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For Canadian biotech companies, thinking small and smart brings big rewards

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The Canadian federal and provincial governments have historically been highly supportive of the scientific community's early research seeking new therapeutic products for the health care industry.

To receive regulatory approval in Canada and the United States, such products must undergo rigorous multistage tests and trials. Over the years, sound science combined with grants and incentives has helped propel many such therapeutic candidates to a position of significant potential.

However, that's only half the battle in therapeutic-product development. If the Canadian life science sector is to become a global leader, the industry must become better at the second part of the battle, which is to translate early stage potential into later stage assets that achieve commercial status or have been developed to a point where value is created for investors. Discoveries in laboratories are of little use if they do not give rise to effective, marketable patient therapies.

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For Canadian biotech companies that is no small feat. Generally, it costs about $1-billion and takes 10 years to take a drug from the preclinical stage of development to a marketable product. And even then there are no assurances of a drug's commercial success, as we have seen recently in the area of sepsis.

Sepsis is a highly complex disease that may be associated with an infection, major surgery, trauma, burns or immunological suppression. It occurs in more than 750,000 patients in North America annually, causing 250,000 deaths, more than most major forms of cancer.

Sepsis can be caused by the body's response to bacterial products such as endotoxin, which resides in large quantities in the human gastrointestinal system. When endotoxin enters the blood stream due to a leakage or perforation of the intestinal wall, it can cause severe sepsis and septic shock, which is life-threatening.

In October, a multinational pharmaceutical company announced the worldwide withdrawal of its product for the treatment of sepsis only after it had spent significant time and money developing the drug and marketing it. Last January, another large pharmaceutical company announced the failure of a late stage, or Phase III, trial for another sepsis therapy. At present, there is no effective new treatment for sepsis.

Despite significant investment from large pharmaceutical companies, the health care sector has seen limited progress in developing new therapeutics for this complicated disease. The standard of care remains antibiotics and large quantities of intravenous fluids. Sepsis remains a serious and sizable challenge for patients, clinicians and hospitals, representing considerable drain on health care budgets.

I head up a small Canadian company called Spectral Diagnostics that lacks the deep pockets of many of the bigger North American players in the therapeutic development industry. We are, however, in the advanced stages of developing what's called a theranostic treatment for sepsis. A theranostic is a combined diagnostic and therapeutic tool. Our sepsis theranostic consists of the world's first diagnostic tool for detecting endotoxin in the blood stream, called the Endotoxin Activity Assay (already Health Canada and FDA approved, and owned by Spectral), and a therapeutic tool called the Toraymyxin column, which removes endotoxin from the blood. This combined theranotistic system is currently in Phase III trials in Canada and the United States, the final step before commercialization.

How did a company of our relatively small size get so far down the road?

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By thinking smaller and smarter, we have advanced toward huge accomplishments. Using our Endotoxin Activity Assay we have been able to focus on patients most at risk and most likely to benefit from our therapy. Where other Phase III trials may enroll thousands of patients, we expect to complete ours some time in 2013 with just 360 patients. Compared to the $1-billion typically spent by multinationals on therapeutic development, we have spent just $15-million in 10 years, and anticipate spending another $20-million to complete our Phase III trials. A lot of money, yes, but it's still a fraction of the norm.

The Canadian life science sector works marvels at the research level. To compete on the world market, however, Canadian biotech companies must demonstrate the nimbleness and creativity required to work within their relatively limited budgets. Only then can our excellent research be turned into marketable therapies.

Sepsis remains a massive challenge, and is currently without a solution. But for Spectral Diagnostics, the combination of a very specific theranostics approach and an extremely targeted patient population will hopefully help us bridge that chasm between a product with potential, and a successful commercial therapy that can save thousands of lives.

Dr. Paul Walker is President and CEO of Spectral Diagnostics

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