Bioe News

Published online: 14 July 2005, doi:10.1038/bioent872

Canada's alternative biotech scene is an island apart

*George S. Mack is a freelancer in Columbia, South Carolina

Prince Edward Island is betting that nutraceuticals and stress reduction will give it an edge on the competition.

It was hard to miss the blazing red-and-white maple leaf banners festooned around Canada's giant pavilion at the Biotechnology Industry Organization's annual conference a few weeks ago in Philadelphia. All too often, however, despite having one of the largest biotech industries in the world, and easily one of the friendliest business communities on the planet, Canada is often overlooked. None of this ever bothered the biotech brain trust of Prince Edward Island, the tiniest of Canada's ten provinces. Indeed, nobody on this beautiful little island seemed to mind that outsiders associated it more with blueberries and golf courses than science and biotech.

What Prince Edward Island's biotech leaders have come to realize, of late, is that they have something that's not all that easy to come by: expertise in the growing global interest in ocean-, berry- and crop-based nutraceuticals and a can-do culture that's conducive to bright ideas, families and good science.

The University of Prince Edward Island Blueberry Research Team is probing the antioxidant properties in wild blueberries. University of Prince Edward Island/Louise Vessey

Health Canada, the nation's health agency, defines nutraceuticals as a "product isolated or purified from foods, and generally sold in medicinal forms not usually associated with food and demonstrated to have a physiological benefit or provide protection against chronic disease."

Biotech boosters on Prince Edward Island started pitching the 'PEI' as an alternative biotech cluster, ready-made for biotech research and development, last March by establishing the Prince Edward Island BioAlliance to woo biotech companies with government-backed incentives. Later this year, the Institute for Nutrasciences and Health (INH) will open for business. According to INH lead scientist Michael Mayne, this facility will eventually house a team of 60 to 80 researchers and a biotech incubator.

Prince Edward Island isn't for everybody. There are only two cities—Charlottetown and Summerside—and the entire population of the island is only about 137,000. Although there is an airport, the only direct flights to be found are those to relatively nearby places like Toronto and Detroit. There are no four- or five-star hotels or restaurants. Canada's investment banks, angels and venture capital groups stick to the mainland. Entrepreneurs who feed off the energy, access and networking opportunities found in biotech clusters like Cambridge-Oxford or Boston-Cambridge, would probably just as soon relocate to the South Pole as to Prince Edward Island.

But, for those who find themselves in need of a lifestyle change and a serious quality of life upgrade, a low-key place like Prince Edward Island that already has some history with biotechnology, not least of it in the areas of food sciences and marine biology, does have a certain appeal.

The newest pitch to biotech entrepreneurs? Stress reduction. Tourism PEI/John Sylvester

Prince Edward is already home to 15 bioscience companies, which employ a total of 400 workers in the centrally located Victorian-inspired Charlottetown area. Those 15 companies produce $60 million in annual revenues. Most of PEI's biotechs are smallish. The largest of the batch is the 35-year-old Charlottetown-based BioVectra DCL, which manufactures specialty chemicals and proteins.

BioVectra founder Regis Duffy is chairman of the BioAlliance board of directors, and he says "there are real opportunities that could be developed here with the resources we have."

As in most biotech hubs, grants and low interest or zero interest loans are available to startups, in addition to federal and provincial tax incentives. Each dollar (US) spent on R&D in Canada yields 18.7 cents in tax breaks, versus 6.6 cents in the US, according to the Organization for Economic Co-operation and Development.

		"Entrepreneurs who feed off the energy, access, and networking opportunities found in biotech clusters like Cambridge-Oxford or Boston-Cambridge, would probably just as soon relocate to the South Pole as to Prince Edward Island."

Then again, tax subsidies are unimportant until a company starts producing revenues. The grants and loans will likely be on the small side, too—less than $10 million. Make no mistake, Prince Edward Island is not Singapore, Dubai or Finland; it does not have big government treasure chests to scoot in front of biotechs as an incentive to relocate.

This deficiency complicates global recruiting efforts, but clearly does not dash all hopes. There is evidence, after all, that some biotechs are looking for more than just a big bucket of easy money. Some are looking for a place to build a biotech that won't fray their nerves.

Charlottetown-based University of Prince Edward Island president Wade MacLauchlan, the leading advocate for BioAlliance, notes that "we have someone we're currently recruiting from Florida who's coming because this is where he and his wife want to bring up their kids."

CEO Alan Andreason relocated his nutrition products business Fortius Canada from Calgary, Alberta. Before he was recruited he didn't know where Prince Edward Island was located. "Fortius is growing now at a very rapid pace," he says. "Stress can be one of the largest burdens [a startup management team] can have. The environment on PEI offsets the stress. For example, there are no traffic jams."

Tony Lucas was recruited by Regis Duffy from Boston five years ago as the new BioVectra CEO. "One of the attractions, really, was the quality of life here," he says. "It's a pleasant old-country kind of environment up here. It's agrarian, fisheries, tourism. It's beautiful—like being in Ireland or Scotland. That was very attractive to us coming from Boston."

		"Some are looking for a place to build a biotech that won't fray their nerves."

BioAlliance executive director Rory Francis recognizes that luring startups is just the first step. PEI might have 200 PhDs with biotech bona fides, but it does not have a single venture capital group "on island." Francis admits that venture capitalists and their vast wealth of capital and management expertise are a vital part of any biotech hub, mainstream or alternative.

Then again, some biotech entrepreneurs prefer to simply form virtual companies to invent products for others to develop or simply develop products to the point where their preliminary data and proof of concept are sufficient to be sold off, freeing them quickly to move on to the next bright idea. At the very least, for this brand of entrepreneur, PEI already has everything it needs.