How did experimental Canadian Ebola vaccine wind up in Iowa?

News report: Canadian Ebola vaccine to be shipped to Geneva next week

Along with the rest of our planet, I dearly hope that the researchers at Winnipeg’s National Microbiology Laboratory have discovered the 21st century’s version of Major Sir Frederick Banting, MC’s insulin discovery (and then some).

What will come as a surprise, perhaps, is the news that the Public Health Agency of Canada has exclusively licenced the intellectual property, and not to a Canadian biotech firm. As reported by The Globe and Mail:

Canada holds the intellectual property rights to the vaccine but has licensed the rights to a small American biotech company, NewLink Genetics. Based in Ames, Iowa, the company’s primary focus — until recently — has been the development of cancer vaccines. It does not have its own vaccine production facility and has never brought a product through the expensive and onerous process of gaining regulatory approval.

But because it holds the licence to one of a very few experimental Ebola vaccines — and one of only two ready for human safety trials — NewLink has found itself at the centre of a storm.

While the company has been getting assistance from a U.S. government agency — the Biomedical Advanced Research and Development Authority, or BARDA — frustrated scientists and others have questioned whether the company has the resources, finances and clout to push the vaccine forward.

NewLink Genetics (NLNK:Q) listed on the NASDAQ three years ago on the back of work its researchers had done to use immunotherapies to treat cancer. Like most early stage biotechs, the company is still looking for meaningful revenue from that research. To date, NewLink has burned more than US$150 million, and had cash on hand of about US$78 million as of Q2 (or 8 quarters of cash at current burn rates).

For the past few years, the Conservative government has tried to stimulate Canada’s innovation economy in a variety of ways. You’ve read about them here (see representative prior post “Feds on right path with Innovation ecosystem consultations” July 2-12). Direct investments, fund investments, commercial offset programs, policy directives and so forth. It took the CVCA a few years of effort (see prior post “CVCA letters to Messers Flaherty, Clement and Ignatief” Dec. 26-08), but we are now in a better place.

How is it possible, then, that not a single Canadian biotech company is involved in what could be the most important clinical trial of this generation?

Billions of tax dollars are spent annually in Canada on research and development. Much of it within university campuses and in federal medical labs. For reasons that I’ve never understood, little of this R&D is ever successfully commercialized. This commercialization step is a core ingredient for a thriving angel and venture capital ecosystem, as traction on that front eventually leads to outsized financial gains for institutional investors (which in turn fund Canadian pensions and retirement funds). Which allow VCs to raise another fund, and start all over again with a new group of researchers and entrepreneurs.

Our poor record of commercialization has always been an element of why Canada’s VC industry punches below its weight as compared to our American or Israeli counterparts. And yet, when one of the greatest potential discoveries comes along, a firm in Iowa, with no reported experience in bringing a drug to market, is given the chance to harvest the fruits of Canadian research labours. What’s the point of having an Economic Action Plan geared to the sector, if this kind of thing can happen? It would have made sense if NewLink had the bonafides to bring this product to market faster than anyone else in the world; humanity’s needs trump all. But, according to the Globe, that doesn’t appear to be the case.

And an exclusive licence? What were they thinking?

Hopefully, someone in Winnipeg has a clear answer as to how that happened; not that a “clear answer” will help soothe anyone in the Canadian biotech industry. But it might give us a window into what’s broken in the research/commercialization world, and a sense of how to fix it once and for all.

MRM