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A few years ago, Medicine by Design hosted Harvard University’s David Walt, a scientist-entrepreneur, on a panel about strengthening the regenerative medicine ecosystem in Canada, at the Medicine by Design annual symposium.
Walt is a pioneer of gold-standard genomic analysis technology, a core faculty member at the Wyss Institute at Harvard University, and a founder of many life sciences startups including Illumina Inc. and Quanterix Corp. He’s indisputably qualified to speak on these matters.
Walt noted the similarities between Toronto and Boston — both have a concentrated community of world-leading researchers and institutions. He said, “That’s where most of these ecosystems start. They start with the intellectual capital, then they attract the venture capital, and then they attract more, and it just becomes a self-fulfilling enterprise.”
The funding of Medicine by Design, a $114 million* grant from the Government of Canada to enable large-scale regenerative medicine research, translation and training initiatives, was an unprecedented investment into the intellectual capital that Walt referred to.
Since its launch, Medicine by Design has built a regenerative medicine hub here in Toronto that will be sustainable beyond the end of that large-scale funding.
Our flagship research and early-stage commercialization programs have supported teams with more than $75 million in funding. These programs brought engineers, scientists, clinicians and other experts together to advance aims like repairing heart tissue after a heart attack, eliminating insulin injections for diabetes and reprogramming cells in the brain to restore function after a stroke.
At the time of the panel, Walt was a director of the Mass General Brigham Center for COVID Innovation, and he put a spotlight on how COVID-19 shook up the biotech industry. Along with rapid technology development, we saw a boom in investment. In 2019 and 2020, the Canadian cell and gene therapy sector raised $2 billion in venture capital and $5 billion in public equity. (Out of the Lab, into the Patient: Canada’s Commercial Opportunity in Cell and Gene Therapy Manufacturing, April 2022).
While indications are now that investments in the biotechnology sector in general are down, with 2023 numbers that are less than one-third of their 2020 peak, strong investments into our intellectual capital must continue. To paraphrase Walt again, venture capital follows strong intellectual capital.
But we must be proactive. Strategically, investments from government, nonprofit or private partners in the space between the research and discovery phase and company creation, need to be prioritized. In a 2021 survey from International Society for Cell and Gene Therapy (ISCT), investors said that “clinically significant data” is the number one factor in influencing their decision to invest.
We know that securing funding for that in-between stage is a big challenge for Canadian researchers. Governments often fund discovery research, but that funding only goes so far. Without reliable funding sources to take the discovery on a path to market, the “valley of death” is often insurmountable. This is one of the reasons that Medicine by Design started its Pivotal Experiment Fund to support a portfolio of innovations spun out of Medicine by Design-funded research with high commercialization potential.
The aim of the Pivotal Experiment Fund is to generate “go/no go” data that can drive future investment. Having a strong technology is important – in the same ISCT survey more than 20 percent of investors ranked it as their top consideration – but it seems for more investors, results matter.
We have all the ingredients, especially the talent, to attract investors to Canadian cell and gene therapy companies. In the past 10 years, dozens of regenerative medicine startups have been established in the Toronto region alone, employing hundreds of people. With strategic investment, hundreds can become thousands.
Cell and gene therapies hold a lot of promise to treat some of the most intractable diseases facing humanity. They do have risks. But providing more support so that the strongest research can push through to the early stage of development and attract investors will bring plenty of reward.
*all figures in Canadian dollars
