easy to use and often impossible to deliver on. Innovation takes talent, vision, commitment, and never forget, somebody's cash. Gordon McCauley of adMare BioInnovations creates new companies. adMare has brought more than $1 billion of investment to 20 Life Sciences companies, which means they get to keep using the word innovation.
Here's Gordon in conversation with Peter.
PETER BRENDERS (PB):
Welcome to the NPC Podcast. I'm Peter Brenders, your host. In our continuing look at the purpose, process, and people in pharma in Canada, this episode takes a look at building a Canadian Life Sciences industry.
Joining us today from Vancouver is industry expert and Canadian champion Gordon McCauley, President and CEO of adMare BioInnovations. Welcome to the NPC podcast, Gordon.
GORDON MCCAULEY (GM):
Thanks Peter, delighted to be here.
Okay, let's start with the question our listeners just had when hearing that intro. adMare what?
adMare BioInnovations is Canada's national life sciences venture. And we exist for a really simple reason. And that is that Canada has extraordinary research infrastructure. We punch well above our weight in the kind of scientific research we do in the life sciences on any metric, and there are lots of them. On any metric, we punch well above our relative rate. What we've done a lousy job of is translating that into a sustained life sciences industry, and that's why adMare exists.
We are here to realize our vision of Canadian life sciences leading the world. So we do that really three ways, and they're all interconnected. First, we try and identify really compelling research in Canada, pull it together, and build companies of scale out of that, and the team has a great track record in doing so. Secondly, we try and help existing companies scale up. And then thirdly, we try and train the next generation of both scientific and business leaders in life sciences.
Okay, so that's a cool, cool goal and mission, I hear that. So translate research into companies of scale, help those companies scale up, train the leaders. Alright well, let's talk about each of these a little bit more, so I can understand them a little more clearly. So first, let's talk about that "translate research into companies of scale."
So what is this helping researchers translate their research involve? I mean, do you just help them create a company? Or do they give up their academic life and now become an entrepreneur?
This is about creating the most compelling companies we can. So the first thing to understand is that we are a very commercially minded organization, we're thinking about how to build a company of scale. And absolutely, the founding scientists, the people that discovered the technologies are critically important to that. But we've also got to think about what is ultimately fundable, what investors will put money into, and what can actually make, make it to the commercial marketplace at the end of the day, how do we actually sell products?
So we have a team of experts here in Vancouver and in Montreal who have really compelling track records of identifying early science and building it into a company, adding all the pieces that are necessary and taking it all the way to the marketplace. There aren't many organizations in Canada, where every person on the leadership team has been involved in taking something from the proverbial bench to the bedside.
What are your definition or your metrics for upscales? Is it jobs metric? Is it a financing target, lab space?
I believe deeply that for us to succeed as a country in life sciences, we need to approach every company with the attitude that we want it to grow and exist and be a fully integrated company in Canada. Now, look, I'm not naive. Obviously, that's not going to happen every time. But it's really important as a business philosophy to just start with that perspective in mind. It's much like everybody says in developing a drug, you start with a label in mind and understand what is actually going to be approved at the end of the day, and work back from that. It's the same thing with a company. Think about the commercial company, and then work your way back.
So when I talk about a company of scale, it's not enough to have one molecule or one shot on goal, you need to have either a platform that generates various technologies repeatedly over time, or you have to have a collection of molecules that make sense thematically as an investment hypothesis, so that you can attract the capital you need and truly build a sustainable company. That's what our objective is.
So take me to your second objective then, helping those companies that are already out there scale up. You know, how do you help companies scale up? And what's your target level of scale up?
So let's start with the dirty little secret of companies in Canada. Canada leads the world on a relative basis in creating companies. We lead the world on a relative basis in starting university-based companies. So the old just not about Canadians not being entrepreneurial enough, is just not true.
However, if we're leading the world and creating companies, and we don't have a sustainable industry, on the other hand, it tells you there's a problem in there. So it tells you, maybe we're creating the wrong kinds of companies. Maybe we're creating companies too early. But certainly we have to think about, okay, we've got an interesting company that someone's created, how do we scale it? How do we help them grow? So we do that a whole bunch of ways. We provide capital, we're probably the largest seed investor in life sciences.
Secondly, we provide space. So our facility in Montreal has 150,000 square feet of lab space, commercially focused and appropriate lab space, that is home to 40 some odd biotech companies from anchor companies in the making, like repair therapeutics, to small three and four person companies. Our facility here in Vancouver has 40,000 square feet of purpose-built laboratories, some home to our own proprietary labs, but also to about 10 emerging companies.
And then the third thing we do is provide expertise. And we typically do that through programmatic efforts, like in Montreal, an accelerator that is a combination of expertise, business expertise, science expertise, drug development expertise, to help those companies realize what they need to do.
You’re listening to Gordon McCauley, President and CEO of adMare BioInnovations.
So you're gonna help these companies scale up. But let's not kid ourselves. I mean, won't they simply be bought by those cash rich global companies looking for new assets? I mean, it seems to have happened in every other industry. Why do we think it won't happen in life sciences?
Nobody said it won't happen. In fact, there are a lot of cash rich Canadian companies today as well. I think the objective is to build companies and allow them to scale and help them put down roots in Canada. Over time, as I said earlier, I'm not naive. Obviously, some of those companies are going to be bought out. There's two things I think we want to think about from a public policy perspective.
The first is, do we create enough of a foundation of that company in Canada that the expertise exists so that the company stays? The reason that Amgen exists in Canada, and has a research enterprise in Canada, is that there was a large congregate of truly qualified, globally relevant researchers here that refused to move, the companies that Amgen acquired actually ultimately stayed in Canada.
The second thing we need to do is think about how do you help those companies put down business roots here in a way that makes it hard for them to move? The technical term is how do you make them sticky? Maybe that's around bio manufacturing, that we've heard a lot of talk about, maybe that's around specialized expertise or specialized infrastructure, such as a company called Abdera that we recently created in the radiopharmaceutical space that takes advantage of Canadian leadership in radio pharm and Canadian infrastructure in radio pharm that makes it increasingly less likely that a company would leave here.
We're not naive, obviously, some of those companies are going to go other places. But you want to see two kinds of outcomes. You want to see sustainable companies in Canada that stay in Canada. And you want to see companies that even if the ownership ends up somewhere else, the mind and matter and drive of the company stays in Canada because there are elements of Canada that keep it here.
That's a good set up to your third pillar now that I'm thinking that through because we're talking about people really at the end of the day, that stickiness is there, and training your leaders I'm sure then must be part of the adMare plan. So tell us about your efforts on this one.
Absolutely. The three pillars are absolutely interrelated. And the adMare Academy through which we do all of our talent development efforts has been a tremendous success. I'm really proud of the team and the work that they've done. We have a handful of programs, they're really two flagships.
The first is the Executive Institute, which we created with significant financial support from Pfizer Canada, I must say, which is focused on identifying future executives in this industry. So if you think about all these companies we're creating or trying to scale up, we need to make sure there are people that are going to lead them. And one of the challenges if you don't have that industry today is you have a reasonably limited universe of prospective C suite people. So this is a program that we created three years ago now, that is a focused, it's like a 10 month working MBA for mid career people. They have to have 10 years of experience. And it meets five times over the course of that 10 months for three days each. There is a ton of work in between sessions. It's a pretty intense process. We do it in partnership with the Center for Creative Leadership in North Carolina, which is consistently ranked number one or two in the world for leadership training. And so we just graduated our third cohort, we're about to launch a recruitment for the fourth cohort. And it's been a tremendous success.
One of the other things I'm really proud about with that program is that when we started out, we said that it would be 50% men and 50% women, and it would broadly reflect the diversity of Canada. And if I'm being honest, Peter, every time I said that, before we actually recruited the first cohort, I thought to myself, Oh man, I hope we can actually pull that off. And I think the reason it was easy is that we said so. We said we were going to do that. And we made it okay for all sorts of people who might not otherwise have felt comfortable applying. And absolutely, among the best graduates are the women or the diversity candidates. It's really exciting.
How many cohorts have you run through your program there, Gordon?
We had three cohorts, and there's a maximum of 20 a year. Thinking right now, we might expand it a little bit. But it's really important that it's full of high quality candidates because that network and how they work together is critically important.
Are you tracking where they go after they come out? So I mean, it's only been a couple of years since those first graduates have come out. I mean, what's the metric you're looking back at - companies, leading companies, the C suite roles?
Our metric right now, quite candidly, is the number of graduates. We are tracking over time and we're really excited to see, we've had a number of candidates promoted into the C suite since they graduated from our program, we've had a number of candidates who are quite prominent today. It's a tremendously successful prototype.
And one of the reasons I know that, obviously, the participants tell us so we see what happens to them afterwards, but I also see the applications. I'm not involved in the selection process. But we see consistently the number of applications has grown every single year.
Before I forget, let me also talk about the other flagship program that's really important because it deals with the other challenge I think we have from a talent perspective in Canada. And that's what we call the Bio Innovation Scientist Program. This is focused on young graduates in sciences, typically either postdocs or certainly masters grads who want to go to work in industry. But if one just finished their doctorate and wanted to go to work in industry, and you entered into your favorite search engine "industrial training for life sciences in Canada postdocs" you get 211 million hits. So the average postdoc had no idea about which of those programs are scientifically valid. And once they figure that out, in what order do they take.
So one of the things we did very early in the pandemic - we got lucky, frankly, we had been planning to do this for a while, and we just accelerated because of the pandemic - was to first take a group of scientific experts and get them to rank a collection of those available programs. And then a collection of pedagogical experts and say, okay, from a learning perspective, how do you organize these, and we put them into three, they're basically one year that a postdoc or masters grad can get qualified training for industry.
There's a report that was just done by the Centre for Canadian Academies, called Degrees of Success. And it looks at postdocs in Canada. 25%, just 25% of postdocs in Canada work in industry. And here we have an industry that's desperate for those kinds of people. If you look at the announcements, the funding announcements, over the course of the last six or eight months, there's over 1000 jobs there typically for those postdocs.
So this program is designed to take highly qualified people from the Academy, who want to work in industry, and give them the commercial perspective necessary for an industry application, and it has been outrageously successful in the uptick. We did a pilot at the start of the pandemic that sold out in three days. And we hope to wrap that very aggressively.
You’re listening to the NPC Podcast. I’m Peter Brenders, your host.
Okay, so let's talk a little bit more about the pandemic, then let's build on that thought. So, has that created new demand on adMare expertise? I mean, is it just, everyone's hunkering down and they need sort of more support? Or has it been quite the opposite, it's just become too difficult for companies? Like, give us an insight in terms of the pandemic effect.
I think we've seen a couple of impacts, some that are quite helpful, some that are quite concerning. The helpful ones, obviously, investors are paying a lot more attention to this space. The amount of venture capital that's coming to Canada or in the United States in this space has been record set at levels we've never seen before.
The part that I'm worried a little bit about is that it's a little bit of a tale of two worlds, right, you have the highly successful ones attracting lots of capital. And the smaller ones who aren't necessarily in trouble today because they've had capital invested in them. But the pandemic has slowed down clinical trials for sure, except in the most extreme or most desperate kinds of situations. And it's made it harder to advance through the pipeline of drug development. I'm concerned that there are smaller, more emerging companies that are going to have capital troubles in the not too distant future. And we're certainly here to respond to that.
So that's interesting. I mean, we saw the federal government for the first time in well, I can't remember, throw like $2.2 billion into life sciences. I mean, for the government to even use the word life sciences or phrase life sciences in a budget has been kind of groundbreaking. And so, and thinking about that in the context that life sciences has generally been neglected for years, for decades in Canada in fact.
So do you get a sense that this new environment for innovations in the health is going to be sustainable, that this momentum that we're seeing coming out of pandemic is going to last? Or will Canada revert back to old ways?
My sense is that we have absolutely changed. We have seen outrageously large investments, as I mentioned, record setting, not just at the federal level, although predominantly at the federal level. We've seen the provinces engage fairly substantively as well.
And when you look at where that multibillion dollar investment is focused, it is in areas that are going to make a substantive difference. So in the Strategic Innovation Fund, which has been used to invest in stem cell, invest in AbCellera, invest in Sanofi and, other places to create the kind of sticky features that I was describing earlier in Canada. You look at the substantial investment in Genome Canada, which has had a terrific track record. But it wasn't just Genome Canada, it was an increment above the $350 million dollars, I think was invested in, Genome Canada, there was a significant increment above that to really knit together the genome enterprise to really make it globally leading enterprise.
And we were very flattered to be included there with fairly substantive funding over the course of four years to continue the work that we do, and to address some of the issues that we've been talking about today. So some of that funding for those companies that might be missed, and also that talent development work, which is incredibly important.
So the solution though, can't be all on government in terms of just putting more money out. Where do you see or how does the industry itself need to lead to sustain this momentum?
In many of the ways that the federal government has invested here through this budget, they are expecting a significant industry multiplier. So if you understand the Strategic Innovation Fund, for example, it's absolutely a partnership fund that's more than just matching. There's a requirement that private sector investments more than match the government.
If you look at the work that we've done, so the federal government has today invested about $100 million in adMare before this budget, and we have generated almost $1.5 billion worth of private sector capital investment into the kinds of companies that we've helped create or fund. We've seen significant growth. The companies in which we have invested are worth about two and a half billion dollars.
Again, I want to give them credit that they're making significant investments, certainly in the basic research in areas that were there, there wouldn't be commercial participation. But they've also put money on the table and said, but only if there's really going to be private sector engagement. Which brings me to the answer to your question.
In a very fundamental way, I think our challenge is aspiration. And I think we've seen a shift in the mentality of the biotechnology industry for sure, over the course of the last three or four years, and you know this space better than just about anybody. And instead of having people say I'm going to create a company and I'm going to get to human proof of concept. Or maybe in rare circumstances, I'm going to get to the marketplace and sell. You see a whole collection of companies today, the repairs I mentioned earlier, or a Zymeworks, or AbCellera, or there's a whole bunch of them in Canada today, it's really exciting, who are intent in building anchor companies, who are intent in building companies of scale, who said, we want to actually build something here. And that is, in my view, that's the key. It's that aspirational difference. And so people have to be prepared to step up. And we've seen it in a remarkable way. So I actually think it's a very exciting time. So it's fun.
So I'm listening to that. And I'm wondering if I may have heard us hitting the tipping point. This is the point where it's changed, where maybe the future in life sciences for decades we've struggled with is maybe at the best that it's ever been. That this is the time where we've seen a change. And the exciting thing is you heard it here first on the NPC Podcast.
Does that sound about right there, Gordon?
You know what, I think it's absolutely true. Sadly, we're both old enough to think back 20 years, when we had a couple of anchor companies, three or four anchor companies in this country.
And one of the things I haven't said in this discussion, Peter, is one of the most frustrating elements of Canada, that makes the work that we do so necessary. That we are the only advanced pharma market in the world without a research-based anchor company. And we are witnessing now that change. And it's not going to change with one anchor company over the next few years. We're going to see several anchor companies.
And as you said earlier, of course, in some cases, the ownership will change because the market will out and the market should out. This is a commercial enterprise at the end of the day. But we have just passed a tipping point without question in my view, and I think it's a very, very exciting industry.
We have been speaking with Gordon McCauley, President and CEO of adMare BioInnovations on the NPC Podcast. Thank you for listening.
Thanks, Peter and Gordon, next time we'll ask them to perform their hit recording "World Without Love." Until then, you can learn more about adMare at admarebio.com. That's admarebio.com.
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The NPC Podcast is presented in cooperation with Impres, Canada's next generation commercial partner. Visit them at www.impres.com.
I'm Mitch Shannon of Chronicle Companies. The producer is Jeremy Visser, Aria Empakeris is the assistant producer. The announcer was Liona Domino. The musical theme is performed by the NPC Podcast Orchestra under the direction of Maestro Zubin Millbrook.
Stay safe until next week, when we'll talk to you again on the next NPC Podcast.