Skip to main content

Two years after closing its world-renowned research and development centre in Montreal, pharmaceutical giant Merck & Co. is kicking in about $40-million to a pair of new funds that will invest in early-stage life sciences companies in Quebec and abroad.

The company will announce its investment next week in the funds, which will be managed out of Montreal by Lumira Capital Corp., a venture capital investment firm formerly known as MDS Capital. The Merck Lumira Biosciences Fund, a $50-million capital pool, will invest primarily in Quebec companies, while the $100-million Lumira Capital II fund will have a broader geographic mandate, said sources familiar with the details of the announcement.

Teralys Capital, a technology venture fund manager that manages a combined $700-million from the Quebec government, the Caisse de dépôt et placement du Québec and Quebec's labour-sponsored Solidarity Fund QFL, will also contribute about $40-million, with the remaining $70-million coming from a mix of institutional and individual investors, the sources said.

Story continues below advertisement

A Merck spokeswoman declined to confirm the details, which will be announced at a press conference Monday in Montreal in the presence of two provincial Liberal cabinet ministers.

The presenters will likely play up Merck's investment as a positive move for Quebec, but the commitment to highly speculative startups will be little replacement for the exodus of thousands of high-paying drug research and manufacturing jobs from Quebec in recent years. The province, and particularly the Montreal area, where Quebec's pharmaceutical sector is concentrated, have suffered as foreign companies, facing a dwindling pipeline of blockbuster drugs, have rationalized costs and consolidated R&D in fewer global hubs at the expense of their Canadian subsidiaries.

The Merck investment "is a way for Big Pharma to externalize the risks of research and development and reposition themselves to focus only on the latest stages and marketing of drugs," said Marc-André Gagnon, a professor with Carleton University's School of Public Policy and Administration who specializes in the pharmaceutical industry. Merck is among several multinational drug companies, including Johnson & Johnson and GlaxoSmithKline, that have been providing seed money to help startups develop new treatments.

Merck typically spent over 10 per cent of Canadian revenues per year on R&D domestically before shutting down its therapeutic research facility in Montreal's west island in 2010. At the time, it vowed to invest $100-million over five years in research and development in Quebec – an amount Mr. Gagnon estimates is close to what the company spent annually on R&D at its Montreal facility. The Whitehouse Station, N.J.-based company last year committed $5-million to the non-profit Quebec Consortium for Drug Discovery, which supports basic research in hospitals and universities, and $7-million to the AmorChem Quebec life sciences venture capital fund.

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter
To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies