BIOTECanada is the national association representing Canada’s biotechnology sector. The more than 240 member companies of BIOTECanada reflect the broader Canadian biotech ecosystem which includes large multinational pharmaceutical companies, early stage/start-ups, larger pre-commercial companies, venture capital, universities, incubators, and accelerators found across the country with hubs in every province.

Recommendations

Fund greater ambition for regulatory excellence and leadership to ensure Canada successfully launches innovation and attracts innovation from other jurisdictions
Establish a competitive environment for the attraction and effective deployment of investment capital to turn research into products and scale Canadian biotech companies
The federal government should plan for a recurring annual budget starting in 2025 to support Canadians’ access to innovative, effective, safe and cost-effective vaccines.

BACKGROUND

Following the experience of the pandemic, governments worldwide have recognized the significant strategic, social, and economic value of a competitive domestic life sciences and biomanufacturing sector. Canada has made significant investments into building on the domestic life sciences ecosystem and enhancing Canada’s biomanufacturing capacity through Canada’s Biomanufacturing and Life Science Strategy, and Health and Biosciences Economic Strategy Table report. These investments and corresponding life sciences/biomanufacturing strategies will accelerate the growth of Canada’s biotechnology sector from start-up companies to commercially viable companies beyond just a biomanufacturing response in a crisis. Importantly, the implementation of the federal biomanufacturing strategy, co-led by ISED and Health Canada, has begun to address the barriers hampering the growth and competitiveness of Canadian life science SMEs.

There is now an opportunity to capitalize and enhance Canada’s research and development (R&D) capacity, particularly as other OECD countries are increasing investments into their biotech sectors (Source: https://data.oecd.org/rd/gross-domestic-spending-on-r-d.htm). Following the pandemic, most other leading economic jurisdictions in the world are also investing heavily into their domestic life sciences sector’s as they too understand the vital role biotechnology innovation is playing in the global economy and health security. Globally, the competition for biotech ideas, companies, talent, and investment has never been more intense. Accordingly, it is imperative that Canada be aggressive and ambitious to establish a globally competitive innovation environment to fulfil the maturity and capacity envisioned in the Biomanufacturing and Life Sciences Strategy and encourage companies to invest and grow here in Canada. Technologies such as artificial intelligence (AI) in biotechnology can speed up drug discovery, deliver analytics, accurately diagnose medical conditions, edit gene structures, develop personalized medicine, and do much more to accelerate next generation biotechnologies.

In addition to providing improved healthcare options for Canadian patients, a modern and agile regulatory system is a critical element in the ability of Canadian biotech companies to attract investment and move their innovations forward. Today, there are several Canadian biotech companies poised to become globally commercial. There are dozens of companies across the country following not far behind and focused on developing innovations in technology areas including regenerative medicine and health AI expertise and rare diseases. In this context, a modern and agile regulatory system is increasingly important for not only the treatments and therapeutics coming from global companies but also for the advancement of Canadian-based biotechnology companies. Accordingly, now is a crucial time for Canada’s regulatory system to recognize the emerging technologies and take steps to establish an equally advanced regulatory oversight capacity. A modernized and agile regulatory capacity stands to not only offer Canadians better healthcare options, but it can also make Canada a global regulatory leader and destination for new technologies.

For biotech SME’s, investment capital is the lifeblood of successful research and innovation. However, it is important to recognize that investment is extraordinarily mobile; it will go to wherever it is provided the greatest security and return. Canada is home to numerous emerging and high growth biotech and vaccine companies. Access to significant capital is critical to them becoming anchor companies.

It is well proven vaccines are an important tool in the prevention of infectious diseases and contribute to reducing the use of healthcare resources and maintaining Canadians health and productivity. The World Health Organization (WHO) states “Immunization is a key component of primary health care and an indisputable human right. It’s also one of the best health investments money can buy. Vaccines are also critical to the prevention and control of infectious disease outbreaks. They underpin global health security and will be a vital tool in the battle against antimicrobial resistance”1. In Canada, the Canadian Immunization Guide says “Immunization is one of the most important accomplishments in public health that has, over the past 50 years, led to the elimination, containment and control of diseases that were once very common in Canada”2.

Despite the well-established value that vaccines provide, Canadian governments’ investments in vaccines is estimated to be less than 0.2% of total healthcare spending (excluding COVID-19)3. With such a strong value proposition for individual health, healthcare system efficacy and outcomes, industrial and social productivity, vaccines should be a cornerstone of Canadian healthcare management and be funded adequately to ensure the benefits from vaccination can be achieved by every Canadian and jurisdiction. Of all the public health strategies, few, if any, rival vaccines’ ease of implementation, efficacy, predictable outcomes, and sustainability.

BIOTECanada offers the following recommendations in response to the questions posed in relation to Budget 2025 to:

I. Fund greater ambition for regulatory excellence and leadership to ensure Canada has the ability to launch innovation and attract innovation from other jurisdictions;

II. Establish a competitive leading environment for the attraction and effective deployment of investment capital to turn research into products and scale Canadian biotech companies; and,

III. The federal government should plan for a recurring annual budget starting in 2025 to support Canadians’ access to innovative, effective, safe and cost-effective vaccines.

Industry Recommendations for Budget 2025

I. Ambitious Regulatory Leadership

An effective regulatory environment ensures safety while encouraging the introduction, acceleration, and adoption of biotech innovation. The speed at which our governments responded to the COVID-19 pandemic, whether to create and launch relief programs, simplify and shorten procurement processes or expedite clinical trials, shows us that we can and must aim higher. A high performing regulatory system that is predictable, efficient, consistent and transparent, so as not to present barriers to business investment, innovation and ultimately, economic growth and values improved outcomes that benefits Canadians. A competitive regulatory system will accelerate the growth of Canadian companies and facilitate the attraction of innovation to Canada for Canadian patients. Canada’s ambition to be a world leading regulator is key, particularly as new game-changing technologies are developed and deployed such as mRNA, cell and gene therapies, gene editing, and artificial intelligence.

Canada must implement modernized regulatory processes, aligned globally and harmonized to attract technology to Canada to ensure Canada establishes regulatory capacity to draw the next generation of technologies into use for and by Canadians.

Health Canada significantly updated and increased the cost recovery fees charged to companies to review submissions in past years and continues to increase fees on an annual inflationary basis with the goal to address the volume of work as well as added complexity from globalization, technological advancement and more sophisticated data and systems such as artificial intelligence (AI). The predictability in regulatory program delivery is important to continue to be agile and responsive to the needs of both Canadians and industry.

Recommendation

Health Canada must be resourced to deliver services and execute on modernizing regulations to remain internationally competitive, meet performance standards, and follow through on Canada’s ambition to create a regulatory environment that is “Best in Class” to attract global biotech companies as investors/partners in the ecosystem and as providers of next generation of therapeutics for Canadians.

II. Increased Availability of Investment Capital

Canada must avoid any measures that create a significant disadvantage vis-a-vis our global competition in biomanufacturing and life sciences. While the initiatives underway to enhance the SR&ED credit, develop a patent box mechanism, and mobilize pension funds are timely and important, the industry is very concerned the Budget’s proposed capital gains tax increase presents a step in the opposite direction which will undermine the ability of companies to attract the talent they need and will slow the sector’s momentum more broadly. The tax increase will also negatively impact the effectiveness of the investments the government itself has made in relation to the Biomanufacturing and Life Sciences Strategy. BIOTECanada strongly urges the government to take immediate steps to draft the legislation for the budget measure so it does not undermine federal and provincial life sciences strategies and the company growth those policy commitments are driving.

Investment is key to driving innovation forward. Global competition for investment will go to where it is best rewarded. To capitalize on biotech’s generational moment, now is the time to accelerate access to capital.

Recommendation

Venture Capital

The government should invest $350 million to establish the Life Sciences Venture Capital Catalyst Initiative (LS-VCCI), a life sciences venture fund of funds. With a 2 to 1 investment match from private sector, the $350M foundational investment would bring the total investment envelope to $1 billion to be created and deployed over 10 a year horizon (@ $100 million year).

Non-dilutive Investment Capital

Non-dilutive capital is important for the early stage of company creation and growth. A non-dilutive funding measure would jump start Canadian innovation at an early stage and provide it with a stronger possibility of scaling and staying in Canada because it is funding without giving up any equity or ownership of the business.

Meet federal research and development needs of health security
Increase private-sector commercialization of innovation derived from federal research and development funding
Stimulate technological innovation
Foster and encourage participation in innovation and entrepreneurship by women and socially/economically disadvantaged individuals
Foster technology transfer through cooperative R&D between industry and research institutions

Recommendation

Canada builds a non-dilutive investment pool to capitalize on and support the scaling up of the companies emerging from the biotech ecosystem with a 3.2% of the extramural research budget (~$320 million) minimum spend each year.

III. Improve access to vaccines for Canadians

Vaccines are proven to be effective and affordable but Canada has fallen behind in protecting its citizens from vaccine preventable diseases. Vaccines are unique and possess features that are very different from other medicines and health interventions. With the resurgence of measles in recent months, a vaccine-preventable disease, Canadians have been reminded about the complexity and rapid development of public health risks faced by Canada in a global context. Vaccines can and do play a critical role in addressing many public health challenges. Where old vaccine preventable diseases, and novel infectious diseases emerge, our industry works to mobilize the full scope of our scientific and manufacturing resources to respond.

Provincial and federal governments, working alongside public health officials, can improve health security of Canadians and increase access to vaccines to help reduce health care costs, keeping Canadians healthier today and for the long term. This is particularly relevant when considering the highly effective immunization needs of Canadian society as it emerges from this current pandemic while establishing robust public health practices for ongoing protection to many existing debilitating illnesses. As Canada embarks on the next phase of public health preparedness these vaccine coverage gaps will need to be addressed to improve the health security of Canadians.

Recommendation

The federal government should plan for a recurring annual budget starting in 2025 to support Canadians’ access to innovative, effective, safe and cost-effective vaccines.

Sincerely,
Andrew Casey
President & CEO

BIOTECanada’s 2025 Pre-Budget Submission