Transcript - Ontario’s Innovation Agenda: Direct Engagement

Mark Lievonen
President of Sanofi Pasteur Limited

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Thank you.  It’s a pleasure to be here and to be representing a biopharmaceutical industry player and a Canadian-based subsidiary that plays a major role in a global organization.  I would like to commend the government for making innovation such a high priority and also for the fact that the Government of Ontario is taking a long-run view of this, and I think that’s critically important if we’re going to be successful. 

We talked about collaboration as a theme and in fact, collaboration is the theme behind the success that we’ve enjoyed.  Sanofi Pasteur got its start here in Canada in 1914 as Connaught Laboratories, part of the University of Toronto and the School of Hygiene.  Over the years, we’ve had a large number of successes when Banting and Best discovered insulin; it was first commercialized by the Connaught Medical Research Laboratories.  When Dr. Jonas Salk invented his injectable polio vaccine, the Connaught Laboratories played a key role in both developing and manufacturing and commercializing that vaccine.  Small pox is the only disease that we have eradicated from the face of the earth and Connaught was one of the four laboratories that produced product to carry out that eradication in the 70’s.  And more recently we’ve continued to innovate.  We have discovered, developed and now manufacture the world’s leading acellular pertussis or whopping cough vaccine.  It’s the gold standard.  It’s combined with other antigens and we are now manufacturing that vaccine and exporting it not just in Canada, but in 50 countries around the world including the United States, and it truly will be a blockbuster product.  We expect that we will generate in excess of half a billion dollars of revenues coming back into this economy through transfer pricing and sales of this global product.  So it’s truly a blockbuster vaccine that has been discovered, developed, and continues our growth and beyond that we now have moved into cancer vaccines.  It’s a long battle.  It’s taken us ten years to get to where we are.  Several hundred million dollars, a number of attempts at it, but I’m pleased to say that the first patient in our new phase I, phase II clinical trials for melanoma vaccine, a leading melanoma vaccine, happened this week, and so we have multi-site clinical trials on the way and hope that someday that will yield some results as well.  In fact, we’re spending $100 million a year on operating expenses in R&D with 300 people at our Connaught campus.

One of the things I think that’s very important and people have talked about commercialization, and I think it’s all about ideas that are generated here – stay here.  Ideally we’d like to see the discoveries stay here and manufactured and exported, and it’s a very difficult problem; a lot of people spent time on it – I’ve spent time on it.  Its multi-faceted, there’s different levels, there’s different issues, whether it’s venture capital or other things.  One perspective I would like to offer today is around the fact that discovery is extremely important – discovery research.  We need to continue that.  We need to continue funding there.  Governments need to continue to fund that.  There are a lot of programs in that area.  I’m encouraged by that and agree with that and I think, one of the things that we have to realize though, once we do that discovery research and we think about commercialization, I would submit that going from discovery to commercialization after the discovery is made requires about 90% of the cost, the time, the effort, the investment and so when we think about commercialization – it is a long-run proposal.  If we are going to be able to manufacture products in this jurisdiction, then companies are going to want to be able to look at things like predictability, and certainty around markets and products and investments.  Having things like a predictable and sustainable intellectual property system and pricing regulation and so on, are important factors, if we are going to be able to drive that and have reasons why people would want to manufacture products in this jurisdiction and in this country.  I really like the idea of the Ontario government and the catalyst because one of the things that the government can do is act as an advocate in areas that are strictly not within their jurisdiction but around things like aspects that can help reinforce some of these policy issues and I think that’s a leading role that can be played there. 

One of the things that I’d like to talk about is our successful Biopharmaceutical Investment Program application.  We were the first company to benefit from that with the Ministries of Research and Innovation, and Economic Development and Trade.  I can tell you and confirm that the government did act at the speed of business – it was very impressive.  We were looking at building a new $100 million research facility here, something that’s difficult to do in this day and age, and this timeframe.  Decisions like that are made globally and there’s various investment alternatives around the world, and we were able to work with the government and land a $13.9 million Biopharmaceutical Investment Program grant from the government that was instrumental in deciding to locate the facility here and it was quite dramatic in terms of the commitments around: speed to review the offer, due diligence, negotiation of the agreement, and we culminated that with the announcement that we had with the Premier, the Minister and some of his other colleagues.  I can tell you the impact that has been heard around the world, not just in the Sanofi Pasteur organization, which is about 11,000 employees for the vaccine division of the Sanofi-Aventis, but also the global Sanofi-Aventis organization of 100,000 employees – about the third largest pharmaceutical company in the world.  So that was very important for us and from that we expect to develop new discoveries, new projects which will lead to further investments along the value chain and we also have concepts about another application, perhaps down the road where we will be able to make a more advanced investment around manufacturing and continue to partner with the Government of Ontario, and that’s certainly in the eyes and ears of our shareholder and our global heads as well.  So it’s been a tremendous run for us and we continue to reinvent and look forward to investing here and to continue to develop, manufacture and export products not just for Canadians but for public health around the world. 

Thank you.