ProMetic Life Sciences

Canadian Solutions For Global Ills

Building a sturdy base of platform technologies has led to growth and prosperity for ProMetic Life Sciences, a bio-pharmaceutical company headquartered in Montreal, Que. ProMetic’s operations have ranged from research and development to manufacturing and, through numerous partnerships, distribution of therapeutic treatments. Building from technologies developed at Cambridge University in the late 1980s, the company was formed in 1994 when Pierre Laurin, who had been involved with the platform technologies, took on the project full time and formed ProMetic as it is today. Laurin, now chairman of the board, president, and CEO of the company, says that after becoming involved with the technologies early on, he knew he had to become more deeply involved in the project to move it forward, after working for a time as a sort of angel investor.

Building platforms for future growth
From the company’s early days, Laurin says their goal has been to add to the original technology from Cambridge by developing complementary technologies to allow the company to do the work it does today, including building manufacturing capacity.  “Canada is the perfect platform for this. In Canada we can manufacture very complex materials because we have highly skilled personnel,” says Laurin. “It is still an environment that is still way cheaper to operate in than Europe or even the U.S.”

Laurin likens the technologies that ProMetic’s scientists develop to the discovery of a product like Velcro. “What happens is you turn around and you see Velcro on virtually every product, from purses to running shoes to military gear, camping gear,” he says. The core technology of ProMetic, which stands for “protein mimetic,” is always the same thing. The company’s technologies, Laurin explains, mimic an interaction of proteins with another one. In humans, there are a plethora of biological processes that require one protein to recognize another and join with it like a key in a lock. Common examples are insulin fitting in an insulin receptor to do what it has to do or antibodies targeting the rabies virus. “These are all proteins that we have in our system that as soon as they see a foreign substance, it latches on it and destroys it,” Laurin explains. “That’s how we manufacture small ligands, small chemical entities that are designed to go exactly where they need to go to do their job, so either to latch onto something to be able to extract it from blood, latch on it to be able to disable it, or to actually act as a drug itself, if you take it as a pill. It’s a platform that’s extremely wide.”

Part of ProMetic’s improved financial situation from Q3 2007 to Q3 2008 has been attributed to its efficiency as a company. Laurin explained that, for ProMetic, efficiencies come from many things. One way that they have streamlined their operation is by making more of the same thing, because the demand for certain products is finally increasing, so when the volume output goes along with the fact that, the gross margin improves, Laurin says. ProMetic has also been successful in bringing more of their products to commercial status, which means they can focus less on research and more on development. “All this combined—less R more D, more manufacturing of the same products—really has helped and will help this forthcoming quarter, even more so,” Laurin says. “Things will dramatically improve as we move forward and the shareholders will be quite pleased to see that progression.”

When asked about the company’s key achievements that brought it to where it is today, Laurin mentions ProMetic’s in-house therapeutic group developing drugs that can be taken orally and that are far less expensive for treating previously unmet medical needs. In connection to this, Laurin’s says, that increasing drugs’ efficiency, both in terms of their effectiveness and cost, as well as increasing their safety. “So it’s not about fancy technology adding costs to a drug or a healthcare proposal. It’s really the other way around.”

Partnering to survive and thrive
Two other key milestones in the company’s development point to the significant role that partnerships have played in ProMetic’s achievements. Laurin identified two joint ventures with the American Red Cross that really took ProMetic to a new level. “They marked the beginning of an era where we started co-investing in the development of products as opposed to simply licensing the technology and letting the licensee do all the development.” One of these ventures combined ProMetic’s and the American Red Cross’s expertise on blood and plasma to develop a way to remove the risk of transmitting disease through transfusions. The second involved the extraction of valuable therapeutics, such as those used to treat haemophilia, from plasma donations. ProMetic was therefore able to enter two new fields in which it had previously not been involved.

Laurin points out the value of partnerships in rocky economic times: “They make the whole difference in the world.” ProMetic has partners in both the private and public realms, and through the financial security some of those relationships provide, they are getting ready to free themselves from relying on the capital market sometime next year, according to Laurin. “The revenue from our partnerships, the revenue from our products that have been developed in the past, and licensing revenue are bringing us to the point where we are extremely close to profitability.” ProMetic’s key partnerships have made this possible. “If we hadn’t taken that approach, we would be in an extremely vulnerable position right now,” Laurin says.

The Canadian advantage
ProMetic has research and development facilities in Canada, the US, and the UK, manufacturing capabilities in the UK, and undertakes business development in the US, Europe, Asia, and the Middle-East. Being headquartered in Canada, though, gives the company’s profile a boost. “From a business standpoint, Canadian ethics and Canadian culture are extremely well received by both Europeans and Americans,” says Laurin.

Canada’s diversity and even its geographical placement help Canadian businesses act as somewhat of a mediator between US and UK companies, according to Laurin. “We seem to have that duality in our culture—we were born and raised in a geographical area where we’ve learned to understand the American culture, we’ve learned to understand the British, the French, the Italian, the German cultures. It’s a very useful asset.” This carries over to Canada’s place on the world markets. Because we can’t rely entirely on our own domestic market, Canadian businesses have learned to collaborate effectively, and ProMetic is a great example of this. Says Laurin: “Of all the clients that we have, none are in Canada—they’re all American companies, or European companies, or Chinese companies, or Japanese companies… And yet, in Canada, there’s a lot going on in the sector that we’re in.”

ProMetic’s prognosis
Looking ahead, Laurin is confident that ProMetic is well positioned to continue growing. “We owe it to our shareholders to pause here, to say, ‘Let’s preserve the cash that we have, focus on activities that are only generating revenue, grow the group to a point where we’re completely, totally independent from the capital market. We’re quarters away from this,” says Laurin, adding that at that point ProMetic will consider whether or not to reinvest in research.

“From a technology challenge point of view, we’ve made it,” Laurin says. As ProMetic focuses on executing and managing its growth, the company’s management is keeping its eyes on current market conditions. “The challenge, obviously, is to do this in one of the worst financial environments that everyone I know in the age range that I am in have ever seen in their lives—uncharted waters.” Laurin says ProMetic has put itself in a strong position by doing what was necessary to make itself less dependent on capital market financing.
— Meagan Campbell

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