Government support for biotech touted as driver for ID Biomedical’s successful sale of influenza vaccine into US market

Vancouver’s ID Biomedical Corp (IDB) has scored a spectacular home run with a long-term agreement to sell its Fluviral influenza vaccine — produced and commercialized in Canada — into the US market. The deal, valued at US$2.3-$2.5 billion between 2005 and 2014, is the largest purchase agreement ever received by a home-grown biotechnology firm.

What’s more, IDB’s capacity to enter such a massive agreement can be traced in large part to federal support for the biotech industry, particularly through Technology Partnerships Canada (TPC) and a commitment by Health Canada to purchase Fluviral for the Canadian market.

IDB successfully negotiated a supply agreement with three of the largest influenza vaccine wholesalers in the US — Henry Schein Inc, AmerisourceBergen Corp’s Specialty Group and McKesson Corp. The firms committed to purchase a minimum number of vaccine doses beginning as early as 2005 and running through to the 2014-15 flu season. The deal is contingent upon receiving clearance from the US Food and Drug Administration.

The agreement has the potential to generate significant new revenue streams and transform IDB into a Canadian biotech powerhouse. Industry observers say Canada’s longstanding support for the biotechnology sector contributed to ID Biomedical’s ability to become a global player in the vaccine market.

“This announcement … is all about high-value jobs producing a finished, high-value added product in Canada that is to be exported to the USA,” says Brian Harling, MDS Inc’s VP corporate affairs and government relations and a member of the Genome Canada scientific and industry advisory committee. “Here is another fabulous example that highlights how the Canadian government made a huge impact on building the biotech sector in Canada.”

“It takes time to realize the value in life sciences but when it arrives, the scale is staggering,” says Marc LePage, Genome Canada’s executive VP corporate development. “Public policy is a fundamental driver whether it is science policy, health care policy or innovation policy (and) the more we have alignment, the better for health, economic development and social benefits.”

In 2000, TPC invested $80 million in BioChem Pharma Inc in a major R&D project worth up to $600 million to develop its vaccine business and expand its R&D and production facilities in Montreal (R$, April 21/00). BioChem was subsequently sold to Shire Pharmaceuticals Group plc in 2001, which then put the BioChem vaccine business up for sale in 2003. IDB bought the business last September — just prior to the US vaccine shortage — giving it the capacity to fully develop and manufacture all of its products in development. It also has access to a considerable amount of the original TPC loan should it be required in the future.

“The type of transactions that are now possible for ID Biomedical have the potential to transform our company and allow us to create a significant business,” said IDB CEO Dr Anthony Holler at the time of the purchase. “With the closing of this transaction, ID Biomedical has a product portfolio, highly experienced people, appropriate facilities and the business plan to become a global premier vaccine company.”

IDB has also benefitted from direct TPC assistance. In 2001, it received $5.9 million through its subsidiary — Intellivax International Inc — to undertake a variety of R&D activities, including clinical trials of its nasal proteosome influenza vaccine (R$, June 13/01).

R$