Industry Committee on April 8th, 2022

[The Chair, Liberal, Joël Lightbound]

Welcome to meeting number 17 of the House of Commons Standing Committee on Industry and Technology.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Tuesday, March 1, 2022, the committee is meeting to study domestic manufacturing capacity for a COVID-19 vaccine.

Today's meeting is taking place in a hybrid format. For those present in the room in Ottawa, you know the rules in place, so please govern yourselves accordingly.

I want to thank all the witnesses who are with us today. We have many witnesses for the panels in both the first and the second hours.

For the first hour, from the Department of Industry, we have Mr. Eric Costen, senior assistant deputy minister, industry sector.

We also have Rodrigo Arancibia, Senior Director, Life Sciences and Biomanufacturing Branch; Darryl C. Patterson, Director General of the Life Sciences and Biomanufacturing Branch; and, lastly, Daniel Quinn, Director, Research Infrastructure and Outreach, Science and Research Sector.

From the National Research Council of Canada, we also have Maria Aubrey, Vice-President, Strategic Initiatives; and Lakshmi Krishnan, Vice-President, Life Sciences.

Thank you, everyone, for being with us today for the first hour.

In the second hour, we will hear from Dr. Alain Lamarre, Full Professor at the Institut national de la recherche scientifique, who is appearing as an individual; John R. Fulton, President of Biolyse Pharma Corporation; Andrew Casey, President of BIOTECanada; Oliver Technow and Marc Sauer from BioVectra; and, lastly, Dr. Volker Gerdts, Director and Chief Executive Officer of the Vaccine and Infectious Disease Organization.

As we have a very full agenda, I would ask everyone to stick to their allotted time. I normally have a small yellow card to signal one minute left and a red card to indicate that time is up.

Without further ado, we will begin the first hour of our meeting with the first witness panel.

Mr. Costen, the floor is yours.

[Eric Costen, Senior Assistant Deputy Minister, Industry Sector, Department of Industry]

Thank you, Chair.

Good afternoon, members. On behalf of my colleagues, we're very pleased to be here today to provide you with an update on domestic biomanufacturing capacity in Canada.

It's well established that at the outset of the pandemic, Canada had very little of the biomanufacturing capacity required to produce the relevant vaccines. This reality was the result of a 30- to 40-year decline in the sector, which saw major firms exit the country. It hindered our ability to attract manufacturers of COVID-19 vaccines to Canada.

From the very outset of the pandemic, the government immediately set to the task of addressing these biomanufacturing gaps through a series of strategic investments. This process began with a thorough review of Canada's existing industrial capabilities for biomanufacturing, looking at existing production capacity in particular in order to identify both critical gaps and existing assets where there were opportunities for growth.

Informed by this view and motivated to urgently expand domestic capacities to develop and manufacture vaccines, the government immediately sprung to action. Since the spring of 2020, there have been investments of approximately $1.6 billion in new vaccine, therapeutic and biomanufacturing projects.

The government's long-term plan to ensure an innovative, responsive and resilient sector was articulated in the biomanufacturing and life sciences strategy, which was announced last summer. The strategy has two broad objectives. The first is to grow a strong and competitive domestic life sciences sector with cutting-edge biomanufacturing capabilities. The second is to fundamentally enhance Canada's preparedness in order to respond to future pandemics and other health emergencies.

The strategy has five pillars in pursuit of these objectives. The first is strong, coordinated governance. The second is to strengthen research systems and the talent pipeline. The third is to grow world-leading companies in the sector. The fourth is to build public assets and public capacity. The fifth is to enable innovation through world-class clinical trial systems and the regulatory environment.

Under these five pillars, the strategy aims to build flexible manufacturing facilities across a portfolio of cutting-edge technology platforms to ensure that Canada has the ability and the flexibility to address a wide range of infectious disease threats, while also fostering a sustainable industry that will drive economic growth. One of the first actions was to start construction on the NRC's biologics manufacturing centre in Montreal, which is an end-to-end production facility that will be capable of producing a wide range of vaccines and other biologics.

The government has made several investments across the country, building on areas of strength and where there is a strong base of innovation. For example, it's providing funding and support for the University of Saskatchewan's Vaccine and Infectious Disease Organization, or VIDO, for the clinical trials of its two COVID-19 vaccine candidates as well as an expansion of its facilities.

To support end-to-end vaccine manufacturing capabilities across a range of technology platforms, investments have been made in companies such as Sanofi Pasteur and Resilience Biotechnologies, the latter of which has a multi-year agreement with Moderna to now produce their drug substance for their COVID-19 vaccine at its facility in Mississauga.

To build up capabilities and supply chains in mRNA more broadly, the government has also invested in BioVectra's vaccine manufacturing facilities in Prince Edward Island. Other investments have been made in promising researchers and developers, like Precision NanoSystems in Vancouver.

Recognizing the success of antibody therapies in treating COVID-19, investments have also been made in pioneering developers like AbCellera, who are also located in Vancouver, in order to support their research and production activities.

Since many vaccine manufacturers and developers often use contract manufacturers to fill their vaccines into vials and to package and distribute them, steps are also being taken to ensure an adequate presence of those services in Canada. The lack of this sort of manufacturing capacity was a critical gap identified at the outset of the pandemic. We are making progress to address it.

Investment attraction is critical to ensure the sustainability and growth of this sector. In August 2021, the government signed a memorandum of understanding with Moderna, a leading mRNA vaccine developer, so that they would build a state-of-the-art mRNA vaccine production facility here in Canada. As a result of these investments and others, and ongoing work and negotiations that we expect will lead to new projects and more capacity in the months and years ahead, Canada will have a diversified production capacity for hundreds of millions of doses across a range of vaccine platforms.

A sustainable and thriving biomanufacturing and life sciences ecosystem is not possible without a cutting-edge pipeline of science and research and the talent base to drive it. To this end, two other initiatives have also been launched. The Canada Foundation for Innovation will deliver a bio-innovation research infrastructure fund to support infrastructure needs at post-secondary institutions and research hospitals. As well, federal research funding agencies are delivering a new Canada biomedical research fund, and this is designed to support high-risk applied research, as well as training and talent development.

In addition, colleagues at Health Canada are working to enhance and modernize the relevant regulatory systems, and the Canadian Institutes of Health Research is preparing to launch a new clinical trials fund. This will support clinical studies for new drug candidates.

Taken together, the investments that have been made to advance the strategy will provide Canada with a diverse and strong base of domestic biomanufacturing capabilities that will be needed to fight future pandemics.

At this time, I'd like to turn to my colleague, Maria, who will say a few more words about the NRC's biologics manufacturing centre.

Thank you.

[Maria Aubrey, Vice-President, Strategic Initiatives, National Research Council of Canada]

Thank you, Mr. Chair, for the invitation to speak with you today about the National Research Council of Canada, as part of your study on domestic manufacturing capacity for COVID-19 vaccines.

I'd like to begin by acknowledging that the National Research Council facilities are on the traditional unceded territories of many first nations, Inuit and Métis people, and their ancestral footsteps and rights extend beyond the boundaries that exist today. We respectfully honour these peoples' rights, history and relationships with this land.

My name is Maria Aubrey, and I'm the vice-president of strategic initiatives and responsible for the design, build and operationalization of the NRC's new biologics manufacturing centre.

I am joined today by my colleague from the NRC, Dr. Lakshmi Krishnan, vice-president of life sciences. In this capacity, she oversees the human health therapeutics, aquatic and crop resource development and medical devices research centres.

The NRC is Canada's largest federal research and development organization. Throughout the COVID-19 pandemic, the NRC has been an important contributor to Canada's response, including testing PPE and helping develop a made-in-Canada solution for COVID-19 testing.

The NRC also provided support to firms through the new “challenge” programs and our industrial research assistance program, best known as IRAP. Today, IRAP has invested $81 million to support 14 small and medium-sized enterprises developing made-in-Canada vaccines and therapeutics. Through IRAP, the NRC also supported more than 2,200 innovative businesses, helping them weather the pandemic and preserving over 26,000 jobs in Canada.

Early in the pandemic, the Government of Canada asked the NRC to establish the new biologics manufacturing centre for biomanufacturing production at our Royalmount campus in Montreal, Quebec. In June of 2021, we completed the construction of the centre. This new end-to-end biomanufacturing facility is designed to produce cell-based vaccines and other biologics in compliance with good manufacturing practices, GMP. This includes viral vector, protein subunit, virus-like particles and other recombinant proteins.

The biologics manufacturing centre has a production capacity of approximately 4,000 litres, which could translate into approximately two million doses of a vaccine per month. It is important to note, however, that the number of doses will vary widely depending on the specific vaccine and the manufacturing yield.

The biologics manufacturing centre was built to fulfill a public good mandate. This means if another pandemic or health emergency strikes, the biologics manufacturing centre will be made available to produce cell-based vaccines or other drugs to keep Canadians healthy and safe. In non-pandemic emergency times, it will focus on public interest projects such as the production of drugs for rare diseases to support the health of Canadians and protect those at high risk. Collaborating with industry and academic partners, the biologics manufacturing centre will complement and support Canada's domestic capacity and knowledge in biomanufacturing.

In June 2021, through the budget implementation act, the NRC received royal assent for the legislative authority to engage in the production, on any scale, of drugs and devices, as those terms are defined in section 2 of the Food and Drugs Act, for the purpose of protecting or improving public health in Canada or elsewhere. This new authority allows the NRC to produce vaccines and other biologics at the BMC on a commercial scale, once all Health Canada approvals have been secured.

The NRC is now completing the commissioning, qualification and validation process of the centre to demonstrate GMP compliance. This is required for all new biomanufacturing facilities producing drugs for humans in Canada.

In February of 2021, the Government of Canada signed a memorandum of understanding with Novavax to pursue options to produce its COVID-19 vaccine at the biologics manufacturing centre once both the vaccine candidate and the facility receive the required Health Canada approvals. In February of 2022, Health Canada announced the authorization of the Novavax COVID-19 vaccine in adults 18 years of age and older.

The NRC is working with Novavax on the technology transfer. It includes pilots from small to large scale to demonstrate the required quality characteristics through engineering runs and quality production batches. Once that is satisfactorily achieved and Novavax receives approval for production at the centre, production can continue on a commercial scale.

To conclude, as an important part of Canada’s broader biomanufacturing and life sciences strategy, the new biologics manufacturing centre will help increase domestic capacity for vaccine innovation and production to bolster Canada’s resilience and preparedness. The biologics manufacturing centre is intended to serve as a foundational element for a proposed broader system of federal capabilities and assets to respond to future pandemics or other health priorities, supporting Canada’s national biomanufacturing security and sovereignty.

Thank you for your time, and we’d be pleased to answer your questions.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Costen and Ms. Aubrey.

Mr. Généreux, you have six minutes.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Chair, and thanks to the witnesses.

Mr. Costen, can you tell us whether Medicago is one of your vaccine development partners in Canada?

[Eric Costen]

Absolutely, and thank you very much for the question. Medicago is most certainly one of the vaccine manufacturers in the country that we've invested in over the last number of years.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

When the Government of Canada decides to invest in businesses to develop and produce vaccines, what processes are put in place to determine who the owners and partners of those businesses are?

You can probably see my next question coming. Has the Canadian government checked to see who Medicago's co‑owners and partners are? Based on what we now know, and barring evidence to the contrary, that business won't be able to sell its drugs or vaccines anywhere else but in Canada.

[Eric Costen]

That's a very important question. I'm happy to answer it and to provide as much information as I can regarding the process for making investment decisions and, quite frankly, the situation regarding Canada's investment in Medicago.

The first thing I would say is that there is an extensive process for vetting requests for funding under the strategic innovation fund, a significant due diligence that, of course, includes a significant examination of the financial situation of the applicant, including the ownership structure.

What I would do is go back to the time frame in which the decision for funding Medicago was made. The basis for those decisions was really shaped by the quality of the science and the view from Canada's experts regarding what held the most promise in Canada to quickly bring an effective vaccine to market. Of course, you'll recall that in 2020 there was a very urgent need to invest in a broader range of efforts to develop and bring to market a safe and effective vaccine.

Medicago has long been recognized by experts as being one of the stronger and most scientifically proven vaccine manufacturers operating in Canada. This view is not only the view supported by the Government of Canada. It's also one supported by the U.S. government through their BARDA and DARPA programs that have also invested in the company. I think the decision to fund Medicago and develop their vaccine technology and vaccine candidate has in some ways been confirmed by the recent regulatory decision and approval of their vaccine, which is one of only six made yet to date.

Regarding the ownership structure, we were very well aware at the time that PMI held a minority share in the company. It was examined carefully and not viewed as a contravention of the WHO Framework Convention on Tobacco Control. The focus really was on the quality of their science and the promise that their vaccine candidate brought with it, knowing that, based on their science, their platform technology and the view from experts, there was a high likelihood that this could be a promising vaccine candidate and one that was worthy of investment.

The final point I'll make is regarding the WHO decision. As has been reported publicly by the company—I know Minister Champagne has stated this publicly—we're very aware that the company is looking with some urgency at the question of its ownership structure, and we continue to be in close contact with the company, understanding that they recognize the seriousness of the WHO decision and are moving to make decisions to address the challenges they face.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Costen.

I entirely agree that we want to promote Medicago's products. The question in my mind is more about the federal government's responsibility for those products.

Before investing $173 million in a business, isn't it customary to ensure that the products of that business, regardless of their quality, can be sold both in Canada and around the world?

The WHO's policy hasn't changed as a result of Medicago. It was already in place before the government decided to invest in the company.

[Eric Costen]

Again, thank you very much for the question.

At the time of the investment, it really was an investment in their vaccine candidate and looking to get an effective and safe vaccine to market as soon as possible.

The ownership structure and the challenge that it might present to them was not known at the time of the decision. It's probably worth mentioning that the PMI group owns a minority share in the company. It is majority controlled by Mitsubishi. It operates as an independent biomanufacturing company and, really, the focus was on getting a safe and effective vaccine to market as soon as possible.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Costen, let me repeat my question…

[The Chair, Liberal, Joël Lightbound]

Pardon me, Mr. Généreux, that's all the time you had.

I now give the floor to Mr. Dong for six minutes.

[Han Dong, Liberal, Don Valley North, ON]

Thank you very much, Chair.

I want to thank the witnesses for coming today and participating in this study.

My first question is for the public servants at ISED. I remember that, from the beginning of COVID, the capacity to produce a potential vaccine in Canada was widely talked about in my riding and among the public. Then we found out that the capacity to produce had been tapering off for decades.

Can you explain to me a little better what we're doing to make sure that this doesn't happen again? It was due to decisions by all governments in the past that we allowed the production of vaccines to leave Canada and land somewhere else. How do we make sure that this doesn't happen again?

That's for the ADM, please.

[Eric Costen]

Thank you. It's a pleasure to answer that question.

You're absolutely right. At the outset of the pandemic, when Canada went looking for the capacity that it could rely on to develop and manufacture a COVID vaccine, it found a sector that had been largely diminishing over many years. I could certainly turn to my colleague Darryl Patterson on that. He could describe to you some of the major exits over the last few decades.

Before I do that, I might really emphasize that, having done that survey and having looked for a number of very core capacity attributes.... We were looking for the ability to manufacture vaccines across major different vaccine platforms. As I'm sure most of the members of this committee will know, not all pathogens are the same and not all vaccines are the same. They're not all built on the same platform. In order to have a resilient biomanufacturing and life sciences sector, you need a diversity of capacity that cuts across multiple platforms, because you just don't know what pathogen is going to hit you.

As I mentioned, there are different parts of the value chain, all the way from basic science and R and D through to commercialization and so-called fill and finish. Canada had very little capacity on the back end. We've really prioritized investments now such that, when we look and we do the math on the investments that have been made, we've gone from a position where we had very little capacity at scale to fill and finish vaccines to where we have an ability to fill and finish approximately 300 million to 400 million doses per year across platforms.

Of course, that not only puts us in a position to be able to serve the domestic needs of Canadians, even in situations where you would need multiple vaccines in a given year, but it also puts the sector on a sustainable footing in order to be able to provide much-needed assistance globally.

[Han Dong, Liberal, Don Valley North, ON]

That's great. Let me just stop you there for a second. I'm sorry. I have limited time.

You talked about making sure that the sector is on “sustainable footing”. That's very important. I want to go back to my original question. What happened for them to leave Canada? Was it because the profit margin just wasn't there, or was it not sustainable to produce in Canada? Have we addressed the root cause of that problem?

You talked about more than 300 million every year now. Is that sustainable? The demand for vaccines may taper off as we exit COVID.

[Eric Costen]

If it's okay, I might turn to my colleague Darryl Patterson to answer that part of the question.

[Darryl C. Patterson, Director General, Life Sciences and Biomanufacturing Branch, Department of Industry]

Sure. I'm happy to jump in. Thank you for the question.

Of course, it was for a number of reasons that we witnessed over the last 30 to 40 years a decline in manufacturing capacity in Canada. Essentially, from the early 1970s we went from importing about 20% of our vaccines and therapeutic drugs to over 85% today. We saw a number of factors over the course of these years. One was companies concentrating their manufacturing in large markets where there are cost advantages and other underlying factors.

I think the key thing you're raising here is to make sure that we have an ecosystem that's supported, from discovery to clinical trials to commercialization and end-stage production. By focusing the strategy on all of the value chain, making those investments across the value chain and ensuring that we're developing flexible manufacturing capacity, in non-pandemic times, when those facilities are not focused on a specific vaccine, they can be put to other uses. For example—

[Han Dong, Liberal, Don Valley North, ON]

I'm sorry to cut you off, but I want to get one more point in.

How important is it—

[The Chair, Liberal, Joël Lightbound]

I'm sorry, Mr. Dong. I'll be the one to cut you off. We're very tight on time.

We'll go to Mr. Lemire for six minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Chair.

Mr. Costen, allow me to restate Mr. Généreux's question. You gave two quite different answers.

Did you or did you not know who Medicago's financial partners were before giving the company $173 million, knowing the WHO would be setting conditions respecting tobacco companies?

[Eric Costen]

As I said in my first answer, we did know. It's part of the due diligence process and looking at the financial situation of the company. Part of that is an examination of the ownership structure. There was an awareness at the outset that PMI had a minority position over Medicago.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

So perhaps there's a lesson to be learned there.

When Minister Champagne appeared before the committee, he committed to ensuring that the National Research Council of Canada's Human Health Therapeutics Research Centre would be ready in the fall of 2021.

It's important to expand vaccine production capacity, as I'm sure you'll agree. Last year, everyone came and told us it was appalling that Quebec's pharmaceutical sector, a jewel in the crown of Quebec's economy, had been abandoned and that more new money would therefore be invested elsewhere in Canada.

Are there still a lot of delays in the process for approving research centre laboratories in Canada?

[Eric Costen]

I will turn to my colleague Daniel Quinn, who has oversight over research infrastructure and can probably provide you some information regarding the process for laboratory approvals.

Daniel.

[Daniel Quinn, Director, Research Infrastructure and Outreach, Science and Research Sector, Department of Industry]

Thank you for the question.

Absolutely. Supporting downstream biomanufacturing capacity with upstream investments in research and talent in post-secondary institutions and research hospitals is critical. This includes the applied research funding supports and the infrastructure to support it.

Part of the consultations in 2021 found that along with the science [Technical difficulty—Editor].

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

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