My standard opening is that if we learn through failure, I ought to be a bloody genius.
We talk a lot about innovation. We hear the word “innovation”. I find it to be a horribly over-used, abused, misused word. It's in everything now, from television ads all the way out. Everything's supposed to be “innovative”. From my point of view, innovation occurs when someone takes research and converts it to a useful product. A useful product is a drug, it's something that helps people, and it helps not only their health but it helps the economy. That is my definition of the word “innovation”.
Initially, I trained as a neurologist. Neurology is known as the “diagnose and adios” specialty, because we see people and say, “That's what you've got; no, there's nothing we can do; 'bye”. After I did this, I went back and went into drug design so that I could design and develop drugs. Basically, I'm going to make a few statements about what it's like to try to design drugs in Canada.
From my own point of view, I have been working primarily in neurologic diseases as one of the co-founders of a company called Neurochem Inc., which produced the drug Tramiprosate. This was the first drug to reach phase three human trials for the treatment of Alzheimer's disease. Regrettably, that drug was unsuccessful, but it was a company that ultimately raised over $100 million and had approximately 200 employees. Because of this, I have a strong interest in drugs and the effect drugs have not only on medical but also on economic health.
Recently, as a curious exercise we looked at 186 countries in the world that do some sort of science and wondered how many of those countries actually produce drugs. It was not that many of the 186. We looked at a whole bunch of descriptors and what it is that makes a country successful in drug design. Really what it comes down to is the two most useful descriptors are the country's GDP and population. We then developed a prediction algorithm based upon the GDP and population of all these countries, and did a linear regression analysis to try to produce an equation which asks if we can predict how many drugs a country can produce based upon its size and wealth. If you do that and look at countries all around the world that produce drugs, you can come up with a fairly good equation that is fairly accurate in predicting how many drugs a country can produce.
If you look at the 20-year period from 1990 to 2010, that two-decade period, and you apply this equation to Canada, we should have discovered 16 drugs in that 20-year period for a country of our size and wealth. In fact, we produced six. This gives us what I call a drug discovery deficit of about 10 drugs over the course of 20 years. The question that arises is why. Why haven't we discovered more drugs? As I said, drugs are useful to the health and wealth of our nation. A drug like Lipitor in its heyday was producing billions of dollars per year and it would be bloody nice to have a Lipitor that came out of Canada.
What are the factors that contribute to our drug discovery deficit in Canada? First of all, we don't really have any multinational drug companies in Canada, and we don't have any drug companies doing industrial-based research in our country, so this certainly is a liability to enabling us to convert research to product.
Second, there really is a marked shortage of seed-stage venture capital in Canada. We simply don't have a whole lot of venture capitalists who really have what it takes and the interest to take on this problem. There's a real valley of death between research and a product. When you do research and you take it to a drug company, they ask if you have all this information on it. Most of the time you don't, because it takes venture capital in order to get some of that information in place. As a result, we have this desperate shortage of seed-stage venture capital.
The venture capitalists that we do have, who might be interested in early-stage biotech space, are risk averse. They want the product so bloody de-risked by the time they get it. You say that you're ready for a phase three trial, which is what you want, but you hear, “Sorry, we're not going to be there.” I find that some of the venture capitalists who are interested in early-stage investing also lack the skill set necessary to meaningfully assess some of the biotech opportunities that come their way.
Another issue comes from the structure of our university system. We are still built very much with departments. We have departments of biology, departments of pharmacology, and departments of chemistry, and usually they don't talk to each other. We have very much of a silo structure. If we are trying to convert research to products, it has to be multidisciplinary. We have to have people talking to each other. A silo environment is wrong. We really have to have something in place that promotes a multidisciplinary approach to product development and to drug discovery.
In the particular area of drug discovery—and I'm going to focus particularly on drugs—we have a shortage of medicinal chemists in Canada. Medicinal chemists are the types of people who make molecules. Chemistry departments in Canada don't produce medicinal chemists. Schools of pharmacy don't produce medicinal chemists either.
We really have a shortage of people who want to sit down and make drug molecules. Neither NSERC nor CIHR has any programs that nurture medicinal chemistry. My impression is that NSERC focuses on organic chemistry, saying that medicinal chemistry should be done by CIHR, and CIHR says that it's chemical and so should be done by NSERC. They rather fall into the cracks, so we have a bit of a shortage.
My last comment about the university is that I think we have some very strong biomedical and biological researchers in Canada, but knowledge about patents and about knowledge transfer and actually converting research to products is not well developed or understood in this particular group. You're not really encouraged to do it by your university. Progress through the ranks is by publication, not usually by patents. I think this is an issue.
In an attempt to address some of this, about two years ago a colleague and I coined the phrase “micropharma” and published an opinion paper on drug discovery today. We talked about the rise of micropharma. We defined micropharma as small biotech companies that spin out of universities, university institutes, or hospitals and that are disease focused. They're small, built out of 10 or 12 people, and really focused.
One of the strengths of micropharma companies is they can change direction quickly. It's not like a great big behemoth of a company, such that it's like putting your shoulder to an ocean liner to try to move it. A micropharma company is something small that can react quickly.
If we look at it, big pharma is now failing us. There are huge layoffs happening in big pharma. The drug pipeline is not what it should be, and they're not producing drugs. There is a huge unmet need out there, but also there's an opportunity. We have a strong university system within this country. With correct nurturing we could have increasing numbers of micropharma and drug discovery endeavours coming out of our universities, a number of which could result in products that ultimately could be useful, because there certainly is a huge number of unmet clinical needs.
Thank you.