Quebec's life sciences industry, which has suffered the loss of thousands of research and development and manufacturing jobs in recent years, is getting a booster shot.
Montreal-based company Thrasos Therapeutics says it has completed a $35-million (U.S.) financing deal to develop THR-184, its lead product candidate for the treatment of acute kidney injury (AKI).
The venture capital funding is part of a new approach the established pharmaceutical companies – under pressure to better control costs – are taking to research and development: rather than do it in-house, they are investing and partnering with upstart companies doing innovative work.
The Thrasos financing was led by SR One, the global corporate VC arm of pharma giant GlaxoSmithKline. SR One seeks out promising emerging life sciences companies pursuing innovative science.
Funding also came from the GSK Canada Life Sciences Innovation Canada Fund, a $50-million (Canadian) fund launched last year by GlaxoSmithKline to promote commercialization of early stage breakthrough research in Canada.
Among the five additional investors are VC firm Lumira Capital Corp., which recently received funding from Merck & Co.
Two years ago, Merck closed its highly regarded R&D centre in Montreal, one of the developments contributing to the bleeding of pharmaceutical jobs in Quebec.
The job losses and plant closures taking place at big pharma companies around the world consolidate operations and slash costs as they struggle with the fallout from fewer blockbuster drugs coming to market, expiring patents and the economic downturn.
Many of these foreign companies insist they remain committed to innovation and R&D in Canada, but are increasingly shifting to a model in which they farm out the risks to smaller or upstart companies in order to concentrate on later stage drug development and marketing.
But some observers question whether these initiatives will ever replace the thousands of jobs lost as a result of big pharma cutbacks in R&D and manufacturing in Canada.
"The financing underscores our commitment to fostering innovation in the Canadian life sciences community and our mission to invest in early stage breakthrough technology through the GSK Canada Life Sciences Innovation Fund," Jens Eckstein, president of SR One and lead investor of the financing, said in a statement Thursday.
"Thrasos' lead therapeutic program for acute kidney injury has demonstrated strong potential in preliminary studies and we are pleased to support this program and other potential opportunities in renal disease, a field of huge unmet need."
AKI is the temporary loss of renal function that can occur after cardiac and/or vascular surgery, inflammatory disease, trauma or the administration of contrast dye for imaging.
Thrasos says the injection of new financing will allow it to advance THR-184 through Phase 2 clinical trials.
Among the other investors in the financing are SW Co., Advanced Technology Ventures (ATV), Fonds de solidarité FTQ, MP Healthcare Venture Management and Pappas Ventures.
Rav Kumar, vice-president for R&D operations at GSK Canada, said the move on the part of large companies to externalize R&D is not unique to Canada.
"There is so much good science outside the pharmaceutical industry, we want to make sure that we're tapping into that," he said in an interview.
Companies can draw upon a wealth of resources from outside, including in academia and government, he added.
The goal is to use seed money to nurture budding drug-development firms across Canada, he said.
"This model has potential to do so much more than the previous model of R&D.
"There is a fantastic foundation of science and capability in Canada. What's missing is that commercialization bridge."
Jens Eckstein, president of SR One, said fresh money to fund early-stage research companies could reach the $1-billion range within 5 or 6 years.
"The science is great. There just hasn't been enough risk capital," he said.