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Biotech Industries The most prominent biotech industries in Canada are pharmaceuticals, agriculture, and medicine, each of which is rated as good. Biotech computing and biomaterials, which are rated at fair, are less signi cant. The military biotech industry, with a rating of poor is relatively insigni cant, primarily because of Canada s limited military spending overall. In the Canadian pharmaceutical industry, the trend for biotech compa nies from 1997 through 2001 was an increase in a focus on therapeutics, at the expense of agriculture and diagnostics. In 2001, the largest sector of the Canadian biotech industry was therapeutics, accounting for 57 percent of all rms. Agriculture was the second largest sector, with 15 percent of biotech rms, down from 26 percent in 1997. This reduction in number of biotech rms represents a consolidation of the industry. Approximately 40 percent of Canada s biotech revenues in 2002 were derived from agricul ture. Diagnostics was third, accounting for 10 percent of biotech rms, down from 22 percent in 1997. Although Canada doesn t host corporate headquarters for any of the major multinational pharmaceutical compa nies, Merck, Astra, Hoechst Marion Roussel, Amgen, Lilly, and GlaxoSmithKline do have production facilities in Canada. The medical biotech industry is robust, given the public health-care in frastructure of medical research facilities and medically-oriented Networks of Centers of Excellence. Many of the landmark discoveries in medicine, such as the discovery of Insulin in treating diabetes, were made in Cana dian medical research centers. Canada s biotech computing industry is strengthened by programs such as the Genome Canada Initiative and the country s overall computing infrastructure. The $194 million initiative focuses on functional genomic activities, genomic sequencing, genotyping, and other bioinformatics com puting. Despite this infusion of capital, only about 9 percent of Canadian biotech companies are involved in genomics research as of 2001. Similarly, although there is activity in biomaterial research and development, includ ing at least one rm developing recombinant spider silk for a variety of military and civilian uses, there are few companies relative to other sectors of the biotech industry. According to Canada s Department of Finance, the defense budget for Canada is only about $580 million through 2005. In comparison, the United States defense budget is approximately $580 million every 19 hours. Thus, the amount of funding available for biotech research and de velopment is considerably less than that available to the biotech industries in the EU and the United States. Given funding limitations, the Canadian government is nonetheless active in promoting military-supported research and development through programs such as Defense Research and Devel opment Canada s (DRDC s) Business Development Of ce. The DRDC is
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an agency within the Canadian Department of National Defense, responsi ble for providing leading-edge science and technology to the Canadian Forces. The DRDC Business Development Of ce assists biotech and other industries by privatizing the product of publicly funded research and devel opment, primarily by licensing technologies to commercial rms and by working with the Defense Industrial Research program that partners with industries to develop and commercialize products. Although Canada is second only to the United States in terms of the number of biotech rms, Canadian rms in all areas are on average much smaller than their European or American counterparts. As a reference for comparison, only two Canadian rms have market capitalization in excess of $1 million, compared to 8 rms in Europe and over 30 in the United States. The typical Canadian biotech rm employs fewer than 50 employ ees and is less than 6 years old, according to The Canadian Biotechnology Industry Report 2003, produced by Canadian Biotech News. Furthermore, BIOTECanada reports that the average annual revenue of Canadian biotech rms is $2.5 million, compared to $4 million for European compa nies and over $17 million for companies in the United States. Summary Canada s proximity to the biotech centers of activity in the United States, its large number of biotech rms and federally funded Net works of Centers of Excellence create an environment supportive of sec ondary biotech research, development, and production activities outside of the primary centers in the United States and Europe. Although growth continues to be limited by labor shortages, nancing through venture capital and strategic alliances continues to fuel the biotech sector. The best prospects for growth are in the areas of pharmaceuticals, agricul ture, and medicine.
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