Also involved in the Osteoporosis Experiments in Orbit project were the Canadian Space Agency, Millenium Biologix Inc. of Kingston, Ontario, the University of Toronto and University of British Columbia, Mount Sinai Hospital of Toronto, and the Osteoporosis Society of Canada.

This is a collection of organizations typical of the synergy at work in the Canadian biotechnology community.

To paraphrase the Ernst & Young study of the industry, the project is proof that the Canadian biotech industry has truly "come of age."

This same study found that three Canadian cities -- Montreal, Toronto and Vancouver -- are among the top 20 cities in North America in terms of biotech revenue.

The Canadian biotech industry is comprised of approximately 500 companies representing close to $2 billion in revenues.

An early start
The Canadian government identified biotechnology as a strategically important sector as early as 1981.

Since then, through the National Research Council, it has established the Plant Biotechnology Institute in Saskatoon, Saskatchewan, which was instrumental in the development of Innovation Place, a research park centered around the Universityof Saskatchewan.

In addition, the Biotechnology Research Institute in Montreal was created to carry out molecular biology and biochemical engineering research.

The government also lends its support to industry-driven research in the form of licensing agreements, service contracts or long-term strategic alliances.

Networks of Centers of Excellence were also created, linking top academic and industry researchers in the fields of bacterial diseases, genetic diseases, neuroscience, protein engineering and respiratory health.

Accordingly, Canada has seen a number of firsts, with the discovery of the genes of Duchenne Muscular Dystrophy, Cystic Fibrosis and early-onset Alzheimer's. Canada has also seen the development of FDA-approved drugs such as 3TC, developed by BioChem Pharma of Laval, Quebec, used in the fight against AIDS.

Also resulting from Canada's early involvement in biotechnology are advances in genetically engineered crops such as canola, corn, cotton and potato. Canada is developing an expertise in agbiotech andenvironmental biotechnologies, as well as in life sciences.

From research to manufacturing
Major companies in the biotech sector have set up shop in Canada to benefit from the many advantages the country affords the sector. Others are partnering with Canadian enterprises to develop drugs and treatment.

Amgen, of Thousand Oaks, Calif., is investing $100 million over 10 years to create the Amgen Institute for molecular research in immunology in Toronto.

Pasteur Merieux Connaught is also investing $350 million to fund a new cancer vaccine research center in Toronto, while Chiron of Emeryville, Calif., is partnering with Biomira of Edmonton, Alberta, to develop the Theratope cancer vaccine.

Other names, such as Quintiles, Covance, Methylgene, Conjuchem and RT Pharma have been attracted to Montreal.

Projects can be taken from basic research to biomanufacturing thanks to the facilities of the Biotechnology Research Institute and those of Dutch biotech DSM Biologics (formerly Gist-brocades/Bio-Intermediair), manufacturers of biopharmaceutical materials used in clinical trials.

Solid advantages
When it comes to biotechnology, Canada has a number of aces up its sleeve.

For one, it can count on a strong research sector supported by the Medical Research Council of Canada, the National Research Council and Networks of Centers of Excellence, which have resulted in 33 new companies since 1994.

Canada's university medical faculty members are affiliated with a network of over 100 teaching hospitals and research institutes.

The University of Toronto has the largest medical faculty in North America, with some 9,000 students. It is affiliated with 13 teaching hospitals including the Hospital for Sick Children, the Ontario Cancer Institute/Princess Margaret Hospital, the Banting and Best Diabetes Center and the Samuel Lunenfeld Research Institute of Mount Sinai Hospital.

The faculties of medicine of McGill and the University of Montreal have been ranked eighth and 25th out of 120 medical faculties in the world. The city graduates some 5,000 health science students every year.

The strong presence of multinational pharmaceutical companies has fueled the growth of contract research organizations, since the cost of conducting clinical trials in Canada compares advantageously with costs in the United States and Europe.

Between 1988 and 1995, over $3.1 billion has been invested in R&D by the pharmaceutical industry that employs some 22,000 Canadians.

Big names such as Glaxo Wellcome, Bristol-Myers Squibb, Merck Frosst, Novartis, Pfizer, Wyeth-Ayerst and Eli Lilly all have major research and/or production facilities in Canada.

Research incentives
Canada's R&D tax credit system, considered the most advantageous in the industrialized world, is often a deciding factor for companies that locate in Canada.

In 1994, the Conference Board of Canada estimated that the net cost of doing $1 worth of research in Canada was 60 cents, compared to 90 cents in the United States, $1.05 in Japan and $1.10 in Germany.

Incentives include immediate write-off of current and capital R&D expenditures, and federal investment tax credits on current and capital expenditures of 20 percent on both incremental and non-incremental R&D expenditures.

Canadian R&D tax credits compare favorably to the United States. Companies have the option to defer their claim, and the total cost of contracted R&D is eligible, as well as equipment and travel costs and research funded by non-residents. Claimants also have the option to use proxy amounts instead of overhead.

Ontario, Quebec, Nova Scotia, Manitoba and New Brunswick sweeten the pot by offering further incentives of their own.

The cost of doing business in Canadian cities compares favorably to major centers around the world.

Available financing
In some cases, readily available financing attracts new biotech ventures to Canada.

Witness the case of Philadelphia's AnorMed, a spinoff of British-based Johnson Mathey. The company now calls Langley, British Columbia, home thanks to financing from MDS Health Ventures, Royal Bank Capital, Ventures West and the Working Opportunity Fund.

These elaborate financial incentives are typical of the industry.

Canadian venture capital investments in life sciences have increased five fold between 1993 and 1996 to stand at $280 million.

In this respect, Quebec has an edge, with 48 percent of the venture capital available in Canada concentrated in the province, representing $4 billion. State-owned investment firms and venture capital firms have funded around 30 projects in the biotech industry in recent years.

Rising star to the east
With Montreal, Toronto and Vancouver well established within the North American biotech industry, the new star of Canadian biotech might well be Nova Scotia.

Companies in the province can count on government support, a strong research sector and what is considered a "can do" attitude.

This year, Nova Scotia launched a three-year initiative called the Life Sciences Industries Partnership that aims to make the province a leading center in the biotechnology, medical devices and information technology sectors by doubling the size of these industries over the next three years.

InNOVAcorp, a provincial crown corporation that provides services to start-up companies, will manage the partnership.

The province has also specialized in agbiotech with the creation of Agritech Park in Truro, near the Nova Scotia Agricultural College.

Nova Scotia already boasts a number of successes, such as MedMira's two minute HIV test kit that can detect HIV infection within two to four weeks of exposure.

Another success includes NovaChem's research into chitosan, a derivative of chitin found in the shells of crustaceans, which has lead to the signing of an agreement with Neogenics Inc. of Cedar Knolls, N.J.

Nova Scotia has yet another bird in the hand: a 1997 Ernst & Young study calculated that the after-tax cost of $100 of R&D in Nova Scotia came out to a mere $32.93, a welcome advantage in a costly business.