Dear LSO Members,

In 1989 the Toronto Biotechnology Initiative (TBI) published its first newsletter entitled “BioScan”. Today, as Life Sciences Ontario (LSO), we are proud to announce the launch of our new quarterly newsletter – “The Voice”.  

Building on our founding principle of “Diversity of Members, Unity of Voice”, the LSO Communications Committee has developed this publication to be an inclusive communications vehicle for all LSO members. In addition to current news and upcoming events, each quarterly publication will include an update on key LSO initiatives, an editorial column (LSOpinions), and an Entrepreneurs Corner that will include topics of interest to developing life sciences companies.  There will also be a Members Spotlight that will welcome new LSO members and profile our existing members.  

Our hope is that you will find The Voice a useful way to stay connected and up to date with Ontario’s life sciences community.  

We also invite potential contributors to contact us at admin@lifesciencesontario.ca if you have suggestions or contributions for future editions.  

Sincerely,

Jason Field
Executive Director
Life Sciences Ontario

CETA: A WIN FOR LIFE SCIENCES IN ONTARIO AND FOR CANADA

The official entry of Canada into the Trans-Pacific Partnership (TPP) negotiations this week was the culmination of the federal government’s determination to be part of a market spanning 658 million people. The TPP is just the latest in an impressive list of Canadian trade negotiations underway with partners around the world, including negotiations with exciting and rapidly growing trading partners such as India and China.  

But with all the attention given to emerging economies, it is sometimes easy to forget our existing trade relationships. Of all these negotiations, the most exciting remains the one right around the corner: the Comprehensive Economic and Trade Agreement (CETA) with the European Union. By all accounts, both sides are committed to concluding negotiations this year, and only a handful of substantive issues remain to be completed, including life sciences intellectual property (IP) rights.  

The EU is already Canada’s second largest market and remains the largest single market in the world. Its 27 Member States have nearly half a billion consumers, many of whom enjoy elevated standards of living. The federal government has estimated that CETA could boost Canada’s GDP by $12 billion annually and increase bilateral trade between Canada and the EU by 20 percent. That’s equivalent to creating almost 80,000 new jobs here at home. The opportunities for innovative Canadian companies to make inroads into Europe as a result of CETA are inspiring.  

In Canada, the successful conclusion of CETA could bring with it a winning formula for innovation and jobs in Ontario. As the President and Chair of Life Sciences Ontario, I know firsthand that Ontario is a major North American hub for health sciences employing more than 38,000 Ontarians at more than 1,100 companies. The sector generates more than $9 billion in revenues each and every year. Life sciences companies include innovators ranging from drug manufacturers to biotech companies to front-line researchers making cutting-edge discoveries that save lives. The international character of our life sciences industry is evident from the many European companies that have their Canadian headquarters or other major facilities here in Ontario, including Hoffmann-LaRoche, EMD, LEO Pharma, Sanofi Pasteur, GlaxoSmithKline, Bayer, AstraZeneca, and Boehringer Ingelheim.  

The health economy is the source of considerable economic value for Canadians and drives investment in Ontario and across the country. But Canada’s life sciences IP framework is outdated. We are falling behind our global competitors.  Despite having some of the best innovators and universities in the world, we risk losing our ability to attract investment and our capacity to innovate if we do not act quickly.  

Part of our negotiations with the EU is the push to harmonize our life sciences IP regime. Each of the requirements – an appeal right for firms under our patent regulations, patent term restoration to help offset lengthy government regulatory procedures, and the alignment of clinical trial data protection rules – make sense and would help elevate Canada to the level of our major trading partners and competitors, such as the EU, the United States and Japan.   

Regrettably, these IP issues have been portrayed by some as EU demands that must be resisted in the negotiations because they are contrary to the interests of Canada and Ontario. This perspective is both wrong and short-sighted given the type of knowledge-based economic growth that we so desperately need. If our life sciences sector is to survive and grow, we need competitive market conditions. The bottom line is, CETA represents an opportunity to make some changes that are in our best interest; actions that will create jobs, spur economic growth and contribute to the creation life-saving medicines and vaccines. In a challenging economic environment, CETA represents an extraordinary opportunity for the life sciences sector both in Ontario and across Canada, and its successful completion deserves our wholehearted support.  

Paul Lucas
President & Chair
Life Sciences Ontario

CROWDFUNDING CONCEPT PAPER RELEASED IN ONTARIO  

Crowdfunding is an increasingly common term for raising small amounts of money from a large number of people or a ‘crowd’ in order to finance a product, business or project.   Crowdfunding can take many forms.  Donation-based and product pre-order campaigns are two examples.

Currently, crowdfunding in exchange for shares or other securities is not permitted under Ontario securities laws.  Generally, a company cannot issue securities to residents of Ontario unless it complies with applicable prospectus requirements or is exempt from them. The Ontario Securities Commission released a paper that introduced a concept prospectus exemption which would permit ‘crowdfunding’ subject to certain conditions including, among other things:  

  • the issuer cannot raise more than $1.5 million under the exemption in a year;  
  • trades must be made through a funding portal that is appropriately registered;  
  • only certain eligible securities could be issued;  
  • the issuer cannot advertise an investment except through a funding portal or on the issuer’s website but may use social media to direct investors to either;  
  • an investor cannot invest more than $2,500 in a single investment and not more than $10,000 in total under this exemption in any calendar year;  
  • each investor must receive an information statement at the time of purchase along with one year of financial statements (which must be audited if, among other things, the proceeds of distribution are proposed to be greater than $500,000); and  
  • each investor must sign a prescribed risk acknowledgement.  


The concept paper and the comments provided to the OSC from the community can be found here: http://www.osc.gov.on.ca/en/SecuritiesLaw_45-710.htm.  This is only at the conceptual stage.   The OSC has made it clear that no decision has been made as to whether additional capital raising exemptions are warranted and, if so, whether they should be adopted and on what terms.   

If the concept proposal does become law, entrepreneurs in the life sciences industry will benefit from this additional avenue for raising much needed capital at early stages of their businesses.  

Tracy Hooey
Partner
Fasken Martineau DuMoulin LLP