Canada’s Sir Michael Houghton Urges Shift to Boost Biotech Investment

Canada’s capacity for life sciences research is significant, but translating that research into commercial products remains a challenge. During a discussion with Chris Hogg, CEO and Executive Editor of Digital Journal, Nobel Laureate Sir Michael Houghton highlighted the urgent need for a shift in the venture capital mindset to address the gaps in early-stage funding at the kickoff of Life Sciences Week in Edmonton.

The event examined Alberta’s progress in developing a globally competitive life sciences sector. Despite Canada’s strong foundation in basic scientific research, Houghton pointed out that the nation struggles to advance these discoveries toward commercialization. He identified a critical barrier known as the “Valley of Death,” which refers to the transitional phase between initial research breakthroughs and their development into market-ready products. This phase is fraught with high risks and requires substantial infrastructure, capital, and regulatory expertise, which are often lacking in Canada.

Houghton stated, “Canada has strong science at the basic level. But the ability to develop those inventions into products really has not been in Canada, traditionally.” He noted that the withdrawal of pharmaceutical companies from the Canadian landscape has diminished pathways for translating scientific discoveries into commercially viable products. Consequently, many researchers often seek opportunities in the United States and Western Europe, leading to a loss of Canadian intellectual property and economic value.

Investment Culture Hinders Growth

Houghton attributed part of the reluctance to invest in the biotech sector to Canada’s investment culture. While the country excels in resource-based industries like oil and gas, there is a notable scarcity of private capital directed toward high-risk biotech initiatives. “One of the strengths of Canada is its oil and gas industries,” he explained. “But investors see that as a safe bet, leading to hesitation in funding biotech ventures.”

This cautious approach has broader implications for the Canadian economy. Houghton emphasized that successful investments in biotech have the potential to yield substantial returns, not only for investors but also for national economies. “We need to boost venture capital in Alberta and across Canada. It’s what’s lacking,” he asserted.

Building Infrastructure for Success

To bridge the funding gap, Houghton advocates for the enhancement of infrastructure that supports early-stage development. As the Chief Scientific Officer of Applied Pharmaceutical Innovation (API), he believes his organization plays a crucial role in creating conditions that make biotech investment more attractive. API is focused on assembling a team of expert drug developers who can advance clinical candidates into Phase I and II trials, while also establishing large-scale manufacturing capabilities in Edmonton.

Houghton highlighted API’s collaboration with researchers from the University of Alberta and the University of British Columbia on a potential RNA vaccine for hepatitis C. This project aims to develop safer next-generation lipids that enhance the delivery of RNA into the body. “This kind of infrastructure reduces uncertainty and creates clearer pathways to scale,” Houghton noted.

As Canada seeks to maintain its innovation pipeline, he stressed the importance of coordinated systems, including governmental support. While acknowledging the funding from Alberta and federal governments, Houghton urged policymakers to examine successful models such as the U.S. Small Business Innovation Research (SBIR) program, which is designed to assist researchers and small companies through early product development stages. He stated, “Canada needs to be doing more to get its innovators across the Valley of Death. We’re not doing enough.”

The conversation also focused on the potential for a significant success story within Alberta’s biotech sector to transform investor confidence. Houghton expressed optimism that achieving success could catalyze a shift in mindset among investors. “Once we have a big one in Alberta, which I’m very optimistic we can achieve over the next two to three years, I think you’ll find other people diving in to repeat the process,” he said.

Ultimately, the challenge lies in whether Canada will view the gap between discovery and development as a structural limitation or as a solvable challenge. Houghton’s insights underscore the need for a concerted effort to foster an environment conducive to innovation and economic growth in Canada’s life sciences sector.