Why Canada needs to build its biomanufacturing capacity

The Building Biotech series explores how this country can become a global player in life sciences by streamlining the entrepreneurial path to commercialization.

Canada has long been a source of world-class health and life sciences innovation. All too often, however, the economic benefits of these breakthroughs have been realized elsewhere, leaving Canada to miss out on the jobs, investment and long-term economic returns that come with a strong domestic biomanufacturing sector.

In recent years, governments invested heavily in biomanufacturing infrastructure, spurred in part by the COVID-19 pandemic and the realization that Canada lacked the domestic capacity to produce critical vaccines and therapeutics at scale.

But building facilities is only one piece of the puzzle. The challenge now is to ensure those investments translate into a thriving ecosystem.

“We need to do everything we can to encourage and incentivize building out our biomanufacturing capacity in order to keep companies in Canada,” says Maura Campbell, president and CEO of the OBIO. Working closely with health science companies navigating the path from innovation to market, she has seen firsthand the challenges they face.

Here, she shares what’s needed to strengthen Canada’s biomanufacturing ecosystem and the opportunities that could help Canada capture more of the value created by its life sciences sector.

 
Why should Canada invest in building its biomanufacturing capacity?

If you can capture the company’s manufacturing footprint in Canada, you’ve got the benefit of that manufacturing for the foreseeable future. To move that manufacturing footprint is not an easy task. We’ve got to start making some bets on companies in Canada and capturing them from a manufacturing perspective. While it will cost in the short term, it will have a lot of downstream long-term benefits.

 
What progress has Canada made in rebuilding its biomanufacturing capacity since the pandemic?

Through the federal life science and biomanufacturing strategy, we’ve made some big bets on infrastructure, mostly academic environments like the CMPC in Alberta. We’ve put a lot of funding into building out that biomanufacturing infrastructure. But a lot of these manufacturing facilities are really underutilized right now. They were funded to address what happened during COVID, as we were caught with no strong domestic biomanufacturing capability — we were not able to manufacture our own vaccines for our own domestic population.

A lot of this was a knee-jerk reaction to that predicament that we did not want to find ourselves in again. But, it’s not sufficient to just build facilities.

 
Now that we’ve taken the first step and made significant investments in biomanufacturing infrastructure, how can we ensure those investments deliver the intended impact?

It’s a full spectrum play. You’ve got to support the companies that are going to use those facilities and you’ve got to train the personnel who are going to work in those facilities. In Ontario alone, we’re going to hire 85,000 people into biomanufacturing by 2030, but where are these people coming from?

With respect to training, the average student that comes out of a STEM program is not ready to walk into a biomanufacturing and GMP-compliant facility [good manufacturing practices (GMP) are applied to ensure drugs meet standard level of quality] and actually work from day one. We aren’t training people sufficiently.

We have a couple programs right now — CASTL and CATTI — that are training STEM graduates to work in a GMP environment but they’re limited in how much they can do with the funding that they’ve had to date. It’s not inexpensive training. To keep them up to speed, students need to work on state-of-the-art equipment. In the biomanufacturing space, it’s constant upskilling and reskilling, but they’re good high-paying jobs.

 
What are the biggest manufacturing challenges that Canadian SMEs are facing today?

SMEs are cash-strapped. They’re not getting sufficient capital to actually think about manufacturing at this point in their development. A lot of the problems will come when they get to the clinic because they haven’t had the capital and the funding to really address some of the shortcomings in their manufacturing process. They’re going to be playing catch up. Once they’re able to get out of the clinic the process that they’re using is not scalable to a commercial scale.

 
Why is the transition from clinical-scale to commercial-scale manufacturing so difficult for biotech companies?

Within a short period of time of receiving approval for a drug from clinical trials, you have to be ready for commercial-scale production. A lot of companies don’t realize that when they go into the clinic with a product that is manufactured under GMP conditions, they need to be preparing for the fact that they’re going to get approval. That means they need to be thinking about commercial-scale processes and facilities. A lot of companies get caught short because it’s a huge expense to commit to commercial scale when they’re supplying a small clinical trial.

A lot of times, the manufacturing process used for clinical trials is not going to be the same process used at the commercial-level. It’s the difference in how many vials you can produce and how much material you have to have produced. If the SME is lucky enough to have sufficient capital to actually control their own manufacturing, they don’t have the capital early enough in the process to think about it at the commercial scale.

 
What can Canada learn from countries like Australia when it comes to attracting clinical trials?

Australia is doing very well because they’ve made a commitment to running phase one clinical trials. They don’t have the population that Canada has, they don’t have the diversity that Canada has and they’re not as attractive as a clinical trial population. But, they’ve made the regulatory process very simple.

They do tax incentives, whether companies are domiciled in Australia or not. They’ve committed to training phase one clinical trial operation teams. Running the trials is very expedient and super simple. There’s one clinical trial agreement with the government of Australia and New Zealand. Compare that with North America: when you go into a clinical trial in Canada or in the U.S., you’re negotiating a clinical trial agreement with every site. It’s a long process. Getting people on trial fast is the best way to attract pharma to be here and having the manufacturing footprint in Canada serving the clinical trials is also very advantageous.

 
How does Canada compare with the United States when it comes to attracting clinical trials?

The U.S. is trying to incentivize companies to move there. Philadelphia and Washington have become real hubs for biomanufacturing as there are a lot of CDMOs [contract development and manufacturing organizations (CDMOs) that can handle the development and production of medications] there.

Nevertheless, it’s not a hard sell to have our facilities used by other companies and to get them to come into Canada as long as they can be eligible for SR&ED grants. Such incentives would make Canada way more competitive than any other jurisdiction for doing contract manufacturing because CDMOs in Europe and in the U.S. cost a fortune.

Canada does have an opportunity right now because we have invested in these facilities. Especially because the U.S. dollar goes very far here.

 
How does Canada’s pharmaceutical pricing environment affect its competitiveness as a destination for life sciences and biomanufacturing investment?

To really attract pharma, we’ve got to be competitive on drug pricing. Because we’re not a big market and we cap drug pricing for pharma, it’s easy for pharma to make the decision to not bother with the Canadian market. It’s not worth their time and effort. Now, with everything that’s going on in the U.S., there’s so much pressure to protect the U.S. market, Canada could really fall by the wayside if we don’t do some things to keep us competitive.

 
What could help accelerate growth in Canada’s biomanufacturing sector?

There’s a lot of focus right now on defense and dual use, and the money that’s going to be targeted for that in Canada. There are a lot of technologies in the biomanufacturing space that are poised for dual use of defense applications, such as vaccines, viral therapies, cell therapies and everything medical devices. There’s a lot of money that’s going to be spent in the next three to five years to meet our NATO requirements. That could fuel this area quite nicely.

About this series

The Building Biotech series explores various barriers biotech startups face in commercializing their solutions in Canada. We conducted in-depth interviews with 50 experts nationwide, issued a national survey to 320 biotech companies (receiving responses from 33 firms), and held a roundtable discussion with 25 sector leaders. Find other articles in the series here.