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NEOMED to play key role in Quebec’s new life sciences strategy

An Inception Sciences Canada researcher working at NEOMED’s labs.

Three Quebec cabinet ministers and more than 150 other dignitaries used the NEOMED Institute in Montreal as the backdrop for the May 5 launch of an ambitious plan to make the province one of the top five North American life sciences clusters within a decade. It is currently ranked tenth.

“It’s no coincidence that our site was chosen to launch the Quebec Life Sciences Strategy,” says Donald Olds, CEO of the NEOMED Institute, one of several organizations singled out in the Strategy as being key players in Quebec’s life sciences ecosystem.

A top goal in strategy is to attract $4 billion in private investment to increase the number of Quebec-based firms and to have a supporting ecosystem for growth-stage companies.

The Senior Director for Life Sciences investments with one of Canada’s largest investors in the sector, the Fonds de solidarité FTQ (Fonds), sees NEOMED playing an even greater role in the future in helping to attract new investors, grow companies and bring new medical therapies to market.

“We see NEOMED as a key component of the life sciences ecosystem. It is providing a pipeline for biotech opportunities in Quebec, which fulfills our goal of deploying a substantial amount of capital in biotechnology companies every year,” says Didier Leconte. The Fonds has currently one investee companies located at NEOMED—enGene, a gene therapy company, while some other companies it supports use NEOMED’s facilities and services.

Michèle Houpert, Director, Life Sciences Branch at Quebec’s Ministry for the Economy, Science and Innovation, agrees that NEOMED fills an important gap in the province’s life sciences sector. At the end of 2012, AstraZeneca shuttered its 12,500 square metre research building in Technoparc Montréal’s Saint-Laurent campus. NEOMED took over those world-class facilities, hired many of the company’s employees, and assumed some of its advanced research projects related to small molecule therapeutics. About two years later, a similar deal was reached GlaxoSmithKline (GSK) which had decided to close its 6,500 square metre research lab in Laval, specializing in the development of antibodies and vaccines.

“Big pharma’s business model has changed which is resulting in labs closing in many regions, including Quebec,” says Houpert, an observer on NEOMED’s board of directors. “With investments from Quebec, the Networks of Centres of Excellence and industry partners, NEOMED leverages its industrial experience to create a dynamic research cluster that bridges the gap between university research, small biotechs and large pharmaceutical companies.”

NEOMED takes a highly practical approach to drug development that is grounded in world-class science, collaboration and commercial sustainability. It provides academics and small biotechs with industrial expertise in drug discovery and development, combined with funding and a favourable ecosystem to advance research to the human proof-of-concept stage, when it is more likely to be licensed or sold to a large biotech or pharma company.

“Starting a new lab is very expensive and NEOMED had all of the specialized infrastructure needed to support a start-up company,” says Dr. Denis Riendeau, Executive Director of Biology, Inception Sciences Canada Inc., Montreal. “Through NEOMED, we had the equipment and the space that allowed us to establish chemistry, biology and DMPK (Drug Metabolism and Pharmacokinetics) capabilities to begin our research programs, and to build our group from one to 16 employees. It would have been more difficult and much slower without NEOMED – and in our business, speed is of the essence.”

Those lower start-up costs are important to investors like the Fonds. In the past, a new biotech company would hire a full team of senior executives, lease a building, buy equipment and hire scientists and technicians. If the clinical trials failed so would the company in many cases.

“We like NEOMED’s virtual approach where it plays a role in performing and managing some development activities on behalf of some companies,” says Leconte. “Under the old model we would fail all together after investing say $40 million in a company. Now you can start with about a third of that amount and use organizations such as NEOMED. So instead of investing $40 million in one company in a first instance, for example, you can invest the same amount in three companies then support the growth of successful ones.”

“NEOMED also plays an important role by providing a physical cluster where people can meet, discuss, collaborate and meet with CROs (contract research organizations),” adds Leconte. “It’s a good place for our investees to get to know each other and share challenges.”

NEOMED’s two fully integrated R&D facilities in Saint-Laurent and Laval are home to 30 biotech companies and CROs, and over 300 employees, including 72 people that work for NEOMED’s for-profit CRO, NEOMED Labs. That’s more employees than AstraZeneca and GSK had before they closed their Montreal operations.

The labs function as open-access drug discovery hubs where companies lease space and access specialized chemistry services and commercialization support. Much of the earlier stage research once done by big pharma is now done by these companies, including NEOMED Labs, which contract services to multinationals, including GSK and others. This unique approach creates a sustainable business model for young biotech firms and for NEOMED.

For example, in February 2017 NEOMED announced an exclusive worldwide licence agreement with Laval-based BELLUS Health for the development of a treatment for chronic cough. The research program was initiated by AstraZeneca scientists in Montreal and transferred to NEOMED in October 2012 for further development.

“BELLUS was looking for a new asset to build their company up and after a lot of looking they identified the P2X3 program we had developed for chronic cough and licensed it from us. They paid us $1.7 million cash and $1.5 million in equity so we own almost 10% of a public biotech company now. We will take these resources and reinvest them in our R&D pipeline,” says Olds.

Expansion plans

NEOMED has quickly become the victim of its own success. Its two facilities are now full and plans are underway to build new chemistry and biology labs at the Saint-Laurent site.

“I’m reasonably confident that in a fairly short period of time we’re going to be successful because there’s no question the demand is there and it’s perfectly aligned with the Quebec and Canadian strategies for growing the life science sector,” says Olds.

NEOMED is also working to expand its model across Canada. Its executives have already begun meeting with global pharmaceutical and biotech companies to highlight the leading-edge science happening at Canadian universities and at NEOMED.

“Another of my missions,” adds Olds, “is to meet with all the heads of the pharmaceutical and large biotechnology companies and let them know if they ever take a decision like Astra Zeneca and GSK did in Quebec they should be speaking with us because we have the skill set and track record to replicate this model elsewhere in Canada.”