Corporate Partnerships On The Rise: The Toronto Opportunity

21 Apr

By Dianne Carmichael, Guest Writer; Managing Director, Health Innovation & Venture Services, MaRS Discovery District

Blog Post Series #2 of 3


Toronto is poised to be a super hub of health. The reason: The old in-house research model of big pharma is being augmented by more aggressive partnering and co-development, part of a new outsourcing strategy for everything from drugs to medical devices.

Toronto did not fare well under the old model. In its heyday, labs such as Merck in Montreal had an annual budget of approximately $90 million and employed 300 people in Quebec. Rarely did big pharma engage with the kinds of smaller R&D firms which are plentiful in Toronto’s Discovery District.

That is all changing thanks to the sweeping remodeling of innovation in life sciences. With product pipelines thinning and patent cliffs looming for key money making products, more and more corporations are looking to acquire or invest in regions such as Toronto — where top researchers and nimble, red tape-free startups are the norm.

The new M & A approach to life science research is driving new corporate partnerships in innovation hubs such as MaRS, where the likes of GE Healthcare and Merck are revamping the health sector and investing in early in startups.

Take Johnson & Johnson Innovation and its JLABS brand that has previously set up incubator spaces in San Diego, San Francisco, Boston and Houston. It chose Toronto as the place to build its first lab outside the U.S. due to the MaRS Centre’s location, surrounded by several research hospitals, and its ability to support entrepreneurs looking to develop, scale and market globally by matching them with mentors, other corporations, public, private research institutions, capital and multi-disciplinary convergence opportunities. JLabs@Toronto’s goal is to accommodate up to 50 early-stage health and life sciences startups pushing the state of the art in biotech, pharmaceuticals, medical devices, consumer and digital health technologies in its 40,000 square-foot space.

In another promising example of corporate partnership in the Toronto area, LEO Pharma, the multinational Danish pharmaceutical company, will be launching its first innovation lab in North America, at a total of $100 million in investments. The selling point for LEO was exactly the ability to partner with startups, including investing in them.

Many corporations which have not been historically involved in health innovation are now making bigger bets with the startup community in Toronto. For example, since IBM put its Watson supercomputer to work on health data predictive analysis, the tech giant has closed a number of deals with care providers and technology disruptors, including Medtronic (a Canadian company, supported by the MaRS EXCITE program).

GE Healthcare is another new partner active in the region. It recently announced a joint $40-million investment with the Canadian government to launch a centre for advanced therapeutic cell technologies at MaRS, led by by the internationally renowned Centre for Commercialization of Regenerative Medicine. The centre was launched with the goal of partnering with pharma, biotech and cell therapy companies to offer them access to physical facilities, as well as expertise to help develop and scale the cell volume production required for clinical and commercial use.

Kieran Murphy, the CEO of GE Healthcare’s life sciences business, commented at the launch of the new centre: “Toronto’s concentrated and collaborative clinical infrastructure, combined with the strong guidance of the internationally-renowned CCRM, make it an ideal location for the centre.”

In another example of a new corporate entrant to the health innovation field in Toronto, Autodesk Research is also moving to the MaRS Centre, joining in on the efforts of the groundbreaking Parametric Human Project: a consortium of scientists from 28 research institutions worldwide, tasked with creating a complete biomechanical digital human model, with the promise to revolutionize the future of clinical trials and the commercialization of health innovations.

And additionally, Life Science Nation has added Toronto as the first international destination on the Redefining Early Stage Investments (RESI) conference circuit, bringing a new constituency of global investors to the annual MaRS HealthKick Innovation Challenge.

These are just some of the partnerships that show the ways in which corporate health giants are getting more involved with and supporting the work of health innovators and startups while reinventing their own R&D model along the way.

Also at the launch of the new centre for advanced therapeutic cell technologies at MaRS, the head of CCRM, Michael May, highlighted the view of the Toronto scene:

“We’re making connections that weren’t possible in the past; Bringing together biologists, engineers, clinicians, manufacturing specialists and business professionals,” said May. “We’re building a critical mass that is putting Toronto on the radar as a top-tier biomedical research centre.”

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