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Drug R&D investment in B.C. marks ‘global shift'

British Columbia is challenging Quebec as a hub for pharmaceutical R&D in Canada, attracting a flurry of new investment as drug multinationals close up shop in Montreal.

The B.C. government will announce Tuesday that it is pumping nearly $40-million into two private-public research institutes in Vancouver: $29-million for the Centre for Drug Research and Development at the University of British Columbia, and $10-million for Genome British Columbia.

But it's the investment coming from outside the province that impresses B.C. Health Minister Mike de Jong.

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"We see a shift happening, a global shift," Mr. de Jong said in an interview. "We see more people recognizing that British Columbia is the bridge between Canada – and sometimes North America – and Asia."

Roughly $1.5-billion of mainly private-sector investment has flowed into the province's life-sciences industry in the past 18 months, including new investments in local startups such as Welichem Biotech Inc., Allon Therapeutics Inc., Tekmira Pharmaceuticals Corp. and Xenon Pharmaceuticals Inc., according to B.C. government figures.

The industry now employs 11,700 people in British Columbia and includes 340 companies.

"We decided some time ago that if we were smart and provided the right environment, that eventually national and international agencies would begin to take advantage," Mr. de Jong explained. "That's part of the story that has emerged."

Among the key factors driving investment is the province's low business tax rate, the creation of a pharmaceutical sciences faculty at UBC, the university's large medical school, and a growing pool of skilled researchers, Mr. de Jong said.

While British Columbia has made strides in basic drug research and commercialization, the province is still a small player in manufacturing, he noted.

"The next step is to marry some of that research and development of technology with production capability on the West Coast," Mr. de Jong said from Boston, where he is attending a major international biotech conference.

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"A critical mass has been achieved where that becomes the logical next step."

Quebec's pharmaceutical industry has been hit hard by a series of closings of R&D centres by drug companies such as AstraZeneca, Johnson & Johnson, and Merck, resulting in the loss of hundreds of jobs. Earlier this year, French pharmaceutical company Sanofi-Aventis laid off 100 workers as part of a downsizing of its research and development centre in Laval, Que.

Canada's drug industry has come under criticism in recent months for failing to live up to pledges made in the 1980s when Ottawa extended patent protection for pharmaceuticals. At the time, drug makers vowed to spend the equivalent of 10 per cent of their annual sales on R&D in Canada. The ratio has been consistently below that threshold since 2001, according to the Patented Medicine Prices Review Board.

Clinical trials typically account for a large percentage of pharmaceutical R&D, and companies are doing less trials in Canada. Applications to test brand name drugs dropped to 596 in 2010, from 777 in 2006, according to a recent report.

The federal government is once again facing pressure to extend patent protection for drugs – both by Europe in the Canada-European Union free trade talks, and by the United States as a condition for joining the Trans-Pacific Trade Partnership.

Vancouver's Centre for Drug Research and Development was created in 2007 with contributions from Ottawa and the B.C. and Alberta governments, as well as several drug companies. Its aim is to turn university research into commercially viable products.

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Genome B.C. invests in and manages large genetics-related research projects.

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About the Author
National Business Correspondent

Barrie McKenna is correspondent and columnist in The Globe and Mail's Ottawa bureau. From 1997 until 2010, he covered Washington from The Globe's bureau in the U.S. capital. During his U.S. posting, he traveled widely, filing stories from more than 30 states. Mr. McKenna has also been a frequent visitor to Japan and South Korea on reporting assignments. More

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