Posted tagged ‘AVAC’


October 2, 2009
Ryan Radke President, BioAlberta

Ryan Radke President, BioAlberta

BioAlberta chose National Biotechnology Week in late September to release its State of the Industry 2009 Report. And, to no one’s surprise, the long tentacles of the global recession touched even Alberta’s biotechnology sector
“It’s been a tough year,” says BioAlberta President Ryan Radke.
“The life science industry in Alberta is not immune to what’s going on with the general economy, so generally I’d say a lot of the categories were down anywhere between 10 to 30 percent. Revenues were down in the past year. Definitely investment was down. This is one area that is key to the life science industry in Alberta. For all elements of biotechnology, whether it is health biotech, ag biotech, industrial, environment, the key element is for companies to be able to access capital. And, unfortunately over the last year it just wasn’t there.”
This is the third time BioAlberta has surveyed its members; the previous two reports were issued in 2005 and 2007.
The 2009 report was developed in collaboration with Deloitte & Touche LLP, the results based on a questionnaire sent to the executives of 124 life science companies in Alberta. In all, 105 companies responded, giving at least partial if not complete answers, providing a response rate of 84.7 percent.
“Essentially we were looking to get in touch with our constituents, our members and get a sense from them how things are out there,” explains Radke. “How is the economy impacting the company? What could we be doing better here in Alberta? What’s working? What isn’t working? Just to get a state of the industry and see how things are going.”
Edmonton has the largest biosciences cluster in Canada and the city is certainly the life sciences kingpin for Alberta. The report shows that 58 percent of bio-industry companies are located in the Edmonton region, 33.6 percent in Calgary, and 8.4 percent in other areas.
Health biotechnology and medical devices account for 60 percent of the bio-industry. Agriculture biotechnology accounts for 12.3 percent. The rest of the industry is devoted to such things as specialty packing for infectious substances, biological specimens, natural products, industrial chemicals, and engineering services. What’s interesting is that most companies are active in more than one sector.
About one-third of companies are involved in manufacturing and another third in research and development.
As well, almost half have lead products that are already in the market; 16.7 percent are in pre-clinical testing, and 20.8 percent of companies are testing their lead products in clinical trials.
The State of the Industry report indicates some disturbing trends. For example, two-thirds of Alberta’s life science companies were created before 1999. Only one-third of Alberta’s life science companies have been formed since 2000. The report shows a downward trend in the creation of new life science companies, with only 10.5 percent being established between 2005 and 2009. It’s not exactly the sort of thing you want to hear when the province says it is trying to build a strong life sciences industry here.
Also on a downward trend is the ability of companies to raise capital for ongoing operations and research and development.
Radke points out, “Here in Alberta the investment situation has always been a tough one. Even during good times two years ago, we weren’t securing necessarily as much investment as the rest of Canada was. I think here in Alberta in all of the technology sectors, we don’t see as much venture capital action as we would like. Our public companies tend to struggle a little bit on the Toronto Stock Exchange and the venture exchanges. And so we saw a fairly large dip in this area for the 2009 report. We saw investment capital raised was almost at an all time low. It was just over $100 million, which is okay. But for the technology industry that we have here, we should be securing a lot more investment than that.”
This drop in investment is having a significant impact on cash flow for companies, most of which are small with fewer than 30 employees. The amount of cash on-hand for companies has decreased from an average of 15 months to less than 10 months. Companies are tightening their belts by letting employees go, some shutting their doors, and most cutting their R&D spending.
And revenues? The report indicates these will drop by 22 percent for 2009, although most companies also express a certain degree of optimism that they will see a recovery through 2010.
Radke suggests, “It’s not all terrible news, really. Some of the areas didn’t decrease as much as we thought they would. Employment numbers weren’t down all that dramatically, about 10 percent. So, compared to some industrial sectors, that’s not bad. This industry has managed to weather the storm really well, actually.”
He says the report indicates that companies are looking to a brighter future for the life sciences industry.
“When we started asking companies about what they saw one and two years out, I think they see the end in sight to the recession or the economic downturn. They can see that perhaps lenders will be coming back into the market, looking for good opportunities. So there’s something on the horizon that looks like a bright spot and it’s just a matter of weathering the storm right now.”
What’s significant is that the most common source of capital is what the report calls “government-facilitated programs”. Fully half the respondent companies have used these in the past and almost two-thirds intend to pursue these programs to raise capital in the future. These include the Scientific Research and Experimental Development (SR&ED) Tax program, NRC’s Industrial Research Assistance Program, along with funding from Alberta Heritage Foundation for Medical Research, Alberta Ingenuity Fund, AVAC, and the Alberta Innovation Voucher Program.
The report concludes that the number one issue for Alberta’s biotechnology companies is securing financing. And, as for government initiatives, they believe the most important thing the Alberta government can do to stimulate growth for the companies is improve the provincial tax environment through the SR&ED and other tax incentives.
“This kind of information gives us some solid data that we can talk about with members of the community, members of government, members of the industry, and say, ‘What do we want to build here in Alberta?’ And then what we need to do is figure out the roadmap of how we’re going to get there.”


Radient Technologies Leaves Lotus Land for Edmonton

October 2, 2009

Dr. David Cox

Dr. David Cox

Radient Technologies Inc has pulled up stakes and is moving from Vancouver to Edmonton.
This is good news for the Edmonton’s biotechnology sector which has experienced some tough times over the past few months.
Radient has commercialized technology first developed by Environment Canada for use in environmental remediation. Called a microwave assisted solvent extraction process, it also has applications in other areas including flavourings, herbs, nutraceuticals, pharmaceuticals, and biochemicals.
An investment of $5.5 million from AVAC, Foragen and Agriculture, and Agrifood Canada will boost Radient’s marketing efforts.
And the man leading that charge is Dr. David Cox. He was lured from his position as the head of TEC Edmonton to become the new CEO of Radient.
According to Dr. Cox, “It’s a business exercise in understanding the market. We have a nice problem. The problem is there are so many things that you can do with this technology. so many problems that you can solve, we’re spoiled for choice. And if we’re not careful, we can get distracted on too many interesting things rather than the necessary few. So job one is to understand the global market for this kind of application and then target those companies where the Radient solution will be transformative for them. And they don’t know that they need us yet. It’s my job to show them how they need us.”
Cox expects Radient will achieve this growth through licensing its technology to other companies and by manufacturing its own products.