P.E.I. has been investing heavily in creating ideal conditions to grow companies in bioscience. The next challenge: bringing ex-pats home

         
                                                                        ^{_{PEI BioAlliance's Rory Francis}}

Maritime weather isn’t often counted as one of the region’s selling points. But on this day, Rory Francis has struck meteorological gold: Charlottetown is warm and awash in late-summer sunlight. It’s a perfect day to make his pitch. Francis is guiding an executive from an Indian pharmaceutical company on a tour of the Prince Edward Island capital. Specifically, he’s aiming to show off the city’s bioscience cluster, an expanding network of tech companies and research organizations that are redefining, if ever so slightly, the Island’s traditional farming-and-fishing economy.

Francis is trying to convince his guest that P.E.I. would make a nice home for a pharmaceutical research lab. The tour began at the National Research Council Institute for Nutrasciences and Health on the University of Prince Edward Island’s campus and made its way to a construction site on the edge of Charlottetown. Nearby, a crew of workers clad in hard hats is hammering away inside the shell of a new building. Large patches of red dirt, a distinct symbol of the Island, lie exposed where other buildings will eventually stand.

This is the site of the province’s $30-million BioCommons Research Park, a 65-acre development that will eventually house lab, office, and manufacturing space, as well as an incubator for early stage companies. Initial tenants are scheduled to enter the BioCommons later this year, with development of the park expected to continue over the next decade. Within five years, Francis expects the site to house 500 bioscience workers.

The BioCommons, which will be separated from the nearby North River by a buffer of green space and trails, represents the future of P.E.I.’s bioscience sector, which has grown at an impressive rate over the past half decade. In 2005 the Island was home to just 12 bioscience companies; today there are 30. Over that same time period, private sector bioscience revenues have jumped from $40 million to $100 million, a figure that Francis predicts could rise to $200 million by 2015. And the sector now employs about 1,000 people, up from 500 in 2005. By 2015 that number could hit 1,500.

Francis, a former deputy minister with the provincial government, is the founding executive director of the PEI BioAlliance. The umbrella group, whose board is composed of bioscience CEOs and representatives from research institutions and government, has developed a three-word tagline: next generation prosperity. In other words, they feel the bioscience sector has the potential to reinvigorate old Island industries, create hundreds of new jobs, and lure native Islanders back home to well-paying posts.

Francis points to BioVectra Inc., a homegrown pharmaceutical company and pioneer in the local cluster. Founded in 1969, BioVectra has expanded many times and now employs 130 people across three Charlottetown locations, including roughly 20 PhDs and 10 engineers. Thanks to a number of long-term contracts, the company expects its workforce to soon grow past 200. “Agriculture, fisheries, and tourism are vital industries, but they’re not the growth areas—and they’re not attracting young bright minds and capital the way they once did,” says Francis. “This is about creating jobs and businesses that are the future of Prince Edward Island. It’s that simple. Twenty-five years from now, P.E.I. will look quite different in terms of its core businesses.”

A glimpse of that future can be seen across town at the National Research Council Institute for Nutrisciences and Health, the $13.5-million facility on the UPEI campus. Opened in 2007 on the site of a former train station, the NRC building houses researchers from a variety of organizations. The site is also home to NRC’s incubator program for upstart bioscience companies. The program allows six developing companies to rent NRC lab space and, most importantly, share high-tech equipment they couldn’t afford individually.

Donning a white lab coat and goggles, Bob Chapman strolls from lab to lab in the NRC building, pointing out some of the facility’s $9 million worth of equipment. On the top floor, Chapman pauses in front of a wall of windows. In the distance, a cruise ship sits at dock in Charlottetown harbour. Closer to campus, Chapman points out various pieces of the local bioscience cluster, such as the Atlantic Veterinary College, P.E.I.’s Bio Food Tech centre, and Agriculture and Agri-Food Canada, whose field of test crops lies not far from the NRC.

Down the hall, inside the NRC labs, researchers and scientists from the six incubator companies are busying themselves with experiments and data collection. The incubator, which currently has a waiting list, includes companies such as Neurodyn Inc., which is researching the early detection and treatment of neurological diseases such as Parkinson’s and Alzheimer’s. The current incubator companies vary greatly in their research, but all are centred in the broad field of human and animal health. “We want to work with Canadian companies to help them solve their scientific challenges so they can be more successful in the marketplace,” says Chapman, the institute’s director of research. “We’re measured on how our companies perform.”

Chapman, a native Islander and UPEI graduate, left his home province in the early 1990s. After earning a PhD in organic chemistry from the University of British Columbia and completing a post-doctorate degree at Harvard, he served as a senior scientist at Predicant Biosciences in San Francisco. Then in the spring of 2005, Chapman decided to return to P.E.I., lured largely by the prospect of working in a new NRC facility in his hometown. 

“It’s a more manageable lifestyle,” says the UPEI chemistry professor, who lives in nearby Stratford with his wife and two daughters. “It’s not like we work less here. It’s just that I spend 10 fewer hours in a car each week.” On a typical day, Chapman’s commute lasts about 10 minutes. In San Francisco that journey took up to an hour and a half. “That’s one of the reasons we’ve been able to attract people—that balance between work and life,” he says. “Everybody from my generation left P.E.I. [to look for work]. It’s good to see some of us coming back.”

It’s not just ex-pat Islanders who are being enticed to work in the bioscience sector. Take Russ Kerr, who decided to leave behind sunny Florida and move his university lab and spinoff company, Nautilus Biosciences, to Charlottetown’s NRC building. “I just happened to open a science magazine and saw an ad for a position in P.E.I.,” recalls the Scottish-born scientist at his NRC office. “I thought, ‘What the hell.’ So I stayed up that night, wrote my long letter of application, organized my CV, and sent it all off the next morning.”

Kerr, who had lived and studied in Canada before taking a post at Florida Atlantic University, had vacationed on P.E.I. as a boy, remembering the province as “a little piece of Scotland in Eastern Canada.” His family, however, had scant knowledge of the Gentle Island. “I had to convince my Florida-native wife that she and our family should move from south Florida, and the weather there, to Prince Edward Island,” says the father of three, laughing. “That took a little bit of doing. But now they all love it. I don’t think they’d move back to Florida.”

Kerr decided to leave the Sunshine State after tiring of Florida’s “dog eat dog” ultra-competitive research environment. He had also grown frustrated with having to keep his academic lab completely separate from the lab used by Nautilus, a bioscience company spun out of his university research. Kerr recalls being constantly monitored by the university, which wanted to ensure that his private company didn’t use university resources.

In P.E.I., the situation is much different: people, data, and equipment are allowed to move back and forth between Kerr’s academic lab and Nautilus’ space in the NRC incubator. “It’s very much a win-win situation,” says the Nautilus president and CEO, who also holds the title of Canada Research Chair in Marine Natural Products. “There’s money flowing in both directions. And students get to see their research go toward a commercial product.”

Nautilus, which Kerr moved to Charlottetown in 2007, centres its research on a “bank” of marine microbes (bacteria and fungi). Over many years, Kerr and his team have collected and processed close to 5,000 marine microbes, drawing them from sediment in waters ranging from the Caribbean to the Canadian Arctic. Those microbes, when placed under the right conditions, can produce chemicals and compounds useful in everything from household products to pharmaceuticals and cosmetics.

In August Nautilus signed a royalty-sharing agreement with Croda, a large U.K.-based chemical company. Under the deal, Kerr’s team will mine its bank of microbes for compounds with specific properties. For instance, are there compounds that can kill the fungus that causes dandruff? Or filter UV light? Nautilus, as the research engine, will seek the active ingredients from the microbes, while Croda, with its industrial might, will put the products into large-scale development and help take them to market in shampoos or sunscreens, for example. 

As well, Nautilus has partnered with a Scottish company to look for compounds with cancer-fighting properties. “We came up here not really knowing how things would work out,” says Kerr. “But it has worked out better than I would have thought. It’s a sharing, helpful environment. Both the company and the academic lab have flourished.”

Though centred in Charlottetown, P.E.I.’s sprouting bioscience sector isn’t confined to the capital. Head northwest on Route 2 and you’ll eventually reach Kensington, a small farming community about 50 kilometres outside Charlottetown. It’s here that North Carolina-based Technology Crops International has set up a P.E.I. division called Nature’s Crops International. At its $7-million refinery, Nature’s Crops produces specialty oils that are used in food supplements and cosmetics. Those oils are drawn from niche crops such as borage, crambe, and echium, most of which are grown for Nature’s Crops by P.E.I. farmers.

At its Kensington plant, Nature’s Crops crushes the seeds from those plants and removes the oil, which is then refined, packaged, and sold to companies that make everything from hand creams to shampoos and supplements. Borage oil, known for its anti-inflammatory properties, is used in gel cap supplements and blended into infant formula. Echium oil, a good source of omega-3 fatty acids, is also used as a supplement as well as in skin care products. And crambe oil is used in creams and hair care products.

The Nature’s Crops refinery, operational since January, has already processed five million pounds of seed and is capable of producing three million pounds of oil a year. So far the company has drawn crops from 2,000 acres of Island farmland. “Most of our crops are grown right here in P.E.I. That’s our priority—to have them grown as close to the plant as possible,” says Technology Crops vice-president Steve Howatt, who grew up just down the road from the Kensington facility.

The Nature’s Crops refinery employs 20 people and draws seed from 10 local farmers. Many of those growers use borage or crambe as a rotation crop when not growing Island staples such as potatoes, corn, and barley. In the next five years, Nature’s Crops plans to buy two or three additional crops from local growers. And at the NRC facility in Charlottetown, researchers are looking for ways to draw additional profits from seed husks and other waste material at the refinery.

“We see a lot of potential,” says Howatt, who studied at the Nova Scotia Agricultural College before earning a master’s degree in plant science from McGill University. “The development of a bioscience-related industry in P.E.I. makes sense because it is so closely linked with our natural resources. In a global community, it’s hard for a small place like P.E.I. to compete on price or volume. One area where P.E.I. can evolve is in adding value to our natural resources from the land and sea. We’re not just selling a commodity; we’re selling a solution for our customers.”

Technology Crops decided to open its P.E.I. refinery in part thanks to the efforts of Rory Francis and BioAlliance partners Innovation PEI and ACOA. Back in Charlottetown, Francis is wrapping up his tour with the visiting pharmaceutical executive from India. Ideally, the visiting executive will choose P.E.I. as the home of the company’s new research site. 

“Why P.E.I.? We put that question to ourselves on a regular basis because we have to have a really good answer,” says Francis. “Sometimes we’re talking to companies that don’t know where P.E.I. is,” he says, looking out over the BioCommons site, which is still transitioning from farmland to a business park. “This development says we’re investing in bioscience and we’re putting money into creating the conditions that companies need to grow. It requires a community effort to overcome the competition P.E.I. faces in terms brainpower and capital. We’re competing against everyone else in the world.”