How a bit of fine tuning is growing P.E.I.’s bioscience cluster

When the board of the PEI BioAlliance met last month for its first strategy session in three years, it didn’t exactly have to rip up its old plans and start afresh.

No, a better term for the BioAlliance’s task would be “fine tuning.” The BioAlliance knows that in six years it has established a successful model, with a gaggle of bioscience companies and organizations employing almost 1,000 people and the private sector segment growing strongly.

The partners in the alliance are in no hurry to fix what isn’t broken, so they’re building on success with a few new or enhanced initiatives. “This is all about building credibility,” says executive director Rory Francis from his Charlottetown office. “You build credibility and you attract IP, and then you attract capital and people.”

Members of the bioscience community launched the BioAlliance in 2005, shortly after the National Research Council’s Institute for Nutrisciences and Health opened in Charlottetown. Given its history in food production and the strengths of the University of P.E.I., the bioscience sector was an obvious one on which P.E.I. should concentrate; the BioAlliance served as a guiding force for its growth. Francis, a former deputy minister in the P.E.I. government, says his organization isn’t a trade association so much as a “fourth pillar” working with industry, academia, and government to develop the cluster.

Over the years, it has made a few key decisions that have contributed to industry growth. For example, while human drug development can be incredibly lucrative, it’s also fraught with risk and multi-year regulatory processes. So the BioAlliance and its partners have instead encouraged entrepreneurs and researchers to focus more on personal health care products and fish and animal health. Its biennial VetHealth Global conference, one of the world’s leading gatherings for animal health, has drawn the CEOs of Pfizer Animal Health, Novartis Animal Health, and other big hitters.

The results have been impressive, especially in private sector growth. In 2010 the companies in the BioAlliance sphere reported $95 million in revenue, a gain of 100% over five years. The number of jobs in the sector has almost doubled, with just fewer than 575 employees in the private sector and 400 in the public sector, including research.

Statistics on research and development take years to confirm, but Francis believes there is currently about $75 million in R&D ($20 million to $22 million of it in the private sector), up from a confirmed $68 million in 2008. “The important thing is the trajectory,” says Francis, “and the trajectory in the private sector is higher than in any other sector.” The growth has included the development of several successful companies headquartered on the Island, including Island Abbey Foods, BioVectra, and Neurodyn. So how do the BioAlliance partners improve on this success? The first step is to focus on attracting private capital and expose the entrepreneurs to sources of that capital. The BioAlliance has a tradition of “in-missions” in which it flies leaders in a field to P.E.I. to meet people, rather than flying a lot of Islanders around the world; in the near future, it wants to fly in more venture capital managers.

There is also a range of projects, from screening companies and working with the Canadian consulate in San Francisco to connect with potential investors, to a commercial services initiative that will help incubate companies by analyzing and improving business plans. The body is also developing a regulatory strategy to help companies understand and plan for the often treacherous job of gaining regulatory approval.

All of these efforts will complement the development of the new $30-million, 60,000-square-foot BioCommons, the first phase of which is due to be completed this year. It’s expected to host 500 employees in five years. That private sector trajectory Francis mentions looks like it will continue to be quite steep.

Peter Moreira is the principal of Entrevestor.com, a website with news and analysis on investment and entrepreneurship in Atlantic Canada.