Collaboration with health biotech companies in developing countries represents a major opportunity for companies in developed countries to strengthen their market reach and innovation potential, acording to the results of a new study.
The study by the McLaughlin-Rotman Centre for Global Health (MRC), based at the University Health Network and the University of Toronto, found that one in four Canadian health biotech firms are involved in some form of partnership initiative in developing countries.
These collaborations not only give them access to local market intelligence and distribution networks in the developing world but also enhance their position in an increasingly competitive and global innovation lancscape, the report concludes.
"It is significant that even in the current sustained worldwide economic downturn, the economies of China and India are still growing," says Dr. Halla Thorsteinsdóttir, associate professor at the Dalla Lana School of Public Health at the University of Toronto and the principal investigator on the MRC study. "Establishing ties with companies there may help companies in Canada and other developed world countries to weather the recession."
The study, Globetrotting Firms: a Survey of Canada's Health Biotechnology Collaboration with Developing Countries, is based on a survey sent to Canada's 259 health biotech companies. A total of 181 firms completed the survey – a 70% response rate. The results are published in the latest issue of the journal Nature Biotechnology.
The survey found that 26 percent of the firms that responded work with companies in developing countries (most also collaborate with developed countries). Nearly half (46 percent) only collaborate with partners in other developed countries while 28 per cent had no international collaborations.
The survey logs 82 collaboration initiatives between companies in Canada and developing countries. The strongest linkages are with China (22 initiatives) and India (17), where there have been intensive efforts to build domestic health biotech capacity in recent years.
Countries in Latin America were involved in 21 collaborations followed by sub-Saharan Africa (nine), East Asia and the Pacific (eight) and the Middle East and North Africa (five).
"Our survey indicates that the strong interest by Canadian firms to build partnerships with firms in developing countries is driven by a complex mix of reasons," says Abdallah S. Daar, MRC Director and another of the study's co-authors.
"For some companies, the partnership represents the first step in gaining access to vast markets in emerging economies such as China, Brazil and India with their large populations, increasing spending power and high demand for health biotech products."
"With lower costs of manufacturing, clinical trials and research and development (R&D) in developing countries, partnerships also reduce the cost of the overall drug development process, he adds. Finally, they provide access to the wealth of scientific and technical expertise found within firms and institutions in developing countries."
Joint R&D activities are nearly as common as distribution and other end-stage commercialization arrangements reflecting a significant degree of bi-directional knowledge-intensive collaboration between Canadian firms and their developing country partners, the study team reports.
They cite the joint venture between Mississauga-based YM BioSciences (named among Canada's top 10 life sciences companies two years in a row) and the Cuba's Centre for Molecular Immunology as an example of a strong south to north technology flow. The Canadian company's first in-licensed technology was the cancer drug Nimotuzumab developed and manufactured by researchers at the Cuban institute.
The survey data show that almost all of the collaborations have led to some shared output. The most common is a joint product in the pipeline, although in several instances the partners have a joint product on the market.
The study's authors say that more needs to be done to encourage Canadian firms to pursue these partnership opportunities between with firms in the developing world. Policies in Canada and other developed countries typically give top priority to 'national' visions or partnerships with other developed countries while paying scant attention to the potential of collaborating with developing countries to stimulate domestic innovation capabilities.
"We need to do more to leverage on those opportunities," says MRC researcher and report co-author Monali Ray. "Firms have started to collaborate with developing countries, but developed countries' governments need to realise that the innovation landscape is changing and innovation policies need to take that into account."
Says MRC Director and study co-author Prof. Peter A. Singer: "The emerging economies used to be dismissively labelled 'Rest of World' in pharmaceutical circles and virtually ignored. But the so-called 'Rest of the World' has most of the people, most of the health problems, and most of the economic growth. Those industrialized countries that support their innovative firms to engage with those markets will prosper and gain comparative advantage. The 'Rest of World' is the world. If you are not in Shanghai, Mumbai, or Dubai, watch out."
The McLaughlin-Rotman Centre for Global Health, is based at the University Health Network and the University of Toronto. Working at the nexus of science, entrepreneurship, and the developing world, the Centre conducts translational research on malaria, on ethics and on commercialization in global health to help researchers and companies get life sciences technologies (such as diagnostics, drugs, and vaccines) to those who need them in developing countries. For more information: www.mrcglobal.org.