Shire closes Quebec research operations, puts vaccine business up for sale

The research operations of BioChem Pharma — Quebec’s most successful and Canada’s largest biotechnology company — are being closed down little more than two years after being acquired by Shire Pharmaceuticals Group plc. The closure of the Laval operations of Shire Biologics, which Shire defends as a business decision, has shocked Quebec’s scientific and business communities.

Shire announced a major restructuring July 31st which included spinning off its vaccine business and closing its early-stage research program. Efforts by the federal government to persuade Shire management to reconsider failed late last month. Layoffs of 120 scientific personnel and the dismantling of the Laval laboratories were enacted on September 5 (see page 8).

Before its takeover by Shire, BioChem established a stellar global reputation for its vaccine research, most notably 3TC which has been highly successful in combatting the effects of AIDS. For several years it enjoyed a highly lucrative collaboration with GlaxoSmith Kline.

The company was also extremely successful in attracting hundreds of millions of dollars in public funding. This included a loan of up to $80 million from Technology Partnerships Canada (TPC) to support an ambitious $600-million research program to develop recombinant vaccines. Less than half that amount had been paid out when Shire announced that it was abandoning vaccine research. At the provincial level, BioChem received a wide variety of assistance ranging from R&D subsidies and tax breaks to financial support from some of the province’s major financial institutions. One of those institutions — Fonds de solidarité des travailleurs FTQ — is trying to put together a consortium to keep the Quebec operations alive.

TPC director Jeff Parker says the job losses and restructuring plans have no impact on the activity TPC was supporting. Although TPC has yet to discuss the situation with Shire, Parker says his organization is “concerned but not alarmed”.

“What we see and hear is that this is not an abnormal activity within the biopharm area,” he says. “There’s a focus on things closer to the market. We’re seeing this more from larger pharma and not just start-ups.”

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