1. The Future of Food in Canada
CHAMPIONING THE BUSINESS OF BIOTECHNOLOGY IN CANADA October/November 2008
ENTREPRENEUR
EDITION
What does it take to
launch a successful
bio venture?
HARNESSING INNOVATION
Canuck executives build Canada’s
bio-entrepreneurial culture…
one success at a time
Startup Checklist
Key criteria to launching
Canadian Publications Mail Product—Agreement 40063567
a product or company
The Initial Pitch
What do Investors look for?
www.biobusinessmag.com

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3. Contents
Bio Business
CHAMPIONING THE BUSINESS OF BIOTECHNOLOGY IN CANADA
ON THE COVER: 18–28
Thomas Wellner, President
and CEO, Therapure BioPharma Inc.
Entrepreneur Edition
(Above) Wellner with Dr. Dirk Alkema,
Several forward-thinking
VP, Operations, at Therapure
Canuck executives aim
to boost the bio-entrepreneurial
culture in Canada by their
30
“
Photos by Jason Hagerman very success
also inside
NBW 2008
12 standards
A look back at this year’s celebration
Harnessing Innovation
18 5 EDITOR’S NOTE
Canuck executives endeavor to
build Canada’s bio-entrepreneurial 7 NEWS
culture…one success at a time
36
Startup Checklist
NEW PRODUCTS
20
A quick list of key criteria you need
”
to know
22 Q&A
Q&A with Lorna Shaw-Lennox, Commercializing R&D is not for the faint of heart,
Start-Up Company Specialist the impatient or the poor. Turning an idea into a
28 The Initial Pitch successful company is very risky, complex and
The basic business principles of a expensive. It takes patience, specialized knowledge,
pitch to investors
superior management skills and lots of money.
30 Discoveries
Canadian scientists advance – Dr. Jacques Simoneau, Executive Vice President, Investments,
agri-food science and technologies
Business Development Bank of Canada (BDC), in a May 2008
38 In Person speech to the House of Commons Standing Committee on
McGill’s Professor Richard Gold seeks to Industry, Science and Technology
reform dated intellectual property laws
October/November 2008 Bio Business 3

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5. Bio Business Editor’s Note
Championing the
Business of Biotechnology in Canada
Publisher Christopher J. Forbes
& CEO cforbes@jesmar.com
Executive Bernadette Johnson
Editor bjohnson@jesmar.com
Editor Theresa Rogers
trogers@jesmar.com
Writer Jason Hagerman
Editorial
Intern Erica Tennenhouse
Art Tammy White
Director twhite@jesmar.com
Risky
Bruce Lee
Secretary/
Treasurer
Sales
Manager
Susan A. Browne
Beth Kukkonen
bkukkonen@jesmar.com
Business
Promotion Nancy Sim
I
Manager nsim@jesmar.com t comes as little surprise that the biggest and application for their product or
Promotion Jessica Forbes challenge for biotechs today is a lack of innovation, then build it; they create a
Co-ordinator jforbes@jesmar.com money. Our panel of entrepreneurs in distribution and sales strategy, and execute
Production Roberta Dick this issue’s cover story on page 18 has not it; they manage the basic business opera-
Manager robertad@jesmar.com been without its own set of financing tions of the company like HR; and all the
Production Sara Forget hurdles. However, they have been blessed while, they attempt to attract money to
Co-ordinator sforget@jesmar.com
in some respects. And with good reason. keep everything afloat.
Bio Business is published 5 times per year by Jesmar
If you’ve ever wondered whether or not But it does take two to raise money.
Communications Inc., 30 East Beaver Creek Rd., Suite
202, Richmond Hill, Ontario L4B 1J2. 905.886.5040 your company would be eligible for ven- We know research commercialization
Fax: 905.886.6615 www.biobusinessmag.com One year ture capital, Jacques Simoneau, BDC definitely represents a higher degree of
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Atkinson, biondj16@publicationpartners.com Fax: business going to change the world?” In ers who were willing to take that risk —to
905.509.0735 Subscriptions to business address only. On
occasion, our list is made available to organizations whose
an article titled Entrepreneurship at the varying degrees—and stick with them for
products or services may be of interest to you. If you’d rather highest risk level, Simoneau writes: “That the long haul.
not receive information, write to us at the address above or may seem like a lofty goal but venture Axela’s Rocky Ganske believes a dedi-
call 905.509.3511 The contents of this publication may not
be reproduced either in part or in whole without the written
capital is reserved for a small percentage cated investor is critical to boosting the
consent of the publisher. GST Registration #R124380270. of entrepreneurs who are trailblazers success rates of life sciences companies in
in their fields. They often have very Canada, as well as growing entrepreneuri-
PUBLICATIONS MAIL AGREEMENT NO. ambitious objectives.” alism among the sector. Without Ven-
40063567
RETURN UNDELIVERABLE CANADIAN If you take the panelists in our cover Growth’s support, he says “Axela would
ADDRESSES TO story this issue, that statement does not be where we are today.”
CIRCULATION DEPT.
202-30 EAST BEAVER CREEK RD indeed hold true—each was recruited
RICHMOND HILL, ON L4B 1J2 from far and wide because they had a host Cheers,
email: biond@publicationpartners.com of skills and experience to bring to the
table. You want ambition? Just over three
Bio Business is a proud member of years in and Natrix’s Lisa Crossley is
BIOTECanada and the Toronto already predicting her company will be Executive Editor
Biotechnology Initiative (TBI). worth half a billion dollars within five bjohnson@jesmar.com
years “at the outside”.
Entrepreneurs like this bunch do it all:
through market research, among other
things, they determine a commercial value
Publisher of
LAB BUSINESS Magazine
LAB BUSINESS Cards
BIO BUSINESS Magazine
Printed in Canada
October/November 2008 Bio Business 5

7. News
Canadian-Chaired Group Releases Critical Study of IP Laws
new study released by an international coalition of experts blocking negotiations that could
A calls upon governments across the world to consider a
massive restructuring of intellectual property laws.
have benefited both sides, as well as
the larger public.”
The report was released in September by members of the Information was gathered through
International Expert Group on Biotechnology, Innovation and group sessions in which former indus-
IP, a group chaired by McGill University’s Prof. Richard Gold. try competitors were allowed to sit
Titled Toward a New Era of Intellectual Property: From and speak with each other, revealing
Confrontation to Negotiation, the report outlines a number of information that made clear to both
strategies for governments, universities and industry players to sides the reasons for their inability to
increase innovation, which Gold believes has long been stifled find common ground.
by IP laws. Among these is a call to governments to work with The report highlights recent
industry in creating respected and trusted entities whose mem- examples of patents and privately-
bers can be counted on to mediate disputes fairly and encourage controlled research limiting potential innovation—the $612
indigenous and local communities in policy development. For million patent suit that nearly shut down the
patent offices to collect standardized patent-related informa- World’s Blackberries; Myriad Genetics’ inability to introduce
tion, and for universities to develop measures of the success of its breast cancer screening test in Canada and Europe; a phar-
transfer of technology based on social returns rather than on the maceutical industry with an increasingly bare medicine cabinet;
sheer number of patents held. Industry entities are also encour- an ongoing failure to deliver life-saving medications to develop-
aged to participate actively in the creation of public-private ing countries.
partnerships and other collaborative mechanisms. As with any fringe technology, biotechnology suffers greatly
Based on seven years of research involving case studies from from vague, out-of-date and almost obstructive IP laws, accord-
Brazil, Canada, Kenya, the United States, the European Union, ing to Gold. The industry itself, he believes, must be the primary
Japan, Australia and India, as well as discussions with policy- agent of change.
makers, industry representatives, scientists and academics from “Law deals with technology that we had 5 to 10 years ago,”
around the world, the report found consistent roadblocks said Gold. “To get things to happen you really have to change
around the globe. the minds of the people actually doing the research. We’re in ruts
“We found the same stumbling blocks in the traditional of thinking. For any biotech to say ‘the old model doesn’t work,
communities of Brazil as we did in the boardroom of a corpora- we’re going to go out on a limb here and come up with some-
tion that holds the patent to a gene that can determine the thing new’, they’re afraid nobody’s going to back them. We all
chance a woman will develop breast cancer,” said Gold. “No know the model doesn’t work, nobody is taking the first step to
matter where we looked, the lack of trust played a vital role in move it forward.”
The Future of Pharma?
“To remain at the forefront of medical research…the
A ccording to research
launched by Price-
waterhouseCoopers, the research
industry needs a faster, more predictive way of testing
molecules before they go into humans,” says Gord Jans,
and development process for leader of the Canadian Life Sciences practice.
life sciences companies may Some companies are already using an incarnation of
be shortened by two-thirds in virtual testing, and have reduced clinical trial times by 40
as few as 12 years. per cent. PwC’s research identifies the need for collaborative
The report, Pharma 2020: Virtual R&D, which path will efforts between pharma companies, as well as the need
you take?, focuses on the potential development of a “virtual for regulatory bodies which will be responsible for
man,” which will enable researchers to rapidly test the licensing and reimbursement.
effects of new drug candidates before they enter human “Connectivity—technological, intellectual and social—
beings. This would result in massive forward progress in the will ultimately enable us to make sense of ourselves and
area of R&D. the diseases from which we suffer,” says Jans.
October/November 2008 Bio Business 7

8. News
Expenditures in Higher Education R & D Near $10 B Energy Costs
a Major
Concern for
ccording to Stats Canada, spending on research and development in the higher
A education sector amounted to $9.6 billion for the fiscal year of 2006/2007. This
Canadian Business
includes money used in affiliated research hospitals, experimental stations and clinics.
Broken up by category, miscellaneous natural sciences accounted for 41 per cent of
the total, while health sciences came in at 39 per cent and social sciences and
humanities accounting for the remaining 20 per cent.
Higher education institutions themselves were the largest contributors, funding A Canadian Institute of Chartered
Accountants (CICA)/ Royal
Bank of Canada (RBC) report
$4.4 billion, followed by the federal government with $2.5 billion in funding, provin-
cial governments with $992 million, business enterprises $808 million, private NPO’s released in August says corporate
with $775 million, and finally foreign bodies contributing $125 million. confidence in the Canadian econo-
my is startlingly low, and that rising
energy costs are a major factor.
“A year ago, oil was selling for
DNA Sequencing an average of $US 71.00 a barrel,
to Explode gas prices at the pumps were aver-
A ccording to a new technical market
research report, DNA Sequencing:
Emerging Technologies and Applications,
aging $1.07, and the Canadian
dollar was perched at 94 cents
US. It’s been a tumultuous 12
released by BCC Research, the global months and that is reflected in the
market for DNA sequencing should drop in confidence and optimism
reach $1.7 billion by 2013—averaging levels of this latest report,” explains
an annual growth rate of 14.7 per cent. Shauneen Bruder, EVP, RBC Business
The report breaks the market down and Commercial Banking.
into three segments. Research/drug The exception to the CICA/RBC
discovery and development, which has the largest share of the 2007 market, Business Monitor findings is Western
at $600.4 million, and is expected to grow by $40 million in 2008, and to Canada, where rising commodity
over $1 billion by 2013. Commercial applications is the second segment, with prices have contributed to higher
$193.6 million in 2007, $218.8 million in 2008, and an expectation of $426.1 economic confidence and optimism
million in 2013. The third segment, emerging applications, currently has the small- —with oil and gas industry execu-
est market share, at $3.1 million by the end of 2008, but will grow exceptionally tives reporting the highest levels of
quickly, reaching $272.5 million by 2013, a growth rate of 144.8 per cent. confidence.
DNA sequencing allows scientists catalogue variations within the human The Business Monitor, which is
genome sequence that make us phenotypically different, and that cause resistance issued quarterly, reports that three in
and susceptibility to disease. Rapidly evolving sequencing technologies provide four executive chartered accountants
unprecedented analytical tools that allow reserachers to identify this sequence indicated their companies have
variation, in humans as well as in other species. absorbed all or some of the increas-
Technology and market forces are working a fundamental shift, according ing energy costs, while less than 40
to the study, in the DNA sequencing industry. Directing the industry away per cent took action to offset energy
from stagnant/declining growth and into the polar opposite. costs.
Appointments
Quebec’s Æterna BIOTECanada welcomed Toronto’s Biovail Corp.
The Alberta Medical Zentaris appoint- Jazmín Bolaños as Manager appointed Peggy Mulligan,
Association Edmonton, ed Prof. Jürgen of Marketing and Programs. FCA as Chief Financial Officer.
inducted its new president Engel, Ph.D. as its Among other things Bolaños Mulligan succeeds Adrian A. De
for 2008-09. Dr. Noel W. new President and will be responsible for defining Saldanha, who had been serving
Grisdale is a family physician. CEO. Engel was formerly and implementing the as Interim CFO. Mulligan was
He has been a member of the Executive Vice-president and association’s marketing most recently a Principal at Priiva
AMA Board of Directors Chief Scientific Officer of programs and strategies. Consulting Corp. Prior to that, she
since 2001. Æterna Zentaris. served as EVP, CFO and Treasurer
of Linamar Corporation.
8 Bio Business October/November 2008

9. Canada Painfully Slow at Adopting Modern
Medical Technology, Report Says
A new study by independent research
organization the Fraser Institute says
Canada is painfully slow in adopting new
medical technologies which could provide
faster and more efficient identification and treatment of disease.
The study, titled Medical Technology in Canada, evaluates the availability of medical
technology in Canada compared to other nations within the Organization of
Economic Cooperation and Development (OECD); measures the age and sophistica-
tion of medical technology in Canada; and measures the stock of available cutting-edge
medical technology in Toronto, Montreal, Vancouver, Ottawa, and Calgary. The study
focuses principally on technologies in the diagnostic imaging, laboratory diagnostic, Canada West
surgical, and patient services areas.
“The results of our failure to invest in new medical technologies are exemplified by
Foundation Calls for
long waiting times, less efficient use of medical resources, and less timely and sophis- Clean Energy Goals
ticated diagnosis and treatment,” says Nadeem Esmail, Director of Health System
Performance Studies at The Fraser Institute and co-author of the study.
The study also identifies Canada’s health care system as one of the most expensive
T he Canada West Foundation released a
report calling on municipal, provincial
and the federal government to begin
in the world. Esmail points out that the federal government transferred $3 billion in
work on an energy strategy. Canada’s
targeted funding to the provinces between 2000 and 2004 in an effort to improve the
Power Play argues that the Canadian
availability of medical technology. Yet, according to the study, modern medical tech-
government needs to take a grander
nologies still remain notably rare.
approach to the issue of climate change
According to OECD data, the number of MRI units in Canada, 6.2 per million
and set specific energy goals.
people, lags behind the OECD average of 10.2 per million. Likewise, CT scanners, 12
“Canada’s federal and provincial
per million people in Canada, lag behind the OECD average of 19.2 per million.
governments have made strides toward
setting climate change goals, but these
are distinct from energy goals,” says the
China, Canada Partner to Increase Canola Production report’s co-author, Dr. Roger Gibbins.
A new partnership between Canada and China aims to
increase the production of Canola through genetic research.
Over the next five years, The National Research Council
“If we want to be a clean energy super-
power, then we have to keep our eye on
the energy policy ball. This means
Canada (NRC) will contribute $210,000 worth of resources setting goals that will enable us to use
and facilities, and the Oil Crips Research Institute branch of the Chinese Academy our energy capital to be global leaders.”
Among the recommendations are:
of Agricultural Sciences will contribute $300,000 in cash.
establish hard energy production targets
“Food and energy shortages are an escalating problem and increasing canola
across a range of energy sources for both
productivity is something that can help these global issues,” said Dr. Han-zhong domestic consumption and export that
Research Council Canada
Wang, Director of the Oil Crops Research Institute. He added that since Canada go beyond dealing with GHG emissions
Photo credit: National
is the proverbial birthplace of canola, the partnership is all the more fitting. and develop policy scenarios for meeting
The first project to be undertaken under this agreement is to complete these goals; stress energy conservation
genomics work on canola to identify genes that affect yield and adaptation to and market-based incentives; and coor-
various environmental stresses. dinate federal, provincial, territorial and
municipal energy policy initiatives.
The Canada Council for Markham’s Cytochroma appointed Healthscreen Solutions Topigen
the Arts appointed MaRS Steven I. Engel, M.S., Pharm.D., as Inc. appointed Ken Killin Chief Pharmaceuticals
Director Joseph L. Rotman Vice-president of Regulatory Affairs Financial Officer. Previously a Inc., Montreal,
Chair of the organization, and Quality Assurance. Engel company advisor, Killin replaces appointed Mark Parry-
which fosters and promotes brings over 20 years of experience Eugene Bomba, who will be Billings, Ph.D., as Chief
the study, enjoyment and in regulatory affairs and quality leaving his position to return Executive Officer. Parry-Billings
production of art. assurance. He will be based in to private practice. joined Topigen in 2007 as Chief
Cytochroma’s Illinois office. Development Officer.
October/November 2008 Bio Business 9

10. News
E V E N T WAT C H
High-level Speakers Address Bio Pacific
Rim Summit
W ith biofuels, as with anything
else, there is a right way to do
it and a wrong way to do it. Chris
Somerville, director of the Energy
Biosciences Institute at the University
of California Berkley, and Don
O’Connor, president of S&T, spoke
in Vancouver at Bio’s Pacific Rim
Summit on the subject of doing
biofuel right.
“Like any other activity, bioenergy
and biofuels can be well done or
Feds Contribute $3 Million
poorly done,” O’Connor said. “If
they are done poorly, then the envi-
ronmental and social benefits will
not be delivered. It is not what you
do but how you do it that creates
an environmental benefit.”
to Oilseed Research
Somerville spoke on the concept of
“responsible biofuels”—those that do
not displace food production, do not T he Industrial Oilseed Network (IOSN) is set to receive $3 million in funding
courtesy of the Government of Canada. The IOSN will dole out $2.556 million
to Vancouver-based Linnaeus Plant Sciences Inc. Linnaeus will be responsible for
convert undeveloped land, do not
increase erosion or runoff and show the administration of a research network, and the funding of non-government
a reduction of greenhouse gas emis-
research activities.
The research network will develop a new type of oilseed that will be used solely
sions through a full life cycle analysis.
for the production of petroleum substitutes for use in a variety of applications, such
Things like wheat straw and tallow
as fuel additives for use in heavy equipment and marine towing operations; bio-based
and animal fats fall into this category.
hydraulic fluids; and bio-based oils in the construction industry, civic bus transporta-
tion, and lobster fishing.
“Oilseed crops have the potential to provide bio-based alternatives to a variety of
petroleum products,” said Jack Grushcow, the President of Linnaeus Plant Sciences
Inc. and the project lead for the ABIP Industrial Oil Seed Network. “The Industrial
Oil Seed Network will transition non-food Canadian oilseeds crops from a low value
commodity to a high value industrial feed stock that can substitute for petroleum in a
variety of applications.”
OLEOTEK, located in Thetford Mines, will receive a total of $235,000 as one of
the participants in the network. François Dornier, President of the Centres for the
Transfer of Technology, says: “The contract will give OLEOTEK an opportunity to
work with a multidisciplinary team throughout the country to achieve a sustainable
development objective.”
(C) 2008 Biotechnology Industry
IOSN will also involve researchers in the United States who will share their sig-
Organization
nificant expertise in soybean oil so that it can be applied to Canadian oilseed crops.
Province of Ontario Ranked as Key Biotechnology Centre
T he June 2008 report issued by Genome Technology Online ranked Ontario as one of the top locations in the world for biotechnology.
The high ranking came as a result of the abundance of resident biotech companies (120 private and 26 public), the presence of
major biotech initiatives like the Ontario Genomics Institute and the Ontario Institute for Cancer Research, as well as the creation of
a biotech-centric zone in the core of Toronto anchored by the MaRS Discovery District. Biotech organizations in Ontario were also
recognized for forming several recent collaborations with out of country biotech clusters. Among other top ranked regions were
Boston/Cambridge, Washington D.C. Metro Area and Singapore.
10 Bio Business October/November 2008

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12. NBW 2008
A Look Back at National
Biotech Week 2008
T
he fifth annual National Biotechnology Week was launched election October
in Montreal September 18. Kick-off cocktails—hosted at the 14th, BIOTECanada
Musée D’Arts Contemporain—drew a large crowd of leading postponed the
industry players, and proved to be an excellent opportunity to National Advocacy
unveil BIOTECanada’s annual national polling results exploring Day of September 23.
Canadians’ attitudes about biotechnology. Peter Brenders, Advocacy efforts at the provincial level continued in at least five
President of BIOTECanada delivered the findings (see sidebar). provinces. On the federal level, BIOTECanada did conduct an
Many events took place across the country during the intensive E-Advocacy Campaign with the top 75 ridings in Canada who
week of biotechnology advocacy, from September 19 to 26. In its have established bases of biotech operations. The online cam-
milestone fifth year, the week is an important opportunity for paign provided federal election candidates with information on
BIOTECanada and the community at large to engage partners— the companies active in their riding and on the main issues fac-
government agencies and officials, local media, and the public—to ing Canadians today in building the industry.
educate and raise awareness about the positive impact our industry Across the country, individual provinces and cities hosted
has on Canadians and their way of life. events such as conferences, career fairs, and guided tours of
Typically, each year, biotech CEOs also meet with senior biotech facilities—all designed to outline the importance of
federal decision makers in Ottawa to discuss issues relating to biotech to their communities and constituents. Here’s a sampling
biotechnology in Canada. This year however, in light of the of National Biotechnology Week events and announcements:
Splicing the Data
BioTalent identifies the critical role of human resources in Canada’s bio-economy
Among the week’s many announcements, was the launch of R&D 59.1%; clinical/field trials and regulatory: 24.7%; produc-
BioTalent’s comprehensive, benchmark-establishing labour market tion/manufacturing 20.0%; commercialization/marketing 46.5%
information (LMI) report of Canada’s biotechnology sector. The • Product/service breadth: 25.2% of companies focus on one to
product of extensive research and analysis, it is in fact the only two products (across all stages of development)
report of its kind in this country, developed under the leadership of • Full-time employment: 8 out 10 companies have fewer than 50
industry and yielding statistically significant results that paint a full-time employees
clear—and occasionally surprising—portrait of Canada’s bio- • Outsourcing: 55.0% of all companies outsource some skills or
economy. Here is a snapshot of the findings, intended to help the tasks, regardless of company size; IP (26.4%) and manufacturing
country’s biotechnology industry identify their areas of need and (24.2%) are the principal functions outsourced
begin planning strategically to ensure a successful future—in part- • Vacant positions: Roughly a third of companies have unfilled
nership with each other, with educational institutions, government positions today—with most of those in preclinical research/R&D
bodies and organizations such as BioTalent Canada: (51.9%); marketing, sales and communications (27.9%); and man-
• Significant expansion: 77.2% growth in number of biotechnology ufacturing/distribution (26.0%)
companies in Canada over past 20 years • Recruitment and retention: Top 3 challenges are lack of candi-
• Revenue challenge: 28.1% of pharmaceutical companies gener- dates with required skill sets/experience (55.6%); insufficient cap-
ate revenues of less than $50,000 per year ital/resources to recruit appropriate candidates (34.1%); and
• Stages of development for primary and secondary products: competition for qualified candidates (32.8%)
12 Bio Business October/November 2008

13. Canadians Value Biotechnology and 81% Want Governments to Support It Too
BIOTECanada releases national poll on Canadians’ attitudes on biotechnology
BIOTECanada’s fifth annual National Biotechnology Week Findings also included:
launched in Montreal with the release of national polling results
showing Canadians overwhelmingly value biotechnology’s contri- • The biotechnology footprint: Over 550 firms in Canada are
bution to their food, their health, their environment and the econo- part of an industry that invests $ 1.7 billion per year in
my. The poll, conducted by Nanos Research, found that overall research alone.
impressions of biotechnology continue to be positive. For the • Biotechnology creates prosperity: Almost nine of every ten
fourth year in a row, biotechnology matters to Canadians. Canadians (88%) believe biotechnology is important to
Eighty-eight per cent of Canadians understand that biotechnol- Canada’s future economic prosperity.
ogy is important to future prosperity, indicating support for a • Canadians want to see governments support biotech-
strong bio-based economy in Canada that is based on a sound nology: Eight of every ten Canadians (81%) supported the
business framework, and financing for innovative firms. Strong use of government financial incentives to encourage inno-
majorities of Canadians support research in biotechnology and the vation in biotechnology. Eighty per cent thought the health
use of products and processes that involve biotechnology across care system should pay more to introduce biotechnological
the board. Canadians see biotechnology is bringing a positive con- advances into our care.
tribution to agriculture, the environment, and notably, believe the • Quebecers are especially strong supporters of biotech-
greatest benefits will be in health sciences. Canadians expect to nology: Ninety-two per cent of Quebecers (92%) supported
benefit from biotechnology in their lifetimes—and they expect biotechnology for research. Compared to the national aver-
their governments to invest in innovation to bring biotechnology age, Quebecers were significantly more likely to believe
into health care, and to financially support the sector, whether there would be major benefits from biotechnology in the
through tax incentives or grants. areas of health, environment and agriculture.
Third Annual GPI BioGolf Tournament
The Guelph Partnership for Innovations (GPI) held its annual BioGolf tourna-
ment at the Guelph Lakes Golf and Country Club. Custom-made trophies
featured a useable Putt for the Planet golf ball. The latter balls were also
used for the putting contest. The tournament also included a biotech
business trivia game for prizes and glory.
GPI also held its annual GPI Networking Breakfast Series. Started in 2003,
it aims to inform, connect and inspire attendees on topics of interest to the
Guelph agritechnology cluster. (Bottom left) Novelist and GPI Breakfast
Speaker William Atkinson chats with attendees at the breakfast.
GPI is a consortium of life science stakeholders with the vision of making
Guelph one of the top five life sciences centres in North America.
October/November 2008 Bio Business 13

14. NBW 2008
London Celebrates Biotechnology Week with Friendly Competition
TechAlliance hosted the 5th annual London Biotechnology Week. This
year’s celebration of the local and national biotechnology sector was
launched through a keynote presentation from Dr. Michael Strong on
the Lifecycle Research Network, of which he is Director, and later in
the week followed by a business seminar showcasing new government
programs available to entrepreneurs to help their technology based busi-
nesses grow and prosper.
Additionally, the week brought together 100 students and nearly
100 community leaders to participate in the fourth annual
BIOlympics, an event that engages grade 7 and 8 students through
competing in a round robin of fun biotech-related challenges. The
winners this year were the Bacteriocides from St. Mary Choir Catholic
School with Team Leader Police Chief Murray Faulkner.
For a second year, TechAlliance also ran the Secondary School
Biotechnology Awareness Campaign, giving high school classrooms the
opportunity to hear from and engage with seasoned industry experts.
This initiative stimulates interest and encourages local students to pur-
sue careers in the biotechnology and life science industries.
Throughout the week, over 350 participants joined London Biotech
Week and marked this year’s initiative as a true success.
Teachers Receive National Award for Teaching Excellence
Three teachers from Winnipeg, Vancouver and Moncton received can understand and take advantage of these changes.”
the third annual BIOTECanada-Biogen Idec Teaching Excellence “Our business was founded on innovation. Building scientific
Award. Albert Chang, Robert Adamson, and Lawrence McGillivary knowledge in Canada is crucial to encourage the next generation of
were judged by a panel of industry experts to be the three top edu- entrepreneurs, and the work these teachers do builds that founda-
cators in a secondary school level biotechnology program. This tion,” said Richard Francis, President and CEO of Biogen Idec
program awards a total of $10,000 annually to the 3 winning teach- Canada Inc. “Biogen Idec is extremely proud to recognize the con-
ers and their respective schools. tribution of three teachers in raising the bar in scientific under-
“This year, our National Biotechnology Week celebrated educa- standing in Canada.”
tion and we are extremely pleased to be able to recognize the contri- The first place winner, Albert Chang, from David Thompson
butions of these three individuals in instilling a love of science in stu- Secondary School in Vancouver, receives $5,000, to be shared with
dents,” said Peter Brenders, President and CEO of BIOTECanada. his school. Chang was recognised for the depth of his teaching
“Biotechnology is changing the world around us in fundamental program, which combines scientific theory and practice with the
ways. Through their commitment and passion to teaching the latest history of biotechnology, patent law basics, and media analysis, and
biotechnology science, teachers are ensuring the next generation for his significant mentorship of his students outside the classroom.
14 Bio Business October/November 2008

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16. NBW 2008
DNA Extraction…and dancing?
MaRS celebrated National Biotechnology ting the slurry with water. The mixture
Week with two free events Friday, Sept. was then filtered through cheesecloth to
26. For Biotechnology 101, Northern remove the large chunks. Alcohol was
Secondary School’s Dr. Danielle Gauci, then introduced to the concoction,
2007 winner of the OGI Genomics which separated from the water, and
Teaching Prize and Biogen IDEC drew the DNA content to the surface of
Biotechnology Teaching Excellence the water, which the alcohol rested
Award, presented students with the basics, above. Students were able to remove the
including the impact of biotechnology jelly DNA from the liquid and take it
and its applications. The second event, home to display their scientific prowess.
Dance ‘N Action in the Park, involved After the DNA Extraction seminar,
lively streetside performances by buskers, students made a short trek to Metro
dancers and other artists at Metro Hall. Square for a presentation hosted by the
The two free events were hosted by the Ontario Genomics Institute (OGI) and
MaRS Discovery District, the Canadian the Golden Horseshoe Biosciences
Biotechnology Education Resource Network. The mysteries of DNA were
Centre (CBERC), The Biotechnology first unraveled through the Top Rock,
Initiative (TBI), the Ontario Genomics Drops and Freezes of a three-man break
Institute (OGI) and the Golden dancing crew.
Horseshoe Biosciences Network. Following some real life accounts of
Students from across the GTA con- the impact of genetics, some DNA poet-
gregated at the MaRS building in down- ry and a tin-drum/ saxophone duet, a
town Toronto, for an engaging seminar single interpretive dancer took to the
presented by Dr. Danielle Gauci that floor to act out the colourful life of a dou-
included hands-on DNA extraction by ble helix. In the second performance in as
the students themselves. Students first many days, the double helix was the
broke down bananas using plastic forks, centre of attention for more than 225
reducing them to mush/pulp and split- students from as many as 8 schools.
Photos by Jason Hagerman
Premier Ghiz officially
decrees National
Biotechnology Week
in PEI at the PEI
BioAlliance Launch
day, September 19
16 Bio Business October/November 2008

18. HARNESSING
18 Bio Business October/November 2008

19. INNOVATION
Special Report
Canuck executives endeavor to
build Canada’s bio-entrepreneurial
culture...one success at a time
B io-entrepreneurialism. It’s quite a mouthful. By
definition, it means the art or the endeavor of
organizing, managing, and assuming the risks of a sci-
ence- or biotechnology-based business or enterprise.
“Commercializing R&D is not for the faint of
heart, the impatient or the poor,” Dr. Jacques
Simoneau, Executive Vice President, Investments,
Business Development Bank of Canada (BDC) said
in a May 2008 speech to the House of Commons
Standing Committee on Industry, Science and
Technology. “Turning an idea into a successful
Photo by Jason Hagerman
company is very risky, complex and expensive. It takes
patience, specialized knowledge, superior manage-
(From left to right) Dr. Dirk Alkema,
VP, Operations, and Thomas Wellner, ment skills and lots of money.”
President and CEO, Therapure
BioPharma Inc. at the company’s And by most accounts, it doesn’t happen often
new 130,000-square-foot cGMP enough in Canada. Indeed, pundits say an entrepre-
manufacturing facility in Mississauga
neurial environment is sorely lacking north of the
border…for the very reasons listed by Simoneau.
October/November 2008 Bio Business 19

20. “In Canada, there isn’t the same kind of entrepreneurial culture that Thomas Wellner spent the last 10 years working in the UK
there is in the States,” says Lisa Crossley, PhD, P.Eng., President and Germany in top positions for Eli Lilly, following 10 years
and CEO of Burlington-based Natrix Separations Inc. (formerly with the company in Canada. He recently returned to take on the
Nysa Membrane Technologies), a supplier of high performance, role of President and CEO of Mississauga’s Therapure
single use and multi-cycle disposable chromatography products. Biopharma Inc., a new, first-of-its-kind Canadian biopharma-
Prior to launching Natrix in 2005, Crossley spent five years cutting ceutical company specializing in developing, manufacturing,
her teeth in the American biotech industry taking two lead thera- purifying, and packaging biological protein therapeutics—at a
peutic candidates through clinical trials in four indications—leads very large scale and small scale.
that ultimately powered the company’s IPO. “Down there, we had “The biotechnology scene has changed a lot since I was here
a lot of startup exposure. Everyone I knew was at a startup compa- 10 years ago. There was quite a robust industry then. It seem to
ny. That experience had a tremendous impact on me and definite- have been somewhat decimated,” he says. “There are some
ly accelerated my professional development.” tremendous brains and discoveries kicking around the labs here.
The mindset of U.S. entrepreneurs is to look toward the exit But we need more investment and more focus around the com-
more so than toward the job itself, says Rocky Ganske, President & mercialization of biotechnology.”
CEO, Axela Inc., Toronto, which provides protein detection, char- Crossley, Ganske and Wellner are among several forward-
“I make no bones about it. I’m here to
acterization and monitoring products used in life science, health
and clinical research (read more on Axela in Entrepreneurial
create wealth—both for myself, my
Beginnings, page 26). And he would know. Ganske, an American,
[team]…and my investors.”
came north specifically to launch Axela. “I make no bones about it.
I’m clearly here to create wealth—both for myself, my manage-
ment team, my employees and my investors.”
Startup Checklist
A quick list of key rules you need to know prior to launching a product or company
• Build a good business plan. The single most important • Think commercially from the get-go. What is the commer-
thing you can do is to put together a good business plan, cial need for your product/technology? What else is out
says Natrix’s Crossley, not a research plan. “You need to there in this category? Your product has to be so com-
use real, concrete, measurable data—not something you pelling that people are willing to adopt yours over what’s
just pulled out of a market research report. What is the already out there, says Ganske: “You want your product to
market size? How much of it can you address? And when be so good that it is unconscionable for anyone to say no.”
can you do that? Barriers to entry? You need to bring
investors references that they can contact—actual end • Get to know your potential customers and get them
users, or key thought leaders in the industry to validate engaged early. Says U of S’s Shaw-Lennox: “People are
your concept/product,” she says. “So many people give happy to give their opinion on something that you are
the formula that everybody learns in business school, but creating—and if you can’t get them involved in that
that doesn’t translate into how you are going to penetrate creative process, you’re certainly not going to get them to
the market and when.” buy your gizmo.”
• Look early on at commercial partners. This world today is • Broaden your horizons and think globally. There is this
becoming more and more a game of partnerships, says local mindset that looks at the market opportunity within the
Ganske of Axela. “Sometimes you have to go to other peo- confines of the Canadian jurisdiction, says Therapure’s
ple for technology. The challenge that some of the less- Wellner. “You have to have a global mindset and under-
experienced entrepreneurs in Ontario have is that they feel stand not just the local politics, and the provincial and fed-
as though they have to invent everything themselves— eral shenanigans that go on but also European require-
there’s no need to do that.” Rather, says Ganske, develop ments and U.S./FDA drivers,” he says. “You have to be
relationships—either licensing or distribution partner- able to put yourself in a greater, global context to be able
ships—and you’ll be introduced to new people, often with to truly appreciate the opportunities that are out there. And
connections, that want to play with you. there are vast numbers of opportunities.”
20 Bio Business October/November 2008

21. Special Report
thinking Canuck executives trying to stymie some of the negative
trends that are occurring. By their very success, they hope to
boost, among other things, the bio-entrepreneurial culture in
Canada.
“We have a really great opportunity here in Canada to build
the next layer of business leaders in this space by showing
them what it’s like to create this wealth and to create
energy,” says Ganske. “They’ll go forward with that same
hunger. It’s a function of getting enough successes.”
Even distributor VWR is hoping to make its mark.
Axela and Natrix are the first pieces of its North
American business development initiative that aims
to help young biotech companies get their products in
front of customers, and ultimately drive the adoption of
new technologies, says Doug Ward, VP Marketing,
Canada, at VWR International. In partnering with and
distributing the products of new companies, it hopes to
grow its life sciences program and fill gaps in its product
portfolio. Depending on the U R NofN G partnership, the I O N I N T O
T nature I the I N N O VAT
company can also provide market guidance and support given H
ECONOMIC GROWT
its knowledge of the end user and of the industry.
“I’ve been around a long time, and I’ve seen so many people
develop a product and sell it off. It’s the Canadian reality. There in the
Business, education and government
are very few folks taking it to the market on theNiagara stage joined forces
Hamilton, Halton and global regions
like these two [Axela and energize our existing biosciences strengths and
to Natrix]. That really attracted
me…taking risks in Canada is not something that happens very
help turn breakthroughs into business success.
often,” says Ward.
Join us as we build this regional initiative!
“I’ve come back to Canadatransform to start and Horseshoe into a
Help wanting the Golden lead a
Canadian-based, but globally focused, companyeconomic powerhouse of
knowledge-based, that through its
success will hopefully contribute positively and the Canadian
research, growth to investment.
space,” adds Wellner.
For its part, Therapure Biopharma web site today to man- out more!
Visit our Inc. provides protein find
ufacturing services on a contract basis, but also forms joint devel-
opment partnerships with biotechnology firms—sharing the cost
and risk of manufacturing complex biologicals at commercialw. g h b n . o r g
w w lev-
els. The company is also seeking to acquire pre-approval products
and to forge potential equity participation in some cases.
“The intention is that we are all about helping biotech and
innovative companies bring their products to life,” he says. “We’ll
partner with them early on or midstream and stay with them
through commercialization. There are not many biotech compa-
nies that happen to have $250 million kicking around to build a
large-scale biomanufacturing facility like we have.”
It’s a unique business model, Wellner adds, made possible
through the company’s relationship with backer Catalyst Capital
Group Fund II. Therapure’s unique and flexible 130,000-square-
foot cGMP manufacturing facility will be completed this fall,
generating at least 100 high-quality, value-added jobs for
Ontarians, says Wellner. (Therapure Biopharma acquired its
Canadian built and conceived facility from Hemosol
Corporation, a specialist in therapies derived from hemoglobin, a
blood protein.)
October/November 2008 Bio Business 21

22. QA
Special Report
Wellner cites famous University of Toronto scientists Fredrick
Banting and Charles Best as early examples of what happens to with Lorna Shaw-Lennox, Start-Up Company Specialist,
most Canadian scientists and discoveries…and indeed one of the Industry Liaison Office, University of Saskatchewan
main challenges Therapure is hoping to address. “Their discovery
of insulin in 1921 changed the course of a disease. But they could
not make the product at a global, commercial scale on their own. What is your role as startup company specialist?
They were compelled to partner with a U.S. company that could Our role at the industry liaison office is to tech transfer for the university.
provide them with the technical competency and capability.” We commercialize technology. If something looks like a good platform tech-
The current market conditions in Canada, he continues, nology, and if we have an entrepreneurial researcher who is interested in a
encourage scientists to sell their products and ideas before they startup company—and it meets all the other criteria like patentability and
have to start spending money on phase two and three clinicals, marketability—then we would decide to build a startup around that
and commercialization. “We need some Canadian success stories. technology. That’s when it comes into my portfolio. I help them do a market
I want to see them stick through it…but to do that you need assessment; help them write a business plan; I can link or network them with
access to a significant amount of capital, and the amounts that people who could serve as a management team.
float around to support biotech in Canada are minuscule com-
pared to what they are in the U.S.” How do you define an entrepreneurial researcher? Do the two go
The fact that Canadians are quick to sell out is one of hand in hand?
Crossley’s biggest pet peeves. “Up here, when we get that initial Someone who has expressed an interest in starting a company or has a
early offer of acquisition from a U.S.-based company for a couple willingness to work with you—that’s important. They must have some sense
million dollars, we sell out.” of what it means to be an entrepreneur. Not many people I deal with are
She agrees this trend is fueled by a lack of venture capital, entrepreneurial-minded. They are technology minded—that’s what they do.
which then drives Canadian firms south for funding, which in And it’s not a bad or a good thing, it’s just that’s their brain. People who have
turn usually invites the pressures of moving operations to the U.S. that entrepreneurial bent are rare. There aren’t a lot of people who are
“We’re never actually able to achieve a critical mass of startup willing to take the high stakes and the risk that entrepreneurs do. They are a
companies that have gone beyond seed stage. We create tons of unique breed.
value up here, but we’re never the ones who capture it. If we’re
going to change our culture in Canada, we need larger funds, but So do you have your work cut out for you then?
“I’ve come back to Canada to start
For me, what’s really important is to be able to prove that there’s a market,
and know who those customer are and what their needs are. The challenge
and lead a Canadian-based, but glob-
then is to take it and say ‘ok now we need to find someone who will take this
and champion it’. We have a couple companies (Adnavance Technologies Inc.
ally focused, company that through
and MCN BioProducts Inc.) to draw from—both spearheaded by Todd L. Lahti,
its success will contribute positively
a serial entrepreneur or CEO-for-hire, basically. He has the business
background. People like him are very important to that entrepreneurial cycle
to the Canadian space.”
and getting the research into the market.
Would you say Canada, or Saskatchewan, has a bio-entrepreneur-
ial culture?
maybe fewer of them. It’s a tough problem to overcome.” I think it’s growing. But the biotech sector is technology based, and I think we
Axela’s Ganske agrees new programs and approaches are have this drive and understanding of how important it is, but we don’t have
needed. He admits progress has been made to increase the the depth of the entrepreneurial people we need to move it forward.
SRED levels, but argues the only way to get cash back, is to Among other things, we need mentors and mentorship programs to help
spend it in the first place. He points to the labour-sponsored drive this, but we haven’t set up a system where we can engage those people
funds of years gone by, which were allowing capital to start build- who have the battle scars and the experience and can lend that to the young
ing companies up, only to be cut in less than a five-year period. “I people. I think [universities] need to start developing those networks. Many
was left questioning the logic of the individuals [running the universities have ‘entrepreneur in residence’ programs. That sort of hand-
show] and their knowledge of this space, as investments in this holding, and roll-up-your-sleeve-and-get-involved programs are great. I think
space take much longer to build value” Ganske says. “Now, we’ve that’s the model we need to start looking at.
unfortunately created a shopping mall for U.S. venture capital Entrepreneurial training and education is also important. It’s important to
guys. They can come in here and buy stuff on the cheap because get undergrads, grads, etc. thinking about the value of their research. We
there’s no money to support it.” need to let them know commercialization is an option. There are some simple
The funding gap, Ganske says, exists particularly beyond the rules that they need to know. For example, if they think that commercializing
seed stage. “Unless we find a way, quickly, to infuse some capital
22 Bio Business October/November 2008

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24. to bring those companies from that point, they will simply get
rained out…they will run out of capital. It’s unfortunate because might be a potential or viable route for them, don’t publish. Our business
we need to get this momentum moving.” school is starting an entrepreneurial centre and they’re going in to sectors—
not just natural sciences, but also kinesiology and social sciences—to show
Crossley cites her own journey with Natrix as an example of them what’s possible. I think that’s an exciting place to be.
strategically avoiding some of the potential pitfalls. Three years
ago, the technology behind Natrix was still in a university lab at Do programs like BioVenture incorporate many of these
McMaster in Hamilton. Natrix develops a membrane-based plat- components?
form technology to improve the safety and economics of the The initial phase is just to submit your idea. Then the five people who are
biotechnology separation processes required to purify proteins and shortlisted go through a few months of a mentoring process—we hook them
other life sciences compounds. With the technology, the compa- up with lawyers, or tech transfer people. We’re giving them very specific,
ny hopes to create novel, high value products for specific applica- hands-on guidance on market assessment, and getting to know your
tions, including large-scale bioprocessing, blood processing, and customers and getting them engaged before you finish the product. That’s
food and beverage processing. According to Crossley, the technol- really hard for kids with a technology background to understand, but that’s
ogy is the first new thing to happen in separations in decades, and where we’re going with them.
has a total addressable/accessible market of $9 billion. Working with these young people and their ideas is so exciting. It’s so
“I think this company will be worth half a billion dollars with- exciting to see their energy and passion for what they’re doing. Most of them
in five years at the outside. It is a very attractive candidate to exit are like sponges—they just want to learn how to do this. It’s quite rewarding
either via IPO or MA. It’s a good story if you’re an investor.” for us as well.
The proof is in the pudding. The company initially raised
$2M in seed financing through MDS Capital and BDC Venture Are all universities grappling with these same issues and
Capital. “They gave us $2 million instead of the usual $500,000 challenges?
investment. This really accelerated our progress by just allowing Yes. Tech transfer offices are becoming quite entrepreneurial in their
us to concentrate on developing our products,” she says. approaches. There is a great debate within tech transfer offices: Is the best
“This company will be worth half a
way to license your technology out, and get measured on how many dollars
you bring in immediately and how many patents you license? Often the
billion dollars within five years…It’s a
traditional way that tech transfer offices commercialize technologies is to
good story if you’re an investor.”
license them—usually to the U.S. or Europe. Alternatively, would it be better
to be measured on your regional economic development, the development of
innovations, and are your efforts to create that sense of entrepreneurialism in
your region? More universities are starting to focus more on startups, and
This spring, Natrix leveraged the progress it had made on the growing them locally to be successful.
initial seed investment to attract $19 million of financing from
BDC, JovInvestment Management, and a new lead U.S. investor
—D.E. Shaw Ventures. the time to exit is reasonable, there is money out there. “In my
In the last two years, Natrix assumed ownership of the tech- experience there is a lot of money out there. If you have a real
nology they initially licensed from McMaster, leased 25,000 fundable value proposition, you’ll find the funding.”
square feet of space in Burlington, Ontario, built a state-of-the- But success, she says, also comes down to ensuring you have
art lab and manufacturing facility, and grew its staff from six to the right management team in place to turn your company into
37 people, including sales and product managers in the U.S. In a success story—essentially the right mix of technical knowl-
addition to selling directly to high-volume markets, the company edge, business acumen and entrepreneurial drive. “With tech-
recently launched its first group of products into the research nology companies, leaders have to have some technical depth to
market through distributor VWR Canada. Incidentally, the com- position the company and products externally. But investors rely
pany has subcontracted some work to Therapure’s new facility. on the business skills to carry the company to revenue, growth
Crossley says they looked south for some funding because of and ultimately exit,” says Crossley. “There is a tremendous depth
the size of the investment needed: “We needed some deep pock- of VP talent in Canada, she continues. You don’t have to bring
ets. But we were very clear with our investors that we would not in a U.S. team, but you do have to be discriminating about what
move to the States. Collectively we said: ‘We are going to be a you’re looking for.”
major global player and we will do it from Canada, not the U.S.’ Ganske says he initially brought in two U.S. individuals to
It did weed out some investors—those who assumed we would lead various parts of Axela’s business. Today, however, the com-
move to Boston.” pany boasts more Canadian management than U.S. “I’m cog-
While money is one of the largest hurdles, Crossley believes if nizant of what Axela is doing to build that next group of biotech
you have a truly compelling value proposition, and it looks like leaders in the Toronto space, based on the shared experience of
24 Bio Business October/November 2008

25. Special Report
the current management team,” he says.
Ganske disagrees with those who say Canada doesn’t have the
right skills or the right people. “We have found very good
Canadian management that we’ve been able to put into place. At
the same time, when you have the capital support, if there is
domain expertise you need to reach down into the States to get,
you can do that,” he says “People will come north—but they won’t
come north without the capital and they won’t come north with-
out understanding the support is there to drive the company to
the finish line.”
“In my experience there is a lot of
money out there. If you have a real
fundable value proposition, you’ll
find the funding.” go to the States and make many times what I’m making. That is
what drives many people’s decisions on where the talent goes.”
The U.S., for instance, he says, also boasts robustness and
Money, after all, makes the world go around. And it’s ultimate- vibrance of activity and deal-making, which he says also
ly what lures many Canadian entrepreneurs south, or overseas for stimulates the structure of the industry and a lot of the entrepre-
that matter, Wellner adds. “As an executive, I’ve taken a significant neurial thinking.
pay cut to come back to Canada, but that’s a personal choice I’ve Crossley argues another big challenge in Canada is that
made for my children and my wife, but it’s a 1 9/9/08 “I could AM Page 1
Xerox Engineer Dimensions:Layout cost,” he says. 10:48 Continued on page 28...
Xerox’s Nan Xing Hu was
th
just awarded his 74 U.S.
patent. Would you
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ground in innovation at the Xerox Research Centre of Canada. Today, more and more successful companies
are tapping into the power and talent of the skilled immigrant workforce. These companies have discovered
that skilled immigrants bring insights and fresh thinking to the table, along with their degrees. Given that
the Ontario workforce is expected to shrink over the next few years, isn’t it time your company took advantage
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Do yourself a favour. Hire a skilled immigrant.
Funded by the Government of Ontario
October/November 2008 Bio Business 25

26. Special Report
Entrepreneurial Beginnings
President and CEO Rocky Ganske on Axela Inc.’s journey to success
“From a technology living on a bench in a university to understanding of the protein complexes involved in heart
being a commercially distributed product in the market on attacks, for example), and ultimately led to the creation of
a worldwide basis, it was a pretty rapid ride,” says Rocky the company’s commercial system.
Ganske, president and CEO of Axela Inc. The intent of the business is to continue to push into the
Recently named a 2008-2009 winner in the life sciences research space, he says. Participating in the research mar-
category of the Ottawa Centre for Research and Innovation ket provides a pipeline of novel discoveries that form the
(OCRI) / Borden Ladner Gervais Canada’s Top 10 basis for future multiplex diagnostic offerings. “In the
Competition, Axela has commercialized a pro- meantime, you still drive clinical-level or diag-
prietary technology for real-time protein detec- nostic-level margins off of those products with no
tion. The company’s products provide life sci- regulatory clearance needed to sell them into the
ences and clinical researchers with simple tools clinical research space. It makes for a very inter-
and reagents to study interactions, expand the esting business model.”
utility of traditional immunoassays and access And a valuable proposition for investors too.
unique categories of diagnostic markers. Since Axela is working through the clinician
Privately-held, Axela’s major investor is researchers, Ganske says, it has access to all the
VenGrowth Private Equity Partners Inc. IP from studies/trials without having to pay for it.
The ride began roughly 6 years ago, when Axela has always had unique history from an
Ganske—having found his entrepreneur legs fol- investment standpoint, he adds. “Founder
lowing years in “corporate America” with start- “It had reached Cynthia Goh will tell you the way Axela got
up-turned-public-success-story ThirdWave Tech- the same started in the first place was that she didn’t know
nologies—was approached about a Canadian chicken and egg that you couldn’t go ask a venture capitalist for
innovation that needed a business leader. point that all money to run an experiment.”
VenGrowth asked Ganske to look into the Prime Access Technology Ventures took a
companies do:
technology—born out of Dr. Cynthia Goh’s gamble, however, giving her a small cheque to
lab in the chemistry department of the You need a run the first experiment. “Axela was literally
University of Toronto—and assess whether is management incorporated on the day of the first experiment,”
was worthy of development capital. “I flew team, but you he says. Subsequently, Prime Access—and a sin-
into Toronto in November 2002—which if I don’t have any gle angel investor, Royal Bay Capital—stepped
wasn’t already in Wisconsin—was probably money; and you in to help steer company activities. The duo had
the wrong time to try and recruit CEOs for an need money, invested about $1 million by the time VenGrowth
entrepreneurial business.” but you can’t added its money to allow the company to move
Ganske asked VenGrowth to give him a get it without forward commercially.
chunk of cash (far less then they had initially “It had reached the same chicken and egg
a management
intended to put in) and six months to unearth point that all companies do: You need a man-
and prove the technology’s worth. “Within six
team.” agement team, but you don’t have any money;
months, I would either produce a business plan and you need money, but you can’t get it with-
with a product aiming and positioning document, as well out a management team,” says Ganske. And that’s where
as a budget for the next two or three steps, or I would tell it was when VenGrowth started looking for a CEO.
VenGrowth to put their money into something else.” Within “VenGrowth has been so supportive, and without them
four months, Ganske agreed to take the helm. Axela would not be where we are today. They are truly
He began by building a strategy for the business that brilliant investors and business people.”
allowed it play in the research space in parallel with the “We’ve built a company that we’re very excited about.
diagnostic space. It put its first beta instrument into the The technology risk is gone, the clinical proofs are there,
hands of researchers two and a half years ago. Feedback and it’s now all about commercial execution. We’re look-
from that ‘test’ brought several specific clinical applications ing forward to some significant revenue ramp as we go. It’s
to bear (John Hopkins University was able to gain an an exciting place to be.”
26 Bio Business October/November 2008