FEATURE
Globetrotting firms: Canada s health biotechnology
collaborations with developing countries
Monali Ray, Abdallah S Daar, Peter A Singer & Halla Thorsteinsdóttir
A survey of Canadian biotech firms reveals that their biotech collaborations with developing countries are not only
significant but also increasingly reciprocal in terms of the exchange of financial resources and technological know-how.
o stay competitive in health biotech, North-South collaborations: Canada as a tries. Canada is ranked sixth in the world in
Tfirms have had to form strategic alliances model terms of number of publications in interna-
that often cross international borders and There are several reasons why North South tional peer review journals11, and it also ranks
increasingly can involve companies in devel- collaboration is valuable for developed coun- second only to the United States12 in terms
oping countries. Capacity in the health bio- tries health biotech firms. Emerging econo- of the number of health biotech companies.
tech field is no longer limited to a handful of mies, such as China, India and Brazil, have Even so, its commercialization record is weak.
high-income Western countries. Developing large populations, with increasing spending Only ten firms account for 70% of the market
countries themselves have been building up power and high demand for health biotech capitalization of all Canadian biotech firms,
their expertise1 and starting their own firms products2 5. Collaborating with local partners and revenues predominantly come from the
in the field2 4. is a first step in being able to access these vast domestic market13. Furthermore, even though
Although the potential benefits of collabo- markets. Furthermore, North South collabora- the United Kingdom had a similar number of
ration with partners in developing countries tion can help mitigate the high risks and costs biotech firms and patents to Canada in 2003, it
( North South collaboration ) in health bio- faced in health biotech product development. had three times more revenue than Canada13.
tech are considerable, relatively little is known For example, the costs of manufacturing, clini- Traditionally, Canadian firms have focused on
about whether these benefits are being realized cal trials and R&D can be lower in developing forming alliances with firms just south of its
and whether  Northern firms are globalizing by countries, and thus North South collabora- border, seeking market opportunities in the
forming linkages with  Southern partners. The tion may reduce the cost of the overall drug United States14,15. To succeed in health bio-
aim of this study is to help fill this gap by pre- development process. Finally, North South tech, a more global approach is required, and
senting results from a survey of firms working collaboration can help firms access comple- this can include partnerships with emerging
in the health biotech sector in Canada about mentary assets. The multiplicity of scientific economies and developing countries16.
their collaborations with partners in devel- and technical expertise needed to enable health To gauge the frequency and characteristics
oping countries. Even though the focus is on biotech product development can be found of Canada s collaboration with developing
Canada s experience in North South collabo- worldwide, including within firms and insti-
ration, the opportunities we identify through tutions in developing countries1,6.
our research can also be harnessed by biotech On the other side, firms in developing
companies in other Northern countries. In the countries enter North South collaborations
28%
following analysis, we examine the extent of for reasons similar to those of their Northern
the collaboration of Canadian health biotech partners. They too want to collaborate to
firms with partners in developing countries, access new markets in the North with popu- 46%
map where the main linkages lie and explore lations that have a high spending power4,7,8.
the main characteristics and outputs of these Firms in developing countries also seek col-
collaborations. laboration with companies from the North
22%
to reduce risk in product development and to
Monali Ray, Abdallah S. Daar, Peter A. Singer access financing7. Moreover, they seek these
4%
and Halla Thorsteinsdóttir are at the types of collaborations to gain access to sci-
McLaughlin-Rotman Centre for Global Health, entific and technical expertise in developed
North-North only
University Health Network and University of countries3,7,9. Regulatory expertise can be of
Neither North-South nor North-North
Toronto, Toronto, Ontario, Canada; and Halla particular importance to firms in developing
Both North-South and North-North
Thorsteinsdóttir is also at the Dalla Lana School countries that are taking their first steps in
North-South only
of Public Health, University of Toronto, Toronto, innovation10.
Ontario, Canada. We chose to focus our study on collabora-
Figure 1 Extent of international collaboration by
e-mail: [e-mail] tions between Canada and developing coun- Canadian health biotech firms.
806 VOLUME 27 NUMBER 9 SEPTEMBER 2009 NATURE BIOTECHNOLOGY
© 2009 Nature America, Inc. All rights reserved.
FEATURE
Canada
China
Turkey
Iran
Tunisia
Lebanon
Egypt
Cuba
Mexico
El Salvador
Philippines
Guatemala
Panama
Vietnam
Costa Rica
Nigeria
India
Thailand
Ghana
Malaysia
Uganda
Congo
Indonesia
Kenya
Brazil
Peru
Chile
Lesotho
South Africa
Uruguay
Argentina
Figure 2 The geography of Canada s North South collaborations. Both the size of the red node and the width of the connecting line represent the number of
collaborations the developing country has with Canadian firms.
countries, we sent a brief survey to all the health international collaborations. A previous study Lexington, Kentucky, US; http://www.
biotech firms we could identify in Canada a from our group17 normalized the data on the analytictech.com/ucinet/).
total of 259 firms (see Supplementary Methods number of firm collaborations with developing Canadian firms have collaborations in all
for a detailed description of the study meth- countries with information on the sizes of the main regions of the world. Their strongest
odology). We asked firms whether they col- biotech sector in select developed countries. developing-country linkages are with China
laborated with developing countries and if so, We found that Canada s level of North South (22 of the 82 North South collaboration initia-
to list the collaborations and provide further collaboration did not reach the level of collab- tives reported in the survey) and with India (17
information regarding these collaboration ini- oration by biotech firms in the United States collaboration initiatives). Both China and India
tiatives, such as information on the reasons for but was on par with the collaboration levels have intensified their efforts to build domestic
the collaboration and the activities involved. We of firms from the European Union. The levels health biotech capacity in recent years18,19. This,
gave the firms a broad definition of  collabora- of North South collaboration we observe for combined with the large market potential avail-
tion , which included any work jointly under- Canada s firms are therefore likely to be similar able in these countries, is likely to make them
taken by firms and organizations contributing to the ones observed for most Northern coun- lucrative partners for Canadian firms. The top
to the production of knowledge, products and tries, except the United States. four developed countries that Canadian firms
services in health biotech. A total of 181 firms To learn more about the collaborators, we collaborate with are the United States (116
completed the survey (a response rate of 70%), collected information regarding the trade collaboration initiatives), UK (35 collabora-
the results of which are presented below. listing (public or private) of the firms we sur- tion initiatives), Germany (23 collaboration
veyed. Among the 181 respondent firms, 54 are initiatives) and Japan (18 collaboration initia-
How much collaboration is occurring? publicly listed and 127 are private. A substan- tives). Thus, our results indicate that Canadian
Our survey results show that a quarter (26%) tial number of both public and private firms firms collaborations with India and China are
of Canadian health biotech firms are involved (77% and 63%, respectively) are involved in approaching or surpassing their collaborations
in North South collaboration (Fig. 1). Most North North collaborations. When it comes to with the leading developed countries outside of
firms that collaborate with developing coun- North South collaborations, Canadian public the US in the health biotech field.
tries are also actively collaborating with devel- and private firms seem to be engaged in these The survey found Canadian firms also work
oped countries, which indicates that they seek to similar degrees (24% and 27%, respectively). with countries in Latin America (21 collabora-
alliances widely around the globe. In total, Thus, our data does not indicate a difference tion initiatives in total). Several countries in
Canadian firms reported 82 North South col- in the levels of international collaboration Latin America, such as Brazil and Cuba, are
laboration initiatives with developing coun- between public and private firms. active in health biotech7,20. The continent s
tries. Many of these firms have more than relative proximity to Canada and its wealth
one such collaboration initiative. In com- What developing countries are involved? of natural resources may be additional factors
parison, nearly half (46%) of Canadian firms To examine where Canadian health biotech that make firms based in Latin America attrac-
reported collaborations with partners in other firms collaborations with developing countries tive partners for Canadian firms.
developed countries only. About a quarter lie, we visualized the linkages (Fig. 2) using In contrast, the level of Canadian firms part-
of Canadian firms (28%) report having no the software Ucinet 6 (Analytic Technologies, nerships with countries in East Asia and the
NATURE BIOTECHNOLOGY VOLUME 27 NUMBER 9 SEPTEMBER 2009 807
© 2009 Nature America, Inc. All rights reserved.
FEATURE
Pacific (8 collaboration initiatives in total), the in collaborations that are limited to distribu- at joint distribution and R&D linkages as being
Middle East and North Africa (5 collaboration tion activities. at opposite ends of the spectrum of health bio-
initiatives in total) and sub-Saharan Africa (9 Clinical trials, manufacturing, laboratory tech collaborations. As we move away from a
collaboration initiatives in total) at this time is services and contract research are also reported focus on distribution to R&D and a stronger
relatively low. to be frequent collaboration activities. The col- emphasis on new-to-the world knowledge
Almost all (90%) of Canadian firms North laborations also involve provision and use of generation, we seem to lose connections to
South collaborations involved at least one type supplies (including raw materials, active phar- Africa and the Middle East but gain connec-
of formal arrangement among participants. maceutical ingredients and so forth) and pro- tions to Latin America, especially to Chile and
These ranged from distribution agreements to vision of training activities, but these occur at Mexico.
joint R&D agreements. Licensing agreements lower frequencies (Fig. 3). Manufacturing-related activities are fre-
were cited quite frequently, with over a fifth quently cited in Canadian firms collaborations
of the North South collaboration initiatives Leveraging competitive advantages. Our sur- with Chinese organizations. Nearly half (47%)
being based around them. Joint ventures were vey results indicate that Canadian health bio- of their manufacturing collaboration is with
rarer, being reported in only 12% of the col- tech firms have relatively strong distribution partners in China. This is perhaps not surpris-
laboration initiatives. The establishment of collaborations with China and India, the two ing as China is the second largest producer of
a subsidiary was reported in 13% of the col- most populous countries in the world (Fig. 4a). pharmaceutical ingredients and generic drugs
laboration initiatives. Subsidiaries are being set Africa is the world s second-most-populous in terms of value, after the US, and its firms are
up not only by Canadian firms in developing continent after Asia (http://www.worldatlas. moving into the biotech field22. Chinese firms
countries, but also by developing countries com/aatlas/infopage/content.htm), and so it is can leverage cost-effective manufacturing3 in
firms in Canada. interesting to note that collaborations involv- partnerships with foreign partners.
ing distribution and marketing with partners Canadian firms contract research activi-
Characteristics of collaborations in African countries are on par with such col- ties are particularly strong with Indian orga-
Canadian health biotech firms collaborations laborations in Latin American countries, even nizations versus with other countries. A total
often involve different types of activities; 40% though Latin America is closer geographically of 43% of Canadian firms collaboration in
of firms report involving two or more types to Canada. Although there is not a direct rela- contract research is with India. This fits well
of activities in a single North South collabo- tionship between population size and market with previous studies that show Indian con-
ration initiative. The collaborative activities demand, as many people in the more popu- tract research organizations to be leveraging
cover all stages of the health biotech value lous countries cannot afford health biotech strengths in the areas of synthetic chemistry
chain (Fig. 3). products, the emphasis that Canadian firms and bioinformatics to offer foreign partners
Collaboration initiatives involving joint dis- place on distribution and marketing ties with cost-effective investigations in India2,19.
tribution ranked highest in frequency (30% of African countries may reflect the latter conti- We note that  using supplies has a higher
the 82 North South collaboration initiatives). nent s expanding market potentials. relative representation in Canadian firms
However, collaborations involving joint R&D Canadian firms report having strong R&D collaborations with partners in Latin
followed closely (28% of the collaboration linkages with Chinese and Indian partners (Fig. American countries than in their collabo-
initiatives). R&D collaborations are important 4b). Because these two countries have been rations with partners in other developing
for firms because these not only help firms building their capacity for innovative research, countries: 75% of Canadian firms collabo-
generate new, proprietary products, but also this is not surprising18,19. Canadian firms also ration initiatives involving this activity are
enhance a firm s ability to identify, assimilate report significant joint R&D activities with with partners in Latin American countries.
and exploit new knowledge that can provide partners in Latin American countries, such The relatively high emphasis on  using sup-
the basis for further R&D21. These types of as Chile, and it is noteworthy that the firms plies in collaboration with Latin America
gains and the intensity of knowledge flows in have closer R&D ties to Latin America than may reflect initiatives to harness the conti-
R&D collaborations are not typically present marketing and distribution ties. We can look nent s terrestrial biodiversity.
The study results suggest that Canadian
firms may be leveraging the special strengths
30%
of their developing countries partners (tech-
25%
nological, niche areas or other resources) in
the collaborations. This reflects the active
20%
role developing countries have in the col-
laborations and suggests that developing
15%
countries are not simply on the receiving
10%
end of these alliances.
We were interested in exploring whether
5%
Canadian firms have technological strengths
0%
that are particularly attractive to developing
countries firms and fuel the collaboration.
We classified the technological foci of the
Canadian firms that reported being involved
in R&D collaborations with developing
countries according to information from
Activity
their websites. The firms have a wide range
Figure 3 Joint activities in Canada s North South collaborations. of technological foci, and discovery tools,
808 VOLUME 27 NUMBER 9 SEPTEMBER 2009 NATURE BIOTECHNOLOGY
© 2009 Nature America, Inc. All rights reserved.
initiatives
Percentage of collaboration
n
g
s
D
in
ials
R&
utio
vices
aining
Other
ib
ctur
r
T
a
f
u
y ser
n
Distr
a
Clinical tr
M
Using supplies
viding supplie
Contract research
Pro
Laborator
FEATURE
biologics and diagnostics firms are all signifi- in health biotech in general, rather than being We note that gaining access to developing
cantly involved in R&D collaboration with attracted to Canada s strengths in any par- countries markets was the reason most fre-
developing countries (see Supplementary ticular subsection of health biotech. quently cited by Canadian firms for collabo-
Methods online). Our interviews with experts rating with developing countries (66% of the
in health biotech in developing countries, Rationale for collaborations. The survey North South collaboration initiatives). This is
which are a part of an ongoing case study results suggest that Canadian firms collabora- consistent with the observation that the col-
on Canada s collaboration with developing tions with developing countries are driven by laborations commonly involve marketing and
countries, support the notion that developing a complex mix of reasons, and, in many cases, distribution activities.
countries wish to work with Canadian firms respondents reported several reasons for initi- The second most frequently cited reason by
because they perceive Canada as being strong ating a single collaboration initiative. Canadian health biotech firms was to provide
a
Canada
China
Iran
Lebanon
Mexico
Egypt
Cuba
El Salvador
India
Nigeria
Ghana
Malaysia
Uganda
Indonesia
Congo
Argentina
b
Canada
China
Mexico
Cuba
India
Costa Rica Vietnam
Brazil
Chile
Lesotho
Argentina
Figure 4 The geography of select collaborative activities. (a) Distribution and marketing activities. (b) Research & development activities.
NATURE BIOTECHNOLOGY VOLUME 27 NUMBER 9 SEPTEMBER 2009 809
© 2009 Nature America, Inc. All rights reserved.
FEATURE
Collaborations are firm-initiated. We asked
Box 1 Role reversal? South-to-North resource flows
Canadian health biotech firms to indicate
who initiated their collaborations with devel-
A key to successful biotech collaboration is reciprocity and equal contribution among
oping countries. The results indicate that the
partners. Traditionally, financial resources and science-intensive knowledge have come
partnerships were almost always initiated by
from the richer North, so it is a sign of changing times that in some cases these resources
the partnering firms themselves. Over half of
are now originating from the South, flowing into Canadian firms and contributing to their
the collaborations (52% of the North South
successes.
collaboration initiatives) were initiated by the
The Biosyntech-Piramal Healthcare partnership is an example of collaboration in
Canadian firms only, and over a quarter (29%
which financial resources from a developing country have enabled a Canadian health
of the collaborations) were jointly initiated by
biotech firm to continue with its innovative R&D activities. The Canadian firm Biosyntech
Canadian and developing-country partners.
(Montreal; http://www.biosyntech.com/en/) is involved in the development of thermogels
About 12% of the North South collaboration
for tissue repair and drug delivery. After encountering difficulty in raising financing from
initiatives were initiated by partners from devel-
North American venture capitalists, company management approached one of India s
oping countries only. The survey responses did
largest pharmaceutical firms, Piramal Healthcare (Mumbai; http://www.npilpharma.
not indicate expatriates or diaspora communi-
com/about-us/piramal-group.html), for funding. Piramal Healthcare, in exchange for
ties as playing a role in helping to set up the
distribution and research collaboration agreements, made a CDN$6 million (US $5.4
partnerships: only 1 out of 82 collaborations
million) equity investment in the Canadian firm in 2006. As a result of this investment
credited expatriates as helping to initiate the
by the Indian firm, Biosyntech was able to stay afloat and raise subsequent funding from
collaboration. No collaborations at all were
North American investors. The Canadian firm credits its Indian partner for keeping it alive,
initiated by international organizations.
and Biosyntech s has now been able to push its proprietary therapy for localized cartilage
What is notable is that the collaborations
lesion repair into clinical testing.
seem to have arisen without much assistance
An example of another type of resource flow from South to North is the joint venture
from governmental agencies in Canada or in
between the Canadian firm YM BioSciences (Mississauga, Ontario, Canada; http://www.
developing countries only 7 out of 82 col-
ymbiosciences.com/) and the Cuban research institution Centre for Molecular Immunology
laboration initiatives received government
(Havana). In this case, it is Southern technology and know-how that is being transferred
help in establishing their collaboration.
to the Northern partner, rather than funding. The Canadian firm does not conduct its
Previous case-study research has suggested
own basic research. Its first in-licensed technology was a cancer therapy technology from
that a major challenge faced by Canadian
the Centre for Molecular Immunology in 1995. Cuban scientists did the original basic
biotech firms in penetrating emerging mar-
research and are manufacturing the anticancer, epidermal growth factor receptor targeting
kets is a lack of support in establishing ini-
humanized monoclonal antibody nimotuzumab. Today, YM BioSciences is conducting
tial linkages with potential partners23. With
phase 1 to 3 trials of nimotuzumab in Europe, North America, Asia and Latin America,
more government assistance, we might there-
itself and through several companies that have licensed development rights from YM
fore expect to observe an even higher level of
BioSciences. The trials are being conducted for various cancer types, including non-
small-cell lung, glioma, esophageal, colorectal, pancreatic, prostate, cervical and breast. Canadian firm collaboration with companies
Nimotuzumab is approved in several countries for the treatment of head and neck cancers in developing countries. In this regard, the
and glioma. Licensing technology from its Southern partner has enabled YM BioSciences establishment of bridging organizations,
to develop an advanced portfolio in oncology; the firm has been named among Canada s such as International Science and Technology
top ten life sciences companies two years in a row. Partnerships Canada (ISTPCanada; Ottawa,
Ontario, Canada), which works at the junc-
tion of domestic and international gov-
knowledge to their developing countries part- In the survey, Canadian firms were given ernment desks to promote the country s
ners (37% of the collaboration initiatives). The space to include any additional comments. In 13 science and technology collaboration with
firms report accessing knowledge from their of the collaborations, the comments indicated the emerging economies of China, India and
developing countries partners to be the third that Canadian firms are choosing to work with Brazil (http://www.istpcanada.ca/home/
most frequent reason for their collaborations firms in developing countries to minimize their index.html), is a positive step, although more
(24% of the collaboration initiatives). These development costs and gain access to cheaper needs to be done.
findings seem to indicate bidirectional knowl- labor and production. The Canadian firms also
edge flows between Canadian firms and their cited altruistic reasons (for example,  helping Collaborations fuel the product pipeline.
partners in developing countries. developing countries and  to bring wealth we We asked Canadian firms to specify the
Canadian firms also cited both providing have here over there ) for their collaborations, types of output from each of their collabora-
financing to developing country partners and reflecting a moral aspect to partnerships with tions. The data indicate that these partner-
accessing funding from partnerships with firms in developing nations. Still, based on ships are productive (Fig. 5) as almost all the
developing country firms (6% and 7% of the our survey, we cannot conclude that develop- collaborations (90%) report some form of
collaboration initiatives respectively) as rea- ing countries typically receive direct financial shared output. More than a quarter (29%)
sons for their North South collaborations. benefits from their health biotech collabora- of the collaborations have joint products in
This reflects, once again, that resources are not tions with Canada. In fact, the opposite seems the pipeline, and 15% of the collaborations
necessarily streaming from the North to the to be true as there is significant evidence that already have joint products in the market.
South in Canada s collaboration with develop- Canada s North South health biotech collab- This reflects a strong product focus. Joint
ing countries. Indeed, there are recent exam- orations involve bidirectional knowledge and patenting is, however, rare, with only 4% of
ples of firms in developing countries providing other flow of resources that leverage strengths the collaborations reporting joint patents as
financing to firms in Canada (see Box 1). offered by both participating countries. an output of collaborations.
810 VOLUME 27 NUMBER 9 SEPTEMBER 2009 NATURE BIOTECHNOLOGY
© 2009 Nature America, Inc. All rights reserved.
FEATURE
tion potentials. Health biotech is increasingly
30%
global in scope, and without global partner-
25%
ships the firms will not be able to remain
competitive. We do not, however, have survey
20%
data on further benefits of the collaboration.
15%
As the collaborations seem to be young, they
are unlikely to have already led to significant
10%
increases in revenues.
To see whether there are any differences
5%
between firms that are involved in North
0%
South collaborations versus those that are not,
Joint None
Joint product Joint product Joint Other
we selected the public firms in our data set and
patent
in pipeline in market publication
compared financial information of those pub-
Output
licly listed Canadian firms that reported hav-
ing North South collaboration to those that
Figure 5 Joint output in Canada s North South collaborations.
did not. Both the average total assets and R&D
expenditures were similar between the firms
A few firms indicated that the collaboration Ongoing case study research indicates that that have been involved in North South col-
with developing countries has led to  other most Canadian health biotech firms are taking laboration and those that have not (Table 1).
forms of joint outcomes (9%). They specified their first steps in North South partnerships. We do note, however, that average total rev-
these to include joint R&D projects, entering Their limited joint patenting further strength- enues of firms that have North South collabo-
into distribution agreements and beginning ens the notion that these types of collabora- rations are nearly four times higher than firms
clinical phase studies, among other things. tions are young, and it is likely that we will see that do not have such partnerships. Even after
Thus, North South collaboration can be more joint patenting as the partners become removing the top revenue earner from the
important to firms achieving milestones of the more familiar with one another and collabo- group that has North South collaborations,
drug development process, as well as distribu- rations progress. There are great expectations the adjusted average total revenue is double
tion and marketing agreements. We provide that the collaborations will open up new that of the other group. Thus, our data sug-
examples of these in Boxes 1 4. markets and strengthen the firms innova- gests that Canadian public health biotech
Box 2 Collaborating with the Dragon of the East
China and Canada affirmed their commitment to work together president and CEO of CNBG,  The integration of ProMetic s
by signing a bilateral science and technology agreement in technologies into WIBP s existing manufacturing infrastructure
January 2007. Collaborating across the Pacific Ocean is a natural will significantly increase WIBP s manufacturing capacity and
development for the two Asia-Pacific Economic Cooperation (APEC) enable WIBP to better meet the ever-growing demand in China.
states and is undoubtedly facilitated by the fact that Canada has Initial products targeted include thrombin, fibrinogen, intravenous
had a continuous immigration stream from China and, as a result, immunoglobin, anti-hepatitis B immunoglobin, anti-rabies
a sizeable Mandarin- and Cantonese-speaking population. In health immunoglobin and anti-tetanus immunoglobin. The strategic
biotech research, their collaboration is fueled by their populations alliance is therefore aimed at strengthening WIBP s manufacturing
shared health problems. Both have aging populations and thus a capacity through innovative technology and broadening ProMetic s
high burden of non-communicable disease (http://www.who.int/ reach into a rapidly expanding market (http://www.prometic.com/
whosis/whostat/EN_WHS08_Full.pdf). In addition, communicable en/prometic/index.php).
diseases spread easily between the two countries. This was Another Canadian firm actively working with Chinese partners
illustrated by the severe acute respiratory syndrome (SARS) to penetrate the Chinese drug market is Welichem Biotech
epidemic in 2003, which spread to Canada a matter of weeks after (Vancouver, British Columbia, Canada; http://www.welichem.
its outbreak in China; indeed, Canada had the third-highest number com/index.php). Welichem s discovery platform enables the
of reported cases in the world24. It is, therefore, not altogether identification of novel anti-inflammatory or antiproliferative
surprising that our survey on Canadian firms health biotech firms compounds from bacteria symbiotic with insects and nematodes.
showed China as Canada s foremost developing-country partner in The company s lead drug WBI-1001, a non-steroidal anti-
the field. The Canadian firms are likely to be attracted to the large inflammatory cytokine modulating compound is being developed as
market in China, which is home to over a billion people, as well as a cream for the treatment of psoriasis, eczema and inflammatory
to China s R&D and manufacturing strengths. Canada is likely to be bowel disease. In 2005, Welichem entered into a strategic
an attractive partner to China because it has a strong track record partnership with Weihe Pharmaceutical (Yuxi, China) and Celestial
in biotech and has developed promising technologies in the field. Pharmaceuticals (Shenzhen, China) for the cost-effective,
In 2008, ProMetic Life Sciences (Montreal), a Canadian development and marketing of novel drugs discovered through the
biopharmaceutical company, entered into collaboration with the Canadian company s platform. The Chinese partners planned a
Wuhan Institute of Biological Products (WIBP; Wuhan, China), a US$ 50 million investment over three years into Welichem and the
subsidiary of China National Biotec Group (CNBG), for ProMetic s firms are establishing a R&D laboratory in China. Joint R&D at the
affinity-separation technology for extracting and purifying proteins preclinical level and transfer of senior management has thus far
from human plasma at high yields. According to Lifang Wang, been conducted to deepen the synergies between the partners.
NATURE BIOTECHNOLOGY VOLUME 27 NUMBER 9 SEPTEMBER 2009 811
initiatives
Percentage of collaboration
© 2009 Nature America, Inc. All rights reserved.
FEATURE
successes of initiatives promoting Canadian
Box 3 The global face of clinical trials
firms collaboration with developing countries
in health biotech.
Taking a healthcare product from concept to proof-of-concept and finally regulatory
Although we have focused our research on
approval is a long, arduous process. Firms, therefore, commonly choose to carry out
Canadian firms collaborations, the findings
testing of product safety and efficacy in partnerships. Our survey of health biotech firms
from the study are relevant to other devel-
in Canada shows that these partnerships can cross the world and be between Canada
oped countries because it gives an indication
and developing countries firms. It is important for firms to work with experienced local
of the potential of North South collaboration
partners to assess effectiveness and safety of a trial product in different populations
in general to strengthen innovation in health
thereby gaining information for optimal design of the product and to navigate the local
biotech. The findings may be useful to firms
regulatory system.
interested in global expansion, to research
In 2006, the Juravinski Cancer Centre s (Hamilton, Ontario, Canada) clinical trial
groups considering entrepreneurial alliances
group was chosen as a trial site by Piramal Healthcare (Mumbai, India) to pursue its
and to government policymakers who are in a
first-in-human trials of its novel anticancer molecule. Piramal Healthcare is interested
position to influence innovation, development
in entering its proprietary products in global markets, including in North America, and
or foreign affairs policies in both developed
as such decided to conduct trials at North American sites. It also is taking its first
and developing countries.
steps in innovative discovery and wanted to test its novel product in a country with a
There are several conclusions from our study
regulatory system that has a strong track record in testing innovative drug candidates.
of entrepreneurial collaborations between
The trial was conducted at the Juravinski Cancer Centre under International Committee
Canadian health biotech firms and develop-
for Harmonization/Good Clinical Practice and Health Canada regulatory guidelines. Hal
ing countries. First, these types of partnerships
Hirte, Chief of Oncology at the Centre, notes that due to the  reciprocities between the
are widespread. Canada has frequent ties to
Canadian regulatory system and that of the US FDA, it is easier for clinical data collected
developing countries, with over a quarter of its
in Canada to be accepted in the US in comparison to data collected elsewhere in the
health biotech firms collaborating with devel-
world. It is also cheaper for Piramal Healthcare to carry out initial trials in Canada than in
oping countries. Firms that engage in North
the United States because Canada s universal healthcare system covers part of healthcare
South collaboration seem to be involved in a
costs. The Juravinski Cancer Centre is now in discussion with Piramal Healthcare to
number of collaboration initiatives with their
continue with phase 2 trials of the anticancer drug.
partners. The survey results show Canadian
Elsewhere, SpectraDigital (Guelph, Ontario, Canada; http://www.spectradigital.net/
firms report having a similar number of col-
index.php), a small Canadian firm interested in tapping into the Brazilian market with
laboration with companies in the develop-
its diagnostic technology, has partnered with FK Biotec (Porto Alegre, Brazil; http://
ing economies of China and India as they do
www.fkbiotec.com.br), a Brazilian immunodiagnostics firm. SpectraDigital s diagnostic
with companies in developed countries, such
technology platform uses light-scattering measurements and image processing techniques
as Germany, Japan and France. Developing
to allow inexpensive diagnosis of HIV, Plasmodium, multi-drug-resistant tuberculosis
countries that have invested in their domestic
bacilli and various types of tumors all diseases of local relevance in Brazil. As a small
health biotech sectors seem best poised to par-
firm, SpectraDigital s business model depends on partnerships to implement its platform
in global markets. It is relying on the infrastructure, contacts, distribution channels, ticipate in global health biotech networks, and
financial investment and regulatory know-how of FK Biotec to demonstrate proof of their respective strengths attract collaboration
concept and take the final product to market. Satish Deshpande of SpectraDigital notes with Northern partners.
that his firm is able to enter the Brazilian market owing to its linkages with an experienced Second, collaborations have a relatively
local partner while larger firms have stayed out of this market because of difficulties strong focus on R&D activities. Responses
faced in understanding and negotiating the regulatory channels there. From FK Biotec s from Canadian health biotech firms show that
perspective, however, CEO Fernando Kreutz says,  It s not only a simple clinical trial. It
R&D activities are nearly as common as distri-
is more than that because we are actually involved in further development of the product,
bution and other end-stage commercialization
finding new applications, improving the range of product applicability.
activities in their North South collaboration
initiatives, reflecting a significant degree of
firms that have North South collaborations Conclusions knowledge-intensive collaboration between
generate higher revenues than those that do Our survey casts light on the current extent Canadian firms and their developing coun-
not. Still, as our data are limited, we cannot and characteristics of the collaboration of try partners. This focus on joint R&D has the
attribute the companies increased revenues Canadian health biotech firms with partners potential to increase learning and innovation
to their North South collaboration, as an in developing countries. The results also pro- in both the South and the North.
alternative explanation may be that the firms vide a baseline to which future studies on this Third, our study results suggest that
that have the highest revenues are the most topic can compare, thereby affording the pos- Canadian firms collaborations with devel-
outward looking. sibility to evaluate changes over time and the oping countries are based on leveraging both
partners competitive strengths. Developing
countries may be relying on existing strengths
Table 1 Canadian health biotech public firms: 2007 financial data
in specific areas technological, service-based
Firms with North South Firms without North South or resource-based to work with Canadian
Financial benchmark collaborations (US$ millions) collaborations (US$ millions)
firms. Bidirectional transfer of knowledge is
Average total assets 33.6 40.4
an important reason for forming these North
Average R&D expenditure 11.9 15.5 South partnerships. We also note bidirectional
Average total revenues 16.3 4.4 flow of capital between Canadian and develop-
ing countries partners. The collaborations are
812 VOLUME 27 NUMBER 9 SEPTEMBER 2009 NATURE BIOTECHNOLOGY
© 2009 Nature America, Inc. All rights reserved.
FEATURE
not unidirectional in terms of contributions: the various phases of clinical trials on inno- ized world. Furthermore, our data indicate that
developing countries firms and organizations vative products and a system geared to regu- thus far, the Canadian government has played
are active participants in their joint initiatives late such innovative efforts. Furthermore, as only a limited role in promoting and helping to
with Canadian firms. Canada is geographically close to the United establish collaborations of health biotech firms
Fourth, the majority of Canada s entrepre- States and has some cultural similarities, with with developing countries. Despite this limited
neurial health biotech partnerships have been strong parallels in regulatory oversight, collab- role, around a quarter of Canadian firms col-
initiated by the participating firms without oration with Canadian firms provides develop- laborate with developing countries. Many firms
external intervention either from Canada or ing countries firms with a stepping stone to the are, however, likely to be timid in approaching
the partnering country. International orga- lucrative US market. far away countries for partnership building.
nizations and diaspora communities have Governments in developed countries should The Canadian and other developed country
not played a significant role in encouraging realize that the global innovation landscape is governments are in a position to facilitate the
North South collaboration. Canadian firms changing and can increasingly involve con- initiation of partnerships and can raise aware-
have received some help from government tributions from developing countries. So far, ness of the potential benefits to North South
agencies, such as the ministries of trade or for- innovation policies of developed countries have collaborations.
eign affairs, in both the North and the South, primarily focused on internal  national visions, Governments in developing countries
but this has been limited in nature. There is or have prioritized international partnerships likewise need to integrate their innovation
clearly a great deal more bridging that could be with other developed countries to drive innova- agenda and their foreign-affairs policies. They
done to ensure that North South collaboration tive behavior. They have paid limited attention also need to diversify their linkages and focus
is able to thrive and meet its potential. to the potential of collaborating with develop- on countries that are strong in health biotech.
Finally, the collaborations are strongly ing countries to stimulate domestic innovative Our previous research has shown that there
focused on products. Our data show that capabilities. What our results suggest is that this still is a tendency for developing countries
North South partnerships are productive and needs to change. To maintain global competi- to collaborate in health biotech with coun-
almost all of them have led to some shared tiveness in health biotech, developed countries tries that they have had historical ties to in
output. The most common output is a joint must broaden the scope of their innovation the form of former colonial relations18. In
product in the pipeline, although some col- agendas to include partnerships with develop- technology-intensive fields, such as health
laborations have a joint product already on ing countries. Innovation policies and foreign biotech, there is a need for developing coun-
the market. Considering the focus on prod- affairs policies need to be integrated to pro- tries to diversify and see that the world can
uct development, collaborations could, in the mote collaboration and innovation in a global- be their playing field.
future, be a strong force in innovation. There is,
however, reason to believe that the partnerships
Box 4 International commercialization of needle-free insulin
are nascent, and, considering the high uncer-
tainty of drug development, it is premature to In 2001, Frost & Sullivan awarded its Product Differentiation Innovation Award to the
evaluate their benefits in terms of marketed Canadian firm Generex Biotech (Toronto; http://www.generex.com/) for a proprietary
new-to-the world innovation, revenues and formula (containing cyclodextrin, a mucobioadhesive polymer carboxmethycellulose, the
surfactant sodium lauryl sulfate, viscosity-control polymer hydroxypropyl methycellulose
job creations.
and urea peroxide) that facilitates the delivery of large-molecule drugs to the buccal
Overall, our survey indicates that Canadian
firms have a strong interest in building part- mucosa. Generex has developed Oral-Lyn, a formulation of insulin mixed with the
delivery formulation that patients can self administer via a device (RapidMist) capable of
nerships in the health biotech sector with firms
aerosolizing the drug by means of a chemical propellant. Oral-Lyn thus offers needle-free
in developing countries. On the basis of this
delivery of the hormone to patients with type I and type II diabetes. Early on, Generex
research, several recommendations can be
realized that in addition to conducting testing and clinical trials in North America,
made to strengthen this process with inputs
turning to international commercial partners particularly in developing countries, where
from various stakeholders. Canadian firms
the diabetes epidemic is expected to swell, according to the World Health Organization
that are looking into new market opportunities
(Geneva)25 would be a critical component of its strategy to increase support,
should increasingly consider firms in develop-
endorsement and ultimately acceptance of its product worldwide and at home.
ing countries. By partnering with these firms,
Generex took its first step toward international registration and commercialization
they can gain access to the latter s local market-
of Oral-Lyn in Ecuador. After gaining clearance from the Ecuadorian Ministry of Public
ing intelligence and distribution networks. Our
Health, the company in 1998 began clinical testing of the product s safety and efficacy
research demonstrates that the partnerships do
in collaboration with local investigators at the Instituto de Endocrinologia Metabolismo
not have to focus solely on marketing activities
y Reproducción (IEMYR; Quito, Ecuador). Generex also entered into an alliance with
but can also strengthen innovation pipelines.
PharmaBrand, a local Ecuadorian pharmaceutical firm, and together the partners
Developing countries firms are collaborating
successfully gained regulatory approval to commercialize Oral-Lyn in Ecuador in 2005.
with Canadian biotech firms to gain access to
The alliance gave a boost to PharmaBrand and strengthened its position in Latin America.
their technological expertise and experience in
Generex also benefitted from its connections in Ecuador. Presentation of Oral-Lyn s
product development. Canada has strengths in
clinical trial data by IEMYR researchers at many international conferences significantly
biotech, reflected in its high publication rate
increased awareness of the product by a global audience. Oral-Lyn s successful registration
in international peer-reviewed journals and
in Ecuador renewed investor confidence in Generex. It also served as a springboard to
large number of firms active in the field12,13.
Generex forming further Oral-Lyn licensing and distribution agreements with partners
For developing countries firms taking their
across the globe, including SciGen (Hefei, China), Adcock Ingram (Johannesburg, South
first steps in new-to-the world innovation, it
Africa), Dongsung Pharmaceutical (Seoul, South Korea), Shreya (Mumbai, India) and
is likely to be beneficial to form partnerships
Banaja (Jeddah, Saudi Arabia).
with firms that already have experience with
NATURE BIOTECHNOLOGY VOLUME 27 NUMBER 9 SEPTEMBER 2009 813
© 2009 Nature America, Inc. All rights reserved.
FEATURE
Biotech investors must also embrace the
McLaughlin Centre for Molecular Medicine. P.A.S. is tries. Int. J. Biotechnol. 8, 23 42 (2006).
12. van Beuzekom, B. & Arundel, A. OECD biotechnology
supported by a Canadian Institutes of Health Research
fact that innovation in health biotech increas-
statistics. (OECD, Paris, 2006).
Distinguished Investigator award. H.T. is supported by
ingly involves global players and components.
13. Munn-Venn, T. & Mitchell, P. Biotechnology in Canada:
a New Investigator Award from the Canadian Institutes
To recoup developmental costs, firms need a technology platform for growth (Conference Board of
of Health Research.
Canada, 2005).
to market their products widely around the
14. Traore, N. Canadian biotech firms: extent of networking
COMPETING INTERESTS STATEMENT
world. For many small firms, investors are
activities and commercialization success. Innov. Anal.
The authors declare competing financial
Bull. 3, 13 14 (2001).
the main advisors for business strategies, and
interests: details accompany the full-text HTML
15. Biotecanada. Canadian and US biotechnology com-
an increasing appreciation of the benefits
version of the paper at http://www.nature.com/ panies forging new partnerships at the 2007 Bio
of North South innovation and its role in
International Convention (May 2007). naturebiotechnology/.
lifesciencesbc.ca/News/>
business models is likely to be important for
1. Thorsteinsdóttir, H., Quach, U., Daar, A.S. & Singer, 16. Dufour, P. Taking the (right?) fork in the road: Canada s
the future success of biotech enterprises. To
P.A. Conclusions: promoting biotechnology innovation two-track approach to domestic and international sci-
maintain global competitiveness in health bio- in developing countries. Nat. Biotechnol. 22 (suppl.), ence and technology. Sci. Public Policy 29, 419 430
DC48 DC52 (2004). (2002).
tech, developed countries must broaden the
2. Frew, S.E. et al. India s health biotech sector at a cross- 17. Melon, C.C. et al. A survey of South North health
scope of their innovation agendas to include
roads. Nat. Biotechnol. 25, 403 417 (2007). biotech collaboration. Nat. Biotechnol. 27, 229 232
3. Frew, S.E. et al. Chinese health biotech and the three- (2009).
partnerships with developing countries. To
billion patient market. Nat. Biotechnol. 26, 37 53 18. Zhenzhen, L. et al. Health biotechnology in China
do so, different stakeholders must align their
(2008). reawakening of a giant. Nat. Biotechnol. 22 (suppl.),
strategies so they can work together toward
4. Rezaie, R. et al. Brazilian health biotech fostering DC13 DC18 (2004).
crosstalk between public and private sectors. Nat. 19. Kumar, N.K. et al. Indian biotechnology rapidly evolv-
the common goal of promoting cost-effective
Biotechnol. 26, 627 644 (2008). ing and industry led. Nat. Biotechnol. 22 (suppl.),
health innovation of mutual benefit to the
5. Rao, S. The rise of the BRICS: what does it mean for DC31 DC36 (2004).
North and the South. Canada? (Conference Board of Canada, 2008).
20. Ferrer, M., Thorsteinsdóttir, H., Quach, U., Singer, P.A.
6. Wagner, C.S. The new invisible college: science for
& Daar, A.S. The scientific muscle of Brazil s health
development (Brookings Institution, Washington, DC,
biotechnology. Nat. Biotechnol. 22 (suppl.), DC8 DC12
ACKNOWLEDGMENTS
2008).
(2004).
The authors thank all the firms that responded to the
7. Thorsteinsdóttir, H., Saenz, T.W., Quach, U., Daar, A.S.
21. Coe, D.T., Helpman, E. & Hoffmaister, A.W. North-south
survey and generously shared their expertise and time.
& Singer, P.A. Cuba  innovation through synergy. Nat.
R&D spillovers. Econ. J. 107, 134 149 (1997).
We also thank J. Clark for comments on the manuscript
Biotechnol. 22 (suppl.), DC19 DC24 (2004).
22. Yusuf, S., Nabeshima, K. & Perkins, D.H. China and
and J. Chadder and M. Li for help with data collection.
8. Chataway, J., Tait, J. & Wield, D. Frameworks for phar- India reshape global industrial geography. in Dancing
This project was funded by the Canadian Institutes of
maceutical innovation in developing countries  the
with Giants: China, India and the Global Economy.
Health Research and supported by the McLaughlin- case of Indian pharma. Technol. Anal. Strateg. 19,
Pages 35 66. Editors: Winters, L.A. & Yusef, S. The
Rotman Centre for Global Health. The McLaughlin- 697 708 (2007). World Bank: Washington, D.C. (2007).
9. Mytelka, L.K. Pathways and policies to (bio)pharma- 23. Taylor, A.D. et al. North South partnerships a study
Rotman Centre for Global Health, Program on Ethics
ceutical innovation systems in developing countries. of Canadian firms. Nat. Biotechnol. 25, 978 979
and Commercialization is primarily supported by
Ind. Innov. 13, 415 435 (2006). (2007).
Genome Canada through the Ontario Genomics
10. Bower, J.D. & Sulej, J.C. The Indian challenge: the 24. Zhong, N.S. & Wong, G.W.K. Epidemiology of severe
Institute, the Ontario Research Fund, and the Bill and
evolution of a successful new global strategy in the acute respiratory syndrome (SARS): adults and chil-
Melinda Gates Foundation. Other matching partners
pharmaceutical industry. Technol. Anal. Strateg. 19, dren. Paediatr. Respir. Rev. 5, 270 272 (2004).
are listed at http://www.mrcglobal.org/. M.R. is
611 624 (2007). 25. Wild, S., Roglic, G., Green, A., Sicree, R. & King, H.
supported by a Canadian Institutes of Health Research
11. Thorsteinsdottir, H., Daar, A.S. & Singer, P.A. Health Estimates for the year 2000 and projections for 2030.
Training Award. A.S.D. and P.A.S. are supported by the biotechnology publishing takes-off in developing coun- Diabetes Care 27, 1047 1053 (2004).
814 VOLUME 27 NUMBER 9 SEPTEMBER 2009 NATURE BIOTECHNOLOGY
© 2009 Nature America, Inc. All rights reserved.