Toronto Region Human Health and Sciences Cluster Action Plan

Transcription

1 Toronto Region Human Health and Sciences Cluster Action Plan CONSULTATION DRAFT

2 Table of Contents TORONTO REGION HHS CLUSTER 8 Size and Importance 11 Location 11 Infrastructure and Resources 12 Profile: Businesses, Services and Support 13 Businesses 13 Research Organizations 14 Government 15 Innovation Acceleration 18 Healthcare Service Providers 19 STRENGTHS AND OPPORTUNITIES IN THE TORONTO REGION 21 Strong Cluster Organization 22 Therapeutic Strengths and Technology Opportunities 23 Therapeutic Areas of Strength 24 Technology Opportunities 27 Challenges and Threats 31 Branding and Marketing 31 Lack of Risk Capital 31 Lack of Corporate Involvement 32 Managerial Talent 32 Procurement: Gaining Access to the Local Market 32 ACTION PLANS AND OUTCOMES 34 Cluster Action Plan Summary 35 Objectives 36 Tactic Prioritization Process 38 Prioritized Tactics and Deliverables 39 THE PATH FORWARD 50 i

3 Table of Contents cont d ENDNOTES 52 APPENDICES 53 APPENDIX #1: Tactics for Prioritization (Roundtable Pre-Read) 53 APPENDIX #2: Bibliography for Roundtable Pre-Read 60 APPENDIX #3: Roundtable Discussion Summary 61 APPENDIX #4: Cluster Action Plan Top 15 Recommendations for Prioritization 69 APPENDIX #5: Roundtable Attendees 73 APPENDIX #6: TO Health! Follow Up Survey Results 75 CONTACT 83 ii

4 LETTER TO MINISTER DUGUID ON BEHALF OF THE TORONTO REGION HUMAN HEALTH AND SCIENCES (HHS) CLUSTER Dear Minister Duguid, The Toronto region s Human Health and Sciences (HHS) cluster is home to an incredible concentration of people, ideas and investment. On behalf of the HHS cluster and its leaders from the worlds of research, finance, industry, medicine and technology, TO Health! is proud to share with you a Cluster Plan designed to leverage these assets into a long-term, sustainable strategic advantage for the Province of Ontario. This is the first Cluster Plan written and submitted under the Partnership for Jobs and Growth Act passed in The stakeholders within the cluster have organically aligned and collaborated to design this planning document and we are united in our resolve to move ahead together. The HHS cluster is invigorated to witness three levels of government united in their focus on building upon regional strengths, investing to improve global competitiveness and fostering economic development to create the successful enterprises that ultimately lead to more, better-paying jobs. The Federal Growth Council has recommended and inspired the creation of a new economic development office focused on promotion of Canada internationally, in order to better engage and attract global investors and partners. Provincially, Ontario has just created the new Office of the Chief Health Innovation Strategist, a bold move which highlights the province s foresight and intent to improve care and outcomes for Ontarians while driving economic growth for the province through healthcare investment. Meanwhile, the momentum of the Toronto region s HHS cluster is being accelerated by recent investments from large multinational private organizations like Bayer and Versant Ventures (to create BlueRock Therapeutics, a stem cell company), Johnson & Johnson (to create the first JLABS outside the US), Celgene (to invest in Blueline Biosciences and multiple other growing biotech companies) and General Electric (to invest in the Toronto region s Regenerative Medicine development and manufacturing sector). With government and industry increasingly coordinating and collaborating, the time is ripe for a Cluster Action Plan that captures months of thinking and planning by a wide range of leaders 1

5 across the cluster. To prepare the Plan, TOHealth! organized and convened working groups, collected and summarized the insights and ideas of dozens of groups and individuals, and then organized and convened roundtables that brought together more than 60 sector leaders to refine and enhance our common understanding of the key opportunities facing the sector and to begin prioritizing a core set of recommendations that are laid out in the pages to come. We want to thank you for your support and are looking forward to your response to the Plan to better understanding how the initiatives and tactics laid out in this document can complement and reinforce the leadership already being shown by the Government of Ontario to support the Toronto region s HHS cluster. We re proud to share this plan on behalf of the cluster and look forward to working with you and your ministry to create and foster a clear advantage for Ontario. Sincerely, Ella Korets-Smith Executive Director, TO Health! 2

6 Executive Summary The Toronto region Human Health and Sciences (HHS) cluster is one of Canada s most high impact and high potential economic superclusters. The HHS cluster includes all of the institutions and organizations that touch the development and delivery of healthcare, from medical technology and biopharmaceuticals, to health-focused venture capital funds, to hospitals and university R&D centres. The HHS ecosystem is defined by a convergence of key stakeholders from academia, industry and government, what some theorists have called the triple helix 1 required to create and expand a successful cluster. The HHS cluster has the largest concentration of health sciences employment and companies in Canada, as well as a century-long track record of outstanding research innovations. We have undeniable momentum and believe we can grow the economy of the region and improve patient outcomes. Figure 1: Toronto region Human Health and Sciences Cluster Map Toronto region s HHS cluster is central to the Life Sciences ecosystem in Ontario. The Life Sciences sector contributes $3.9 billion to the GDP of the province, with exports of $8.6 billion. 2 With nearly 50% of Ontario s population and a representative percentage of the $5.9 billion healthcare spend, Toronto region is the largest healthcare market in 3

7 Canada. It also has the largest concentration of research institutions, attracting the lion s share of Ontario s $7B spend on R&D. Toronto region is home to over 50+ head offices of multinational companies, homegrown businesses and start ups. Overall the region contributes over 10% of Canada s total GDP output. Figure 2: HHS cluster Strengths and Opportunities Our cluster s strength stems from our deep expertise in three therapeutic areas: Oncology, Neurological Diseases and Cardiovascular Diseases and Diabetes. These areas of strength allow us to start identifying and leveraging opportunities to increase our competitiveness through research, development and commercialization of technologies to better serve our patients and increase wealth and prosperity in the region. These technology areas of opportunity - including Regenerative Medicine, Genomics, Imaging/Medical Devices and Data/Analytics - have been identified based on the institutions, assets and resources already present in the region upon which we can build. Investment from multinational enterprises in the cluster is starting to gain momentum. Corporations such as Bayer, Johnson & Johnson, Celgene, GE Healthcare and IBM are establishing major facilities and placing investments in the GTA, many times with support or financial assistance of at least one level of government. A global venture fund, Versant Ventures, has made five major investments in the region over the past three years, including the most recent investment of $225M USD into a new regenerative medicine company using technology from Toronto s UHN and the McEwan Center for Regenerative Medicine. We expect to build on this momentum to create even more centres of excellence, and with them, jobs. Our vision is to elevate the Toronto region HHS cluster to Top 5 global status within 10 years. TO Health! has been formed with a mandate to build a community of stakeholders working in concert to first and foremost stimulate economic growth of the cluster. With a diverse population, a pool of highly-skilled, well-educated people and an engaged group of leaders willing to influence action on priorities, we are in an enviable position to build from strength. 4

8 This document, called the HHS Cluster Action Plan, represents the framework and roadmap to achieving our objectives. The plan is an industry-focused, multi-stakeholder effort, which includes ideas and inputs from past learnings and summarizes required contribution from business leaders, government, and academic institutions. Its ideas have been shaped and supported by foundational work from Influential organizations including Life Sciences Ontario (LSO), Ontario Biotechnology Innovation Organization (OBIO), Ontario Chamber of Commerce (OCC), Toronto Region Board of Trade (TRBOT), MaRS, CIty of Mississauga and others collaborators whose consultation and policy development efforts have laid the groundwork for this plan. In creating this document, cluster leaders came together at the working sessions held by TO Health! in October 2016 to align, refine and prioritize actions we need to take together to improve the competitiveness of the Toronto region. Participants included business leaders, policymakers, scientists, investors and entrepreneurs whose ideas, insights and energy went into the roundtables and who will continue to play essential roles in the creation and implementation of this plan. (See Appendices for the full list of participants and detailed session notes). Following the roundtables, TOHealth! narrowed a longer list of potential actions and tactics into a prioritized set of eight key recommendations that are collectively intended to help Toronto s HHS cluster raise its profile both at home and abroad, expand access to risk capital, attract and expand the local footprint of multinational enterprises and attract experienced entrepreneurs to (or back to) the region: 5

9 CLUSTER ACTION PLAN SUMMARY 4 OBJECTIVES Raise the Profile of the Cluster both Internally and Externally Expand the Pool of Specialized Risk Capital Anchor Cluster with Infrastructure and Corporate Global Mandates Attract, Develop and Retain C-Level Talent 8 TACTICS A detailed, interactive cluster inventory that includes a functional listing of organizations, programs and resources in the cluster. An ongoing stream of high profile health-related conferences in the Toronto region, including existing major conferences and new programming. A Health Science focused stewardship program, facilitating inbound and outbound international engagement, hosting global delegations and showcasing the cluster. A government-catalyzed, industry matched and administered venture fund specifically focused on Health Sciences. Resources and streamlined application processes to help local outposts of leading MNEs secure a new wave of investments, partnerships and alliances that align with HHS cluster strengths. Program further leveraging and optimizing public sector procurement to accelerate the absorption of innovation into the healthcare system. A plan that prepares the Toronto region to utilize healthcare data to drive better health outcomes and greater economic benefits. A targeted program that helps scaling companies access C-level executives with specialized skills. 8 SHORT TERM OUTCOMES An ability of stakeholders within the cluster to tell the Toronto HHS cluster story both internally and externally. A measured increase in the amount of collaboration between stakeholders within the HHS cluster. Additional sales resources for the Toronto region, including a complete listing of Global partnerships already in place here. A more complete understanding of the risk capital landscape for Health Sciences in the Toronto region. An identified lead and strategic work plan that identifies shorter term and longer term opportunities and a process to connect these to JPF funds. An expanded and deepened commitment to attracting and embedding novel significant technological interventions for delivering better outcomes to patients. A more detailed understanding of opportunities to use health data to improve patient outcomes as well as anchor growing healthcare data firms. An understanding of required skills sets HHS companies need to grow and scale and where to find these kinds of skills. 5 LONG TERM OUTCOMES A measurable increase in the number of midsize, scaling healthcare companies (100+ people employed) One major healthcare company anchored in the region Half of the global multinational healthcare MNEs located within the region will have a focus on partnerships and innovation. An investment of private capital from a broader range of partners than currently do not invest in Health Sciences or not in Ontario. A core group of world class, talented and experienced C-level executives working with companies in the region. 6

10 Moving forward, TOHealth! and its cluster partners will be focused on three core mandates: 1. Launching a Core Set of immediate Projects At least three of the recommendations captured above are ready for immediate action with work on some already well underway: developing an Integrated cluster Inventory; hosting world-class conferences; and creating a dedicated program to expand global HHS connections. TOHealth! and its partners will focus on accelerating the momentum behind these ideas and ensuring they have the resources and support required to successfully launch. 2. Refining and Enhancing Longer-term Projects From a Health Technology Integration Program to HHS Data Access and Integration to creating a HHS Venture Fund, a number of the recommendations in this plan have been deliberately selected to catalyze debate and discussion and generate opportunities for additional research and refinement. TOHealth! and its partners will work diligently to develop detailed implementation plans for those more nascent recommendations. 3. Engaging with Key Strategic and Funding Partners Working through both its HHS Committee and the broad group of cluster leaders whose insights are captured in the pages above, TOHealth! will communicate the Cluster Action Plan to public and private sector leaders across the region. Particular emphasis will be placed on engaging with a broader set of ministries across the Government of Ontario beyond MEDG, and working closely with both FedDev and Innovation Science and Economic Development Canada as well as leading municipal government allies and advocates from across the region. The Toronto region is already home to an HHS Supercluster, defined by exceptional researchers, world-class innovation institutions and an impressive array of early stage and global companies. All stakeholders including government at all levels must (continue to) recognize this cluster s magnitude and potential. The initiatives and ideas contained in this plan are intended to build on that exceptional foundation to help the cluster achieve its goal of becoming top 5 in 10 years. 7

11 Toronto Region HHS Cluster 8

12 Toronto Region HHS Cluster The Toronto region Human Health and Sciences (HHS) cluster is without doubt Canada s most high-impact and high potential economic superclusters. The definition of HHS is similar to but distinct from that of Life Sciences because it includes the entire continuum of institutions and organizations which touch the development and delivery of healthcare, and centers on the patient. The Toronto region has the concentration of assets and the convergence of key stakeholders representing academia, industry and government, the triple helix required for a successful cluster. This definition gives rise to an aligned vision with a focus on drivers of inclusive growth, impacting patient outcomes, future healthcare delivery and wealth creation. The HHS cluster is spread across the Toronto region, which covers 29 municipalities including the City of Toronto, City of Brampton, City of Mississauga, City of Markham, and the neighbouring City of Hamilton. The Toronto region is the 4th largest metropolitan area in North America after Mexico City, New York City, and Los Angeles. 3 It is also home to some of Canada s largest clusters, including those in business services, financial services, automotive, and processed food. This provides a strong manufacturing base and a foundation of business services for the HHS cluster to emerge and grow. Toronto is the largest city in Canada and the Greater Toronto Area (GTA) represents about two-thirds of the population and economy of the province of Ontario. Ontario s Life Sciences sector -- most of which resides in the GTA -- ranks second in North American state/provincial ranking by number of companies and third in number of employees. 4 Within Canada, the Toronto region has the largest geographic concentration of Health Science assets, which are approximated to be half of the national volume. Defined as Human Health and Sciences, the cluster is comprised of a range of stakeholders from the entire value chain of health research, training, acceleration, commercialization, provision and funding, all directed at developing and delivering healthcare to patients. Beyond the traditional definition of clusters provided by Michael Porter 5, Toronto region s HHS cluster encompases a wealth of organizations that create an interactive ecosystem capable of attracting investment and talent for the sake of fostering ongoing financial success. 9

13 TORONTO REGION HHS CLUSTER MAP 10

14 SIZE AND IMPORTANCE The HHS cluster in the GTA is comprised of a growing core of over 1000 home-grown companies, most of which are startups. In Health Science companies, not including providers, the total direct employment is 38,000 full-time head equivalent with tens of thousands more distributed beyond the Toronto area. The Ontario Life Science sector contributes $3.9 billion to Ontario s total GDP 6 which stands at $740 billion. It represents the 4th largest provincial sector and does not consider revenue generated by foreign-owned multinational corporations doing business with the cluster, generating another $20B in revenue. 7 This revenue is supported by an annual investment of over $1.2 billion in research and development, funded both by internal means as well as investment from VCs and the private sector. Because wages in the sector exceed provincial averages by 25%, the personal income tax generated for the provincial government represents nearly 10% of the annual total. 8 Employment growth in the sector continues in tandem with growth in revenue, exceeding a 10% average over the past five years. This makes the sector one of mounting importance, and one able to withstand global economic downturns such as the one in the wake of events in LOCATION The Greater Toronto Area is in an optimal location for reasons that are both logistical and economic. Toronto is a financial and commercial hub that rivals all North American cities except New York, with access to a population of over 130 million in under 90 minutes of flying time. It has two airports located in both urban and suburban locations that offer over a thousand daily flights combined which include non-stop and same-plane service to 200 global destinations among 55 countries. Within Canada, it is at the center of the Quebec City-Windsor commercial corridor that stretches 1,100 km and contains 50% of the entire population of Canada. A business operating out of Canada will have access to an extensive range of friendly trade agreements that facilitate access to global markets. The comprehensive North American Free Trade Agreement and Economic Trade Agreement with the EU complement individual trade agreements with southeast Asian countries to make Canada a sensible jumping off point to service global markets. 11

15 INFRASTRUCTURE AND RESOURCES The Toronto region possesses a wealth of assets that take the form of intellectual capital, economic resources and general infrastructure to service and support the cluster. With eight major universities and colleges in the immediate area, member companies have an established breeding grounds for research, business development and graduating talent. More than 11,000 principal researchers and technicians operate out of 37 research institutes and 9 teaching hospitals along with Canada s largest educational facility (by full time enrollment), the University of Toronto. More broadly, the Toronto region has access to approximately 9,500 Life Sciences students who graduate to the province annually, with a similar additional number graduating in health-related sectors which include mathematics, engineering and other sciences. Toronto possesses Canada s greatest concentration of research institutes and facilities and this continues to intensify. The University of Toronto is now joined by York University, which in 2011 opened a 160,000 sq. ft. LIfe Sciences Centre, and Ryerson University with innovative programs such as the Biomedical zone which puts entrepreneurs directly in contact with clinicians to focus on needs-based innovation. Companies operating locally see Toronto as well-positioned among its competitors for the cost of doing business. Wages compare favorably in a global setting and the cost of regular benefits including standard supplemental health care are benchmarked to be less than $10,000 per year per full time employee because of the centralized, single payer system. Base Canadian corporate taxation is preferable to European Markets in particular at 28% (after Federal tax abatement), dropping to 11% for private Canadian-controlled corporations and startups. When the definition of taxation is broadened to include not only corporate tax but other forms of income, capital gains and sales among others, the Total Tax Index as defined by the Toronto Board of Trade places the Toronto region at about half the average city and a third of major European centers such as Paris. Given the mounting political and economic instability seen over the last decade, Canada and two of its largest centers -- Toronto and Vancouver -- have become havens for safe investment. The byproduct of this reputation has been surging population and soaring real estate prices in these locations. Despite this challenge along with real estate prices, Toronto consistently ranks as a top five global city to live and work in an annual study of 30 major global centers by PricewaterhouseCoopers, citing strength in amenities, security, approach to health,entertainment, sustainability, intellectual capital, and innovation among other factors. The GTA provides an attractive and stable economic and social landscape to found or locate companies and attract employees. With over 8 million people and climbing, the Toronto region is the only growing metropolitan region in North America, welcoming about 100,000 new residents each year. 12

16 PROFILE: BUSINESSES, SERVICES AND SUPPORT BUSINESSES Over 800 businesses -- including homegrown startups -- are currently operating in the HHS cluster in the Toronto region. 9 Their commercial activities are diverse and comprise (but are not limited to) the fields of biopharmaceutical products, biological products, digital technology, surgical instruments and suppliers, medical equipment, imaging products, dental instruments and suppliers, ophthalmic goods, diagnostic substances, manufacturing and clinical trials services. Toronto region is home to the Canadian headquarters of 50+ multinational, world-leading companies, such as GlaxoSmithKline, Astra Zeneca, Medtronic, Janssen, Pfizer, Baxter, Merck, Eli Lilly, and Sanofi Pasteur. These anchor firms have contributed significant economic and social value to the Toronto region. Small and medium-sized enterprises, such as Synaptive Medical, Think Research, Medipattern, Highland Therapeutics, Trillium Therapeutics, Profound Medical, and Baylis Medical are respected companies forming the next profile tier of organizations. The composition of the cluster is evolving past its roots in research and manufactured goods. Service based companies are now proliferating which include the more tech-focused Digital Health sector. In the last decade, companies innovating in the delivery of medical services and linking companion services together have been founded or expanded into Canada. Beyond digital health service companies, the region is becoming a center for Medtech companies that focus on informatics, health restoration, extending life, advanced imaging and global connectivity and support. This area is an emerging strength for the Toronto region, creating opportunities outlined in the next section. Toronto HHS commercial entities are supported in part by a wealth of organizations and companies involved in the everyday workflow that allows these business to thrive. These include everything from real estate agencies like Cushman-Wakefield who provide lab and manufacturing space, law firms like Tory s involved in IP law, trade and export association such as Toronto region and Brampton Boards of trade who assist in business development and exporting the products made in Ontario. Research services organizations play an important role in the cluster as well, for example GMP Chemical manufacturers like ACD Labs support the research and development that drives the cluster. Toronto is also Canadian home of many management consulting service providers, such as KPMG which provides management consulting experience and analytics driven benchmarking of the cluster. Non-profit organizations play a critical role as well, where industry organizations such as Life Sciences Ontario, Ontario Bioscience Innovation Organization (OBIO) and Innovative Medicines Canada advocate industry policy and provide essential programs for the development of the cluster. Additionally, Clinical Trials Ontario provides an essential role in attracting clinical trials to the region and ensuring world class research. Financial services and investment is a major strength of the Toronto region and several investment firms play critical roles in the development and growth of HHS companies; such service companies include Exelerate Capital, Epic 13

17 Capital, and Lumira Capital. The Toronto region also has a healthy angel investor community that aids startups and often provides essential seed funding, giving life to innovative ideas. Impact Angel Alliance and National Angel Capital Organization (NACO) play key roles in this ecosystem. Given the importance of venture capital in the development of innovative HHS products the importance of active investors in the sector cannot be understated. RESEARCH ORGANIZATIONS The list of research organizations begins with the Universities. The University of Toronto and its nine fully-affiliated hospitals bring together one of the largest communities of health researchers in the world. More than 1,600 principal investigators in 26 academic departments conducted $974 million in research in Twenty-six separate institutes direct research and trial across all major segments of healthcare including Pediatrics, Immunology, Molecular Genetics, Pharmacology, Psychiatry and Oncology. The results of its work receive widespread international exposure; U of T is consistently ranked in the top one percent of global publicly-funded universities for research citations. 11 In addition, the Council of Academic Hospitals of Ontario (CAHO) represents Ontario s 24 research hospitals that play a unique and vital role in the province s health care system. CAHO hospitals conduct world-class, globally-recognized research, attracting over $1.4 billion in funding annually, a total that exceeds half of all health research spent by Canadian hospitals and represents 80% of publicly funded health research in Ontario. 12 It also has a stated mandate to identify ways to translate and transfer the knowledge developed by its researchers into the delivery of care to make the health care system more efficient and effective for Ontarians. The council has already translated this mandate into action through its Adopting Research to Improve Care (ARTIC) Program. The Toronto region academic hospitals are also represented by Toronto Academic Health Science Network (TAHSN) which facilitates collaborative academic missions to provide high quality patient care, conduct innovative research, offer world renowned education programs, and participate in knowledge transfer activities. CAHO and TAHSN will as a result continue to be seen as a vital resource and collaborator to commercialize innovation. Other provincial research organizations based in the HHS cluster are often focused on specific disease sites or technology platforms and include groups such as the Structural Genomics Consortium, Ontario Genomics, Ontario Institute for Regenerative Medicine, Ontario Institute for Cancer Research, and Ontario Brain Institute. Most of the research organizations are embedded in, or closely associated with, research hospitals and universities. As discussed later, these organizations are realizing benefit from innovation and commercialization expertise from non-profit entities such as MaRS Innovation and Centre for Commercialization of Regenerative Medicine to foster and accelerate the process of taking intellectual property to market. 14

18 GOVERNMENT All three levels of government play a variety of roles, directly and indirectly impacting the HHS cluster. Municipal governments have committed resources to the development of the HHS cluster in the region through various efforts. Support for cluster building is in large part of the work of economic development groups within these and other municipalities. Regional mayors John Tory, Linda Jeffrey and Bonnie Crombie are active in showcasing the GTA in international trade missions and in media. In addition, the establishment of a regional economic development organization called Toronto Global, brings a regional focus to foreign direct investment attraction. CITY OF TORONTO The City of Toronto lies at the heart of the broad Life Sciences Sector, housing 1,600, or approximately 50% of Canada s life science companies. 13 About half of global multinational companies operating in the sectors of medical devices, pharmaceuticals and overall life sciences have offices in the Toronto region. A founding partner of TO Health!, the city is continuing its efforts to raise the profile of the region in health sciences, bidding for key events such as the BIO convention in CITY OF BRAMPTON Brampton s life sciences sector comprises a diverse range of companies that use cellular and molecular processes to solve problems and make products. Key industries in Brampton s life sciences sector include the agriculture, food and beverage, medical, pharmaceutical and chemical industries. Also a founding partner of TO Health!, the city of Brampton is home to about 6,700 direct sector jobs, 14 mostly with such respected companies as Medtronic, Brampton Civic Hospital, Taro Pharmaceuticals and Gamma-Dynacare Laboratories. CITY OF MISSISSAUGA Over the last 10 years, the number of life sciences companies based in Mississauga has doubled to 380. And, with over 25,000 employees, the city boasts the second most life sciences direct employees in Canada. 15 The sector s momentum there has been fuelled by the appointment of a sector consultant for the city and the attraction of a $4 million investment from the Province of Ontario for a new research facility for Baylis Medical. Baylis, which creates high tech products in the areas of oncology, cardiology and endovascular, is now positioned to create more jobs and raise the profile of the city as one of opportunity and a new destination for research excellence. CITY OF HAMILTON Recognizing that the health service and research sector is the area s largest employer, the Hamilton Chamber of Commerce capped a full year study by publishing a plan for the city to develop the local HHS cluster in a 2014 report. 16 Leveraging two large academic research institutions and a life science workforce of 20,000 scattered among both SMEs and MNEs, Hamilton has since taken steps to strengthen its profile. The city has channelled efforts into creating Synapse, a cluster organization designed to transform and build needed competencies around commercializing innovation. 15

19 TORONTO GLOBAL This is the new regional economic development organization and primary business, sales and marketing corporation for the City of Toronto. Its primary mandate is to attract foreign direct investment by to promoting Toronto s advantages internationally. The Ontario government provides infrastructural support to lend expertise, accelerate innovation and foster greater connectivity with required resources through the following key ministries: MINISTRY OF HEALTH AND LONG-TERM CARE In recent years the focus of the ministry has shifted from exclusively service delivery to stewardship; planning and dedication to delivering value to the healthcare system has become the priority. As the such, through its many departments that oversee service, policy and strategy, we can expect more open consideration of the innovation solutions being offered by Toronto cluster companies. MINISTRY OF ECONOMIC DEVELOPMENT AND GROWTH Partnership with this Ministry is facilitated mostly through the Infrastructure for Jobs and Prosperity Act, passed in The broader mandate of this Ministry is to establish mechanisms to encourage principled, evidence-based and strategic long-term infrastructure planning that supports job creation and training opportunities, economic growth and protection of the environment.through the Act, the Ministry has created a prosperity fund for capital investment and strategic partnerships to help Ontario companies meet three objectives: build innovation capacity, enhance productivity and improve access to markets. Cluster building is a key activity defined under this broader Business Growth initiative; it establishes clear guidelines for Ontario companies to follow to access the resources of the Ministry. MINISTRY OF RESEARCH, INNOVATION AND SCIENCE: This Ministry promotes policies and investment in research and development in our HHS cluster. It supports world-class research, commercialization and innovation taking place across Ontario through a range of programs and services like the Ontario Research Fund, Innovation Demonstration Fund and Ontario Venture Capital Fund. Funding for Ontario Centers of Excellence is sourced from these programs; Regional Innovation Centers, including MaRS Discovery District. MINISTRY OF INTERNATIONAL TRADE: This Ministry centrally coordinates trade activities in Ontario by working with the business community, key organizations and partner ministries to advance the province s economic interests around the globe. The Ministry will integrate responsibility for trade strategy, trade missions and promotion among all ministry partners to increase Ontario s exports and identify new markets. Ontario is leading in programs focused on adoption of innovation in local markets through the office of the Chief Health Innovation Strategist. The organization creates a bridge between the Ministry of Health and the Ministry of Economic development and serves as a gateway for communication and leveraging Ontario s healthcare investment into economic benefit. 16

20 OFFICE OF THE CHIEF HEALTH INNOVATION STRATEGIST: Created in 2013, OCHIS purpose is to foster collaboration across the healthcare system to accelerate the adoption and diffusion of new innovative health technologies and processes to improve patient outcomes, add value to the healthcare system, and to create jobs in Ontario. Focused on procurement, the office enables effective adoption of innovation by shifting the healthcare system to strategic, value-based model and removes barriers for small and medium-sized enterprises to participate. MINISTRY OF GOVERNMENT AND CONSUMER SERVICES: Delivers vital programs, services, and products ranging from health cards, drivers licences, and birth certificates to consumer protection and public safety. Where this intersects with the HHS cluster is through procurement of innovative health solutions. This process is governed under the 2011 procurement directive which established the current RFP requirements. It also provides seed money for innovation through initiatives such as Procurement through Co-Design in collaboration with MaRS Innovation. CROWN AGENCIES: Several agencies exist to ensure patient s best interests are represented and healthcare is delivered effectively and efficiently. These agencies include Health Quality Ontario who is the provincial advisor on the quality of healthcare, Cancer Care Ontario the government s advisor on the cancer, ehealth Ontario who is establishing Ontario s digital strategy, and Public Health Ontario which is dedicated to protecting and promoting the health of all Ontarians and reducing inequities in health. Canada s federal government offers direct support through programs while performing the following functions: REGULATION: The primary organizations in this domain are Health Canada which leads the approval process for commercial products and services, along with essential companion organizations including those that regulate and protect intellectual property (CIPO Canada). FUNDING AND GRANTS: The Canadian Institute of Health Research is the most prominent resource, providing over $1 billion annually in grants for health research. The Natural Sciences and Engineering Research Council of Canada is a premier source of federal funding for university-based research.the Industrial Research Assistance Program offers more generalized support to companies looking to accelerate growth through technology and innovation. Grand Challenges Canada offers grants to what it terms the most bold approaches to innovation. The federal research tax credit program has a large positive impact on the HHS cluster as this reduces research and development costs for small Canadian owned companies. Within the province, agencies such as FedDev Ontario administer programs to support commercialization activities in the HHS cluster. 17

21 INNOVATION AND COMMERCIALIZATION: Innovation, Science and Economic Development Canada (ISED) supports innovation programming and cluster development under Canada s Innovation Agenda, being rolled out in A federally-funded venture capital program called Venture Capital Action Plan has been established to help fund early stage companies. The Canada Revenue agency offers Scientific Research and Experimental Development Tax Incentive Program, incentivizes research by providing tax credits for qualifying activities. INNOVATION ACCELERATION In addition to the support and expertise provided within companies and from dedicated provincial health-related agencies, the Toronto region benefits from an evolving yet rather matured ecosystem that fosters innovation, entrepreneurship and scale-up. On the leading edge of innovation lies a number of forums, venues and events for entrepreneurs to share and incubate ideas and network. For individuals and companies with more developed concepts and understanding of market potential, Toronto harbours a wealth of independent advisors, idea incubators and accelerators, who prepare companies to operationalize, scale-up and/or secure an additional round of financing. MaRS Discovery District is the largest urban innovation hub and the most influential center of expertise of commercialization and adoption of technologies. The organization was established to develop a world-class innovation and convergence centre in Toronto dedicated to improving Canada s social and economic prosperity from its science, technology and social innovations. MaRS core programs include business advisory services, education and market intelligence to attract and equip Canadian innovators with the skills, tools and networks they need to thrive and grow in the global knowledge economy. MaRS also works to scale and diffuse innovation through collaborative initiatives that open markets and create new solutions for start-ups. MaRS administers partner payment grants on behalf of the provincial and federal governments by providing flow-through grant funding. Connected to this district is MaRS Innovation, a non-profit organization that acts on behalf of its members 15 of Toronto s top universities, institutions and research institutes, plus the MaRS Discovery District to bring their most promising life science research breakthroughs to market. It was formed in 2008 as a Centre of Excellence for Commercialization and Research (CECR) by the Networks of Centres of Excellence, and is supported by not only its member institutions but by the Government of Ontario through the Ontario Centres of Excellence. MI s portfolio is built upon a pipeline of over 1,400 intellectual property disclosures from researchers within member institutions. Centre staff work with inventors and their founding teams to bring these discoveries to global markets through industry partnerships, licensing or start-up companies. Specific services provided include commercial services, early-stage funding resources and brokering deals with industry and private investors. Ontario s 17 Regional Innovation Centers (RICs), a number located in the Toronto region, support businesses in accessing mentorship and small amounts of funding. Other established incubation infrastructures in the Toronto area which include Ryerson University s Biomedical Zone (BMZ), Digital Media Zone (DMZ), The Next36, Highline and Hacking 18

22 Health. Toronto s vast network of services and support continues to accelerate learning and improve commercial success, leaving Toronto as the third largest global city outside of the United States (London, Beijing) to attract Venture Capital investment. 17 Technology transfer and commercialization organizations like MaRS Innovation (MI), a non-profit innovation center that represents Toronto s top 15 academic institutions and research centers, assist inventors of all types to commercialize intellectual property born out of more scientific research. MI manages a pipeline of over 1,400 items of Intellectual Property funded by over $1.4 billion in investment from multiple sources including government, private and philanthropy. Other commercialization groups like Centre for Commercialization of Regenerative Medicine (CCRM) focus on the commercialization of defined technologies. Multinational Enterprises are now contributing significantly to this component of the ecosystem. JLABS is an international innovation incubator created by Johnson & Johnson to support local start-ups with lab space, programs and potential investment partners as they work to build important, successful early-stage companies. In an creative collaborative arrangement, CCRM and GE Healthcare are working together to leverage public investment in regenerative medicine. This partnership allows research into manufacturing innovative therapies and scaling them into real-world therapies that can be applied to patients. Industry associations and cluster groups such as TO Health!, LSO, OBIO, OCC as well as others create ecosystem connectivity, understanding of challenges and opportunities and create a base for companies to be successful either coming to or growing in the region s cluster. HEALTHCARE SERVICE PROVIDERS A consistent phenomenon on the radar of the Ontario government is the rising cost of healthcare, which at over $40 billion annually is nearly a third of the Ontario budget. More concerning is the growth in costs year over year, which has been approaching double digits over the past decade. A key mandate in the 2016 budget is to slow this pace to a target of two percent 18 by concentrating on three areas: innovating service delivery, creating better linkage between and integration within healthcare solutions and developing proactive measures to keep Ontarians healthy. Health care service providers thus play an important role in not only the HHS cluster but in the broader mandate to lower the cost of healthcare delivery through innovation. There are 79 hospitals across the extended Toronto region, including world leading institutions such as University of Health Network, Trillium health Partners, Sunnybrook Hospital, Mount Sinai Hospital, and Sick Kids Hospital. 19 Health practitioners account for 14,383 practices, which include physicians, chiropractors, dentists and others. 20 Hospitals are supported by several private laboratory who provide the necessary routine tests for patient care, Lifelabs provides convenient access to laboratory testing services to ensure speedy healthcare service to patients across Ontario. As Canada has a universal single-payer system, these health care service providers combined are the biggest buyer in the domestic market for the human health and sciences products. Healthcare service providers -- especially through hospitals -- service the the most important stakeholders in the value chain, the patients. The end result of all the research, investment, commercialization, and realization of innovation is 19

23 better products and services that foster maximum patient access and most importantly exceptional patient health outcomes. Central to our mandate and as a part of all of our cluster collaborations we place patient well-being at the core of our objectives to the same degree as these providers. With this focus in mind, service providers will play a vital role in the ecosystem to deliver a host of benefits beyond patient outcomes, including adoption of healthcare innovation and more efficient delivery of products and services. 20

24 Strengths and Opportunities in the Toronto Region 21

25 Strengths and Opportunities in the Toronto Region Our cluster is incredibly diverse and strong in many areas of health, science and medicine. Specialization within a cluster is central to building capacity while accelerating and facilitating growth. By focusing on regional strengths, the cluster will achieve multiple benefits from the identification and development of select core backbone of the cluster and an international reputation that comes with attention and respect in our expertise. As the cluster develops and initiatives drive outcomes, we will continue to revisit and update our understanding of the strength and connect to current and emerging competencies. In this section we will first comment on the foundation of our cluster in its current state; we will then outline the three core therapeutic areas of expertise, followed by highlights of our four biggest technology-based opportunities. Together, these form our seven areas of strength to exploit as opportunities going forward. STRONG CLUSTER ORGANIZATION In an ideal cluster, firms, research institutions, education institutions, markets, and government all collaborate seamlessly. However, in reality there are barriers of many kinds that inhibit a perfect level of teamwork. Cluster organizations bridge these gaps to improve collaboration to enhance the performance of the cluster as a unit. According to the respected Greenbook study, 89% of cluster organizations reported improvements (over the last three years) in collaboration among firms when using such a setup. 21 TO Health! was founded by the Toronto Region Board of Trade to be the cluster organization for the Toronto Region HHS Cluster. The strength of the organization comes from the ability to create a collaborative environment between the member of the Triple Helix 22 : academia, industry and government. Today, TO Health! is a stand-alone organization, with the program administered in kind by MaRS Discovery District. TO Health! is focused on raising the profile of the Toronto region s Human Health & Sciences (HHS) cluster with a vision is to make the Toronto region globally renowned for its dynamic and innovative Human Health & Sciences ecosystem, placing it among the world s top five clusters. Building on the foundation of a strong cluster organization to realize this vision is a large opportunity for the region. By supporting collaboration and coalition-building between all stakeholders in the cluster, we will increase the number revenue growth opportunities for the Toronto region by attracting more risk capital, corporate investment and qualified talent. 22

26 TO HEALTH! STRATEGY The graphic below summarizes the mandate and opportunity offered by TO Health! Anchor Corporate Investments Grow Risk Capital Attract & Develop Talent RAISE PROFILE Promote the HHS Cluster Globally to attract outside investment CONVENE CLUSTER Leverage the opportunities to grow the cluster with our shared strengths & assets BRAND Link the cluster through a united brand, presence & voice THERAPEUTIC STRENGTHS AND TECHNOLOGY OPPORTUNITIES The HHS cluster is strong in three therapeutic domains, Oncology, Neurological Diseases, Cardiovascular diseases/ Diabetes (two prominent chronic diseases). These are also areas of greatest need for solutions. We see an opportunity to tackle these healthcare challenges and create economic benefit for the region through research, development and commercialization within four technology areas, in each of which Toronto region s cluster is particularly well-suited to compete. The graphic below summarizes the framework of our strengths and opportunities. 23

27 AREAS OF STRENGTH IN THE TORONTO REGION THERAPEUTIC AREAS OF STRENGTH The HHS cluster is strong in three therapeutic areas. Identification as an area of strength stems from our institutions, assets and capabilities, from research and development all the way to patient care provision. A summary of the key assets within the areas of strengths is below. Each area of strength represents a different set of opportunities for the region, some more close at hand and some emerging. In the sections that follow we will outline recommendations that will allow us to take advantage of the opportunities presented to us by our strengths. ONCOLOGY Overview As the number one cause of premature death in Canada (175,000 new cases diagnosed per year in Canada 23 ), cancer has long been a priority therapeutic area of focus. Ontario has some of the finest global cancer researchers who are studying cancer biology, developing new cancer therapies, diagnostic tools and other anti-cancer technologies. When these novel products make their way into clinical use they improve outcomes for cancer patients and reduce the cancer burden on society. 24 From 2011 to the beginning of 2015, Ontario s Regional Cancer Programs brought the initiatives of our third cancer plan (OCP III) to life at the regional level. More patients participated in screening programs, waited less time for radiation, and accessed high-quality care closer to home thanks to the commit- 24

28 ment and hard work of our regional partners. Here, we celebrate just a few of their achievements in making positive improvements in the patient experience and the provision of high-quality cancer services across this province. Notable Assets Opportunities to develop solutions to cancer and cancer-related challenges are spearheaded by initiatives in research and treatment from world leading institutions. Princess Margaret Cancer Center is a Top 5 cancer institute in the world by measures of publications, IP, and patient outcomes. Other institutions such as universities and other research hospitals are critical in supporting clinical trials and innovative therapies. Cancer Care Ontario directs and oversees approximately $1.1 billion in funding for hospitals and other cancer care providers, enabling the delivery of high-quality, timely services. 25 Ontario Institute for Cancer Research and the commercialization arm, Fight Against Cancer Innovation Trust (FACIT) is the gateway to the cancer research pipeline. As a bridge between the public and private sectors, it applies an entrepreneurial approach, along with strong business expertise and industry connections, to continuously identify and advance breakthroughs in science and technology. It also functions as an active partner in the success of projects brokered. Local companies developing cancer fighting therapeutics are taking novel approaches to the disease. Companies such as Northern Biologics, AvroBio, Turnstone Biologics, and groups like CCAB are developing antibody and immune-system based therapeutics to fight cancer, pushing the envelope in innovative cancer care. Trillium Therapeutics has gained international recognition for its lead program, a SIRPaFc antibody-like fusion protein that blocks the activity of CD47, a molecule that is upregulated on a wide variety of tumors. In drug development, MaRS Innovation-supported Triphase Accelerator has become active in generating clinical trials for drugs to address newly-diagnosed malignancies. NEUROLOGICAL DISEASES Overview Canada ranks fifth out of the 20 most-cited countries in the field of neuroscience behavior. It has also achieved many ground-breaking discoveries of treatment, drugs, and research in this field since Ontario, as the national leader, is home to more than 500 neuroscientists and has the most Canada research chairs in neuroscience out of all the Canadian provinces. Moreover, in a comparison of major neuroscience centers in North America, the Toronto region is competitive with centres in California and Massachusetts. 27 These achievements all proved that Toronto region, the most concentrated area in these neuroscience centers, enjoys a unique advantage over other global jurisdictions. Notable Assets Toronto enjoys several key specialized and advanced assets in the neuroscience field, including world-class University of Toronto Centre for the Study of Pain; Center for Research in Neurodegenerative Disease; Toronto Rehabilitation Technology Consortium which specializes in brain injury, stroke and spinal cord rehabilitation, to name a few. These world-leading research institutes, centers and universities along with its notable leading professors and researchers are valuable assets to the region, and led 25

29 to many thriving start-ups spinning off from the field, such as NoNo, NeurAxon, Amorfix Life Sciences and BrainFx. The regional innovation centers Ontario Brain Institute and Agewell focuses on neuro and age related research and commercialization helping researchers turn their research into product that can be deliver to the most at-risk patients. Toronto region is home to medical device companies that are currently scaling to develop products and penetrate global markets. Synaptive Medical, which develops surgical technology to combine informatics, imaging, surgical planning, navigation and advanced optics, has just announced a strategic financial partnership with General Atlantic. The purpose includes installation growth beyond select top-ranked health care facilities across the United States where it has currently experienced success. Toronto s InteraXon is seen as a hybrid startup in brain health, broaching categories of wearable technology, application development and general health and wellness. Its primary product is Muse, a brain-sensing headband designed to improve the meditation experience with a responsible application. The company is exploring how its core technology can be leveraged in such disparate fields as automotive and law enforcement. CARDIOVASCULAR DISEASES AND DIABETES Overview Ontario is where insulin was discovered and where the first pacemaker was developed, demonstrating a rich history in cardiovascular diseases and diabetes management. In 2007, Ontario s Ministry of Health established a framework and action plan to address the trajectory of disease statistics as regularly collected by the province. At the time, chronic diseases such as heart disease, diabetes, asthma, arthritis, osteoporosis and even chronic depression had overtaken infectious diseases as a primary cause of death in Canada. The goal of the action plan was to reduce healthcare costs by promoting early detection and management, as well as to promote prevention. In Canada, over 80% of people aged 45 and over are living with at least one chronic condition while a further 70% of those suffer from more than one. 28 The approach to the framework involves to first to move identification and treatment upstream from late-stage treatment of acute illness and then to ensure management is not episodic but is instead ongoing. Notable Assets Ontario benefits from foundations and research organizations operating on both a national and local level that focus on disease state verticals. Aside from this practice, we are experiencing new companies cropping up with missions that are consistent to the framework, specifically to facilitate more/ better/cost-effective patient touch points with professionals while also linking stakeholders to the broader array of support groups to foster a more continuous chain of treatment and prevention instances. The Ted Rogers Centre for Heart Research was created thanks to one of Canada s all-time largest private health care donations. It has three major institutional partners, including the Hospital for Sick Children, University Health Network and University of Toronto. The mission is to address a number of heart-related illnesses across the entire lifespan. 26

30 The Banting and Best Diabetes Centre is affiliated with the University of Toronto. It self-identifies as Canada s leading centre of excellence for research, education and clinical care for Canadians affected by the disease. EMD Serono, Canada, is an affiliate of Merck KGaA, Darmstadt, Germany. It is known for its innovative products and services that support patients in the area of neurodegenerative diseases, fertility, and endocrinology. Zucara Therapeutics is developing the first once-daily therapeutic to prevent hypoglycemia (low blood sugar) in patients with diabetes. Antibe Therapeutics is a home-grown pharmaceutical company that champions full integration of value delivery from research to commercialization. It specializes in the areas of pain, inflammation and regenerative medicine. The Juvenile Diabetes Research Foundation Canada is the leading research organization for Type 1 diabetes. TECHNOLOGY OPPORTUNITIES Our areas of therapeutic strength allow us to start building and considering opportunities to increase competitiveness. The opportunities lie in the research, development and commercialization of technologies that support and enhance our therapeutic strengths. The four technology areas identified below represent the opportunity areas for development within the cluster. Like the therapeutic areas, these technology areas have been identified based on institutions, assets and resources already present in the region, upon which we can build. REGENERATIVE MEDICINE Overview Ontario is a leader and innovator in the fields of stem cell science and regenerative medicine discovery. Stem cells were first identified in Ontario more than 50 years ago. This is also where the first successful lung transplant happened and L-DOPA for the treatment of Parkinson s disease originated. For close to a century, local researchers have been at the forefront of major breakthroughs in nearly every area of regenerative medicine. 29 In this domain, stem cells were first identified at Toronto s Princess Margaret hospital by Drs. James Till and Ernest McCulloch in This discovery has formed a foundation of a Toronto-based network for science and commercialization. Notable Assets Two primary assets have been established in Toronto to service and support the province and beyond. With $28 million in combined funding from two provincial ministries, The Ontario Institute for Regenerative Medicine (OIRM) was created in In partnership with the Centre for Commercialization of Regenerative Medicine (CCRM, established 2011), the GTA is able to build from a network of scientists and clinicians to partner with business and industry leaders for the sake of ensuring new therapies and solutions can be commercialized with minimal barriers. As stated previously, the collaboration of CCRM and GE to create a state of the art cell and gene therapy manufacturing facility, BridGE@ CCRM, represent the future in commercialization and private/public partnership. 27

31 On December 12, 2016, Bayer and Versant Ventures announced the creation and funding of a new regenerative medicine company, BlueRock Therapeutics, a stem-cell therapy firm with the backing of a combined $225 million Series A investment. BlueRock s initial programs will focus on induced pluripotent stem cell (ipsc)-derived therapeutics for cardiovascular disease and neurodegenerative disorders. The company s research partnerships include the McEwen Centre for Regenerative Medicine and the University Health Network, and scientists such as BlueRock co-founder Gordon Keller, Ph.D., and founding investigator Michael A. Laflamme, M.D., Ph.D., all based in Toronto. DATA AND ANALYTICS Overview Digital health is a broad-scope realm of companies that share common objectives achieved through digital solutions: produce better clinical outcomes improve patient experiences reduce patient care costs enable more intensive data analysis to improve overall quality of healthcare At the backbone of the digital health domain lies the government of Ontario s ehealth, the data and image repositories to which all other members of the system would be connected. Aside from ehealth, investment from Ontario has been directed to two other groups: Ministry-funded organizations supporting the use of electronic records and organizations funded through Local Health Integration Networks (LHINs) such as hospitals and Community Care Access Centres (CCACs). Against this public backdrop, MNEs and local startups are either pursuing or evaluating digital innovation products and platforms in concert. Notable Assets Digital health companies in the Toronto area are characterized as both established and emerging, in both the public and private sector. To complement ehealth, Ontario s public digital and informational infrastructure is a significant asset, which represents a further opportunity for development and leverage. Notable organizations within the region include ORION, Canadian Institute for Health Information, Compute Ontario and Ontario Telemedicine Network. Ontario also leverages national infrastructures such as Canada Health Infoway (supports digital innovation and adoption across the national with multiple programs) and Panorama, a public health surveillance system. Telus is a major telecom company with focus in the digital health space, investing heavily in electronic medical records and venture projects under their department Telus Health. Telus health is currently working on solutions in five key areas, chronic disease management, poor access, medication errors, prevention, and performance management. 28

32 The startup ecosystem is also breeding some forward-thinking newcomers to the cluster. Think Research develops knowledge-based tools and leading clinical content for clinicians to deliver the best evidence-based care to patients. Figure 1 has developed a secure global platform to foster instant worldwide education and collaboration for medical cases that include those that are rare and complex. IMAGING AND MEDICAL DEVICES Overview The Toronto region is a hub for medical devices and pharmaceuticals and is home to many head office locations for firms in this industry. Sixteen of the top 25 global medical device companies operate in the Toronto region, including Baxter, Siemens, Johnson & Johnson, GE Healthcare and Medtronic. Over half of Canada s (approximately) 1,100 medical device companies are located in the Toronto area. The Canadian medical device market size was over US$5.4 billion in 2010, 30 making it the 7th largest in the world. Ontario is the largest medical devices producing region in Canada - with annual sales over $2 billion. Ontario producers export approximately 90% of products made. Ontario s MedTech industry is already producing innovative advanced physical technologies that range from creating advanced devices that give sight to the blind to intricate computer systems that track dangerous pathogens like Ebola. Notable Assets In medical imaging, numerous software and hardware firms sell to, integrate or work with major original equipment manufacturers (OEMs) like Siemens, Hitachi, Toshiba, Philips and GE. The Joint Department of Medical Imaging (JDMI) partners with the University of Toronto s Imaging Centre and imaging OEMs, and includes no fewer than five teaching hospitals one of which, the University Health Network (UHN), has 500 medical imaging staff, a multi-million dollar fleet of equipment, and the largest radiology training program in the world. 31 Research and development organizations focused on imaging include TECHNA and STARR, institutes of UHN and CIMTEC, a development support organization. Start-up and scaling companies in device and imaging include Profound Medical, Novadaq, Baylis Medical and Conavi. Medtech firms of all sizes have already begun to discover the assets available from not only the Toronto region but the Ontario infrastructure as well. Already, there are several locally-based companies established in the space and delivering results: Xagenic, an Ontario start-up success story, is an example of how Ontario s environment of innovation has taken research outcomes from bench to bedside, enabling the company to access a potential market of more than $2.5 billion. Medtronic, with headquarters in Brampton, Ontario, was ranked one of Canada s Top 100 Employers as well as one of Canada s Best Large Workplaces in This firm is a global leader in medical technology, 32 focusing on advanced solutions to alleviate pain, restore health, and extend life in the areas of cardiovascular medicine, diabetes, spinal and neurosurgery, and ear, nose and throat surgery. 29

33 BD with headquarters in Mississauga leads in patient and healthcare worker safety and the technologies that enable medical research and clinical laboratories. The company provides innovative solutions that help advance medical research and genomics, enhance the diagnosis of infectious disease and cancer, improve medication management, promote infection prevention, equip surgical and interventional procedures and support the management of diabetes. Genomics GENOMICS Overview Canada s interest in genomics has grown in tandem with the highly-recognized International Human Genome Project in Since this time, Health Canada has mandated and supported a concerted effort to expand research into molecular interactions of assorted types. The growth of genomics and the resulting boom in development of associated technology have created a tremendous global opportunity to increase pace of research, determine a person s risk of developing a disease or conditions and even develop preventions and solutions that cross into socio-economic domains that include agriculture and sustainable enterprise. Notable Assets With the support of Health Canada and the Ontario government, the not-for-profit organization Ontario Genomics (OG) was created in Drawing from both private and public sector, OG has sourced funding for over 100 projects at a cost of over $800 million. 33 It works with companies, researchers, and policymakers to support the early stages of moving genomics technologies from the lab to commercialization phase. Its mission is to spark, support and sustain Ontario s genomics technology pipeline as a key driver of the province s economy. Its key stakeholders are policymakers, researchers, MNEs and startups looking to expand. The Structural Genomics Consortium leverages world class computing power and sequencing to develop novel drug leads and partner with pharma companies to develop leads into drugs that will lead to better patient care. Companies focused on Genomics include: Deep Genomics, which develops machine learning technologies to transform precision medicine, genetic testing, diagnostics and the development of therapies; Cyclica, which enhances drug discovery by harnessing big data and predictive analytics, and Proteorex, which develops cures for diseases by identifying and blocking faulty molecular networks inside and outside of cells with an innovative proprietary technology. 30

34 CHALLENGES AND THREATS While the HHS cluster in the Toronto region is in a strong position to compete with other regions, there are several areas in which Toronto is not as competitive as other regions with established clusters. If not addressed now, as we are building momentum, these challenges will prevent us from achieving our goal of becoming a top global cluster. BRANDING AND MARKETING There are several objectives in this area to be addressed in the path to bring Toronto the forefront of global health clusters. The Toronto region Health cluster is not yet consistently included in global audits and forecasts of health clusters, even though the economic power and potential as outlined is substantial. The primary need as a result is to begin to raise the national and international profile of the cluster for the sake of being organically considered for study, partnership and investment. Dedicated initiatives to simply create awareness and elevate the profile of the HHS cluster will be isolated and prioritized. Here at home our goal is to elevate the status to that of supercluster in the view of the Canadian government as a part of its innovation agenda. Once this is addressed, the focus will shift to creating a strong and positive reputation for the cluster based on how we communicate strengths and outcomes to influence opinion. Currently, information comparing the Toronto cluster to others around the world is anything but comprehensive, which challenges the goal of advocating Toronto over its competitors. Raising the profile among those conducting secondary research for international dissemination will be a top priority that can provide cost-effective returns. The last key component that is currently underdeveloped is a comprehensive set of tools and assets customized to serve and influence all key stakeholders. While the cluster will have a core brand and message, specific marketing tentacles must reach investors, relocating executives and internal cohorts to create the desired actions and outcomes. A complete marketing strategy and plan is required to extend communication of core messaging with downstream customization to serve all cohorts and opportunities. LACK OF RISK CAPITAL The appetite for risk investment has not risen in tandem with the growth rate of the health cluster at large. Investment -- from both local and foreign sources -- has been directed to safer and more reliably lucrative sectors such as real estate and natural resources. This has affected the speed to success of the HHS cluster as access to capital is identified as a major obstacle by industry in multiple round tables and reports. As mentioned, the Toronto area outpaces Venture Capital investment of major European and Asian cities, but significantly lags up to a dozen U.S. centers in dollar investment per capita. 34 Strategies to market to investors should best be targeted to North American VC firms with particular focus on those in Canada, to help preserve the region s talent. As a cluster, we are failing to develop or 31

35 leverage more localized financing solutions, even though Canadian corporations and large institutions have considerable equity available to invest. LACK OF CORPORATE INVOLVEMENT Corporate investment is another critical challenge for the industry. As a leading indicator, a multi-country study by the Organization for Economic Co-operation and Development (OECD) calculated that a 0.1 percentage point increase in the Business Enterprise and Research and Development (BERD)-to- GDP ratio increases GDP per capita by 1.2 percent, with all other factors being equal. 35 Corporate investment plays a critical role in our cluster growth. However, BERD as a percentage of GDP in Ontario has steadily fallen since A similar pattern was also identified by industry stakeholders in previous working group consultations held by the Toronto Region Board of Trade. Contributions from the corporate sector are lacking in ways that go beyond direct investment in research and commercialization. Their involvement is not yet seen as widespread in terms of sharing knowledge, transferring competencies, anchoring efforts to promote Toronto as a commercial center and collaborating on additional infrastructural tools to help emerging companies and the entire ecosystem more successful. There is opportunity to create more pathways for corporations to become involved. MANAGERIAL TALENT Our cluster faces the greatest difficulty in recruiting skilled managers, and investors report concerns regarding the lack of managerial experience among entrepreneurs when it comes to acquiring funding for R&D, commercializing effectively or expanding into international markets. 37 Although Toronto enjoys a reservoir of talent from colleges and universities on the scientific and technical side (unemployment among science graduates under that age of 25 consistently exceeds 15%), the region lacks sufficient experienced talent that is strong in human health and sciences commercialization, including knowledge in both procurement and HHS products. Toronto HHS start-ups often lack the credentialled leadership necessary to successfully grow and scale-up. Businesses that are able to successfully come to market and thrive are the ones that generate the wealth and experience that can then be re-invested in the next start-up; this creates serial entrepreneurship, which in turn creates success inertia for the following generation of companies. While mentorship programs exist in both formal and informal environments they alone cannot compensate for experience and insight into a complex and regulated industry. Dedicated measures to import talent from MNEs or foreign territories to complement Infrastructural solutions in post-graduate education that are being considered. PROCUREMENT: GAINING ACCESS TO THE LOCAL MARKET While the Toronto region now has widespread sources of innovative health science, we have not seen ongoing examples of adoption of cluster products and solutions into the public healthcare system. On the Global Competitiveness Index, Canada is ranked 55 out of 140 when it comes to government 32

36 procurement of advanced technology from emerging sectors. 38 And because in Ontario (as well as all over Canada), government is the dominant payer and buyer of healthcare products and services, the need to improve such metrics is amplified. Market potential for companies in our cluster is significant. The Provincial government is by far the largest purchaser of healthcare services, spending approximately $40 billion annually, mostly on care, drugs, testing and service delivery (27% of spending is on doctors themselves). 39 Integration into the Canadian market is estimated to take more than two years longer than the processes of other developed countries. 40 Procedures here lack transparency and predictability and are considered burdensome and cumbersome by vendors. It is particularly difficult to navigate for SMEs, as there are fewer procurement processes geared towards assisting or prioritizing these companies as compared to other jurisdictions. 41 Where price is and primary procurement criteria are in place to benefit scaled companies most, HHS cluster member companies become immediately challenged to break through, grow, or even substantiate a business case to develop new products. If innovative health tech companies across Ontario are unable to anchor in the domestic market, it is much more difficult for them to create a business case to stay here. The 2016 Ontario Bioscience Innovation Organization s survey of health science companies verified that many companies have trouble selling their products in Ontario. 42 Hence, procurement reform is critical to providing Ontario patients access to Ontario discoveries, and ensuring our system is an attractive market for health innovation from other jurisdictions. 33

37 Action Plans and Outcomes 34

38 CLUSTER ACTION PLAN SUMMARY 4 OBJECTIVES Raise the Profile of the Cluster both Internally and Externally Expand the Pool of Specialized Risk Capital Anchor Cluster with Infrastructure and Corporate Global Mandates Attract, Develop and Retain C-Level Talent 8 TACTICS A detailed, interactive cluster inventory that includes a functional listing of organizations, programs and resources in the cluster. An ongoing stream of high profile health-related conferences in the Toronto region, including existing major conferences and new programming. A Health Science focused stewardship program, facilitating inbound and outbound international engagement, hosting global delegations and showcasing the cluster. A government-catalyzed, industry matched and administered venture fund specifically focused on Health Sciences. Resources and streamlined application processes to help local outposts of leading MNEs secure a new wave of investments, partnerships and alliances that align with HHS cluster strengths. Program further leveraging and optimizing public sector procurement to accelerate the absorption of innovation into the healthcare system. A plan that prepares the Toronto region to utilize healthcare data to drive better health outcomes and greater economic benefits. A targeted program that helps scaling companies access C-level executives with specialized skills. 8 SHORT TERM OUTCOMES An ability of stakeholders within the cluster to tell the Toronto HHS cluster story both internally and externally. A measured increase in the amount of collaboration between stakeholders within the HHS cluster. Additional sales resources for the Toronto region, including a complete listing of Global partnerships already in place here. A more complete understanding of the risk capital landscape for Health Sciences in the Toronto region. An identified lead and strategic work plan that identifies shorter term and longer term opportunities and a process to connect these to JPF funds. An expanded and deepened commitment to attracting and embedding novel significant technological interventions for delivering better outcomes to patients. A more detailed understanding of opportunities to use health data to improve patient outcomes as well as anchor growing healthcare data firms. An understanding of required skills sets HHS companies need to grow and scale and where to find these kinds of skills. 5 LONG TERM OUTCOMES A measurable increase in the number of midsize, scaling healthcare companies (100+ people employed) One major healthcare company anchored in the region Half of the global multinational healthcare MNEs located within the region will have a focus on partnerships and innovation. An investment of private capital from a broader range of partners than currently do not invest in Health Sciences or not in Ontario. A core group of world class, talented and experienced C-level executives working with companies in the region. 35

39 Action Plan and Outcomes OBJECTIVES The following objectives represent four areas of work we have identified as critical in order to make the Toronto region a globally recognized leader in Human Health Sciences, create jobs and increase investment in the region. Following the objectives, we will present the eight (8) prioritized actions, along with outcome metrics, planned participants and the actions required from the Ministry of Economic Development and Growth in partnership with the cluster. OBJECTIVE #1: RAISE THE PROFILE OF THE CLUSTER BOTH INTERNALLY AND EXTERNALLY The Toronto HHS cluster region already possesses the assets, capabilities and successes to showcase to the global community. To raise our profile to the level deserving of our status, we must harness the knowledge we collectively have in our region to create a narrative that is both consistent and compelling to all of our stakeholders and potential partners. More specifically, we will tell the world what we have, why it matters and how building and working in the Toronto region will create value for businesses and better healthcare for patients. The short term focus is to align this narrative within our cluster and then quickly expand our strategy to speak in one clear voice to our visitors, using tools, assets and events to deliver our message. Simultaneously, we will ensure our cluster delegates will be better equipped to represent our strengths as they engage with new and existing partners outside of our territory. Within this common messaging DNA we will customize our marketing efforts where needed. Given there are multiple message points to deliver to a host of unique stakeholders (talent, investors, entrepreneurs, researchers, etc) we will work to prioritize marketing opportunities although all will be given attention over time through specialized outreach. OBJECTIVE #2: EXPAND THE POOL OF SPECIALIZED RISK CAPITAL The best proof points for a developing cluster are successful companies which continue to grow and scale here. For this to happen, not only do we need to innovate, but we need to attract the best and committed partners that see the business merit in our ideas and plans. And, importantly, these partners need to see our products and solutions as viable investment opportunities, especially when compared to our neighbours south of the border and beyond. A disproportionate amount of risk capital in Canada is applied to opportunities which are later-stage or are in sectors which investors feel are less risky, have more history of successful returns or are incentivised differently, such as the resource industry and high technology. Investment in Health Science companies in the US is done on a dramatically different scale and requires patient, smart, specialized money in order to make sound decisions and create value for shareholders. 36

40 In Ontario we need specialized catalyst investment to anchor and attract a much greater amount of specialized private capital from a broader range of partners. Not only is investment required at all stages, but we must collectively advocate a longer-term patient investment horizon from the international investment community (angel, seed and institutional late stage venture capital(vc)) as an important mandate for us. As a part of this objective we will undertake the exercise of identifying and profiling the root causes of the lack of investment with more insight. Member of the cluster will study the risk capital landscape, tax frameworks, perception of and methodologies toward evaluating risk and where possible true ROI measures of investment. The results of this research will shape our next list of priority action items in the domains of education and incentives. OBJECTIVE #3: ANCHOR CLUSTER WITH INFRASTRUCTURE AND CORPORATE GLOBAL MANDATES The contributions required to propel the Toronto region to elite global status stretch far beyond risk capital aimed directly at commercialization activity. The opportunity exists for us to develop in concert a cluster infrastructure that creates assets, removes barriers and seizes opportunities for the common sake of the majority of stakeholders. The Province of Ontario has a significant opportunity to become Canada s leader in compiling, analyzing and leveraging the power of big data for health. Based on the Toronto region s critical mass of multinational technology companies, artificial intelligence researchers and digital health startups, Toronto region has the opportunity to position itself as the leader in the intersection of healthcare and cognitive computing. Toronto is also home to the Canadian head offices of a critical mass of multinational enterprises (MNEs) representing a host of health care sectors. These companies and their executives are committed advocates for increased investment in the region. However, they face increasingly competitive funding environments within their own firms, with R&D and commercialization decision-making becoming increasingly concentrated within their global headquarters. Solving this problem requires collaboration between the cluster and MNEs in particular to create a momentum of investment in infrastructures that create more powerful asset solutions for the region. This can come in the form of partnerships, procurement processes, information assets, knowledge banks or centers of competency for needs throughout the value chain. A barrier faced by Toronto region HHS companies who build products for the local healthcare market is the difficulty in accessing that market. The current procurement model used by most large health service organizations and their buying groups tend to exclude small and medium sized companies from participating. For emerging Ontario companies, these difficulties represent one of the barriers to maintaining and growing their operations in the province and beyond, since many global customers look for the validation that comes from successful experience selling into your home market. In executing on this objective we propose to implement programs that enhance the infrastructure of the cluster and facilitate companies anchoring in the Toronto region. Companies will do so to either access a unique asset, access the market or our research capabilities. 37

41 OBJECTIVE #4: ATTRACT, DEVELOP AND RETAIN C-LEVEL TALENT A widely-held belief within the cluster is that talent follows the flow of funds. Our goal is to accelerate this movement by how we message and resource our needs for the best talent. Start-ups and SMEs frequently lack the managerial skills or specialized technical knowledge required to lead their companies to a place of sustained growth and commercial sustainability. These companies have become preoccupied with science or commercialization challenges. They lack the business sophistication, resources and the connections to access either experienced managers executives who have built, led, and sold early-stage companies or advisers with deep knowledge of everything from intellectual property protection and regulatory affairs to in-licensing and sales. Our goal is to help cluster members source the necessary talent while building connections between people and partners with the right expertise. TACTIC PRIORITIZATION PROCESS As a starting place for the prioritization discussions at the roundtables, TO Health! compiled a list of tactics which fulfill at least one or more objective. These tactics came from reports originally written by: TO Health! Ontario Bioscience Innovation Organization (OBIO) Life Sciences Ontario (LSO) Ontario Chamber of Commerce Toronto Region Board of Trade MaRS Other collaborators and stakeholders across the region A document providing the list of 29 tactics and brief background on each idea was circulated to roundtable participants as a pre-read for the sessions. Two roundtable sessions were held October 4 and 5. Detailed notes of the roundtable discussions and a list of attendees are included in the Appendix. The discussions were productive and focused on the feasibility and impact of the tactics, other ideas for the cluster, and broader directions for the cluster. 38

42 Based on the roundtable discussions, the 29 original tactics were condensed and combined into Top 15 actionable recommendations to help grow the HHS cluster in the Toronto region. This refined set of tactics was sent to all the roundtable invitees as part of a Cluster Survey. The survey asked respondents to rate each tactic on its potential impact and its feasibility. Concurrent to the survey, teleconferences were held with the senior leaders in the cluster to provide individual opportunities for input. Respondents were also asked to identify any areas in which they or their organization was already working and any tactics they would be interested in working on. As each tactic is developed further throughout 2017, a list of Cluster Partners will be created and refined, with roles for implementation.. Finally, based on the feedback received throughout the entire process, eight (8) priority tactics were identified for inclusion in the cluster strategy plan, which follows. The remaining strategic initiatives are highlighted in Appendix 2 and will be brought forward as opportunities and resources permit. PRIORITIZED TACTICS AND DELIVERABLES In this section we outline the eight prioritized tactics in greater detail. Some of these, for example Tactics 1-3 have a shorter term implementation timeframe and are fairly well defined. Others, like Tactics 4-8 will require further development. Groups within the cluster will have additional opportunity to comment and come forward to contribute or lead some of the tactics during public consultations to be held in early Integrated Cluster Inventory: A detailed, interactive cluster inventory that includes a functional listing of organizations, programs and resources in the cluster. Description: In order to showcase our strengths globally, we must first get to know what they are and where to find them. A number of organizations across the region have some form of a database and a partial view of the entire ecosystem. By creating a single resource, connected into a larger global Life Sciences database, will create a comprehensive, simple and user-friendly portal, with live data updated regularly with maximum utility such that its use to connect within the cluster will become habit-forming. We will develop an Integrated Cluster Inventory to be used as a common resource by our stakeholders internally and groups externally as a window into the Toronto region HHS cluster. The resource will showcase the variety of health science organizations represented in the region and allow an easier, one stop search and connection capability into the cluster as a whole. While we will include all cluster stakeholders, we will build out from a focus on our therapeutic areas of strength and technology opportunities, as identified in the Cluster Plan. 39

43 Up-to-date content provided within this asset map would be useful for municipal, regional and federal economic development groups to plan inbound missions and identify potential partners for international companies within the region. The Cluster Inventory, along with the TO Health! web site and other resource tools, will be a signature or calling card for the cluster in most national and international communications. Analogs/examples: A number of organization have either contributed data or have data to contribute to an all-inclusive regional HHS Asset Map. Existing maps and databases include Canadian Life Sciences database (Venture Valuation), Life Science Ontario s Ontario Life Sciences Asset Map the RISE medical device database, CCTAM Clinical trials asset map, OBI s Neuroscience Member map, MaRS Data Catalyst data, company directories from municipal Economic Development groups, FundingPortal and others. Deliverables: An interactive online resource aggregating all participants within the HHS cluster, including SMEs, MNEs, support service companies, institutions, and other information Annually updated set of cluster statistics, created as a report from the asset map and shared with the cluster stakeholders A regular report about utility: contacts made from outside sources, communication within cluster, to evaluate effectiveness and poll for gaps and improvements needed 2. Global Conference Attraction and Development: An ongoing stream of high profile health-related conferences in the Toronto region, including existing major conferences and new programming. Description: Although marketing and promotion is seen to be a primary opportunity for the cluster, the belief exists among our stakeholders that once external cohorts from the HHS community visit Toronto and experience the city s assets, a natural pathway will emerge for cluster growth and development. Hosting major international events in the cluster will create the necessary experiential component to complement the more two-dimensional activities of advertising and promotion. We will work with partners to create and execute an annual global Health Innovation conference, Toronto Health Innovation Week, a program to actively attract international participants and other global events to Toronto. This approach presents opportunities to raise Toronto region s profile and make connections between companies, investors, ecosystem and healthcare leaders. To be 40

44 successful in bidding for these conferences, we must work closely with industry, academic, municipal, provincial, and national partners particularly as it relates to the physical infrastructure needed to be successful in competing for large-scale events. We will host a recurring schedule, anchored on this region s strengths and requirements. Conferences could either leverage an existing conference and be grown to develop an international profile, or be a newly-launched event centered on a cutting edge topic in the Health Sciences. A recurring event would give the cluster an ongoing opportunity to demonstrate the region s assets on the international stage and allow the Toronto region to become a leader in a global conversation highlighting one or more of Toronto s strengths. Potentially this topic will become attached to the Toronto region and will be a part of narrating and branding the region so that people when people think of this topic they think of Toronto first. In 2017 we will launch Toronto Health Innovation Week (April 3-7th, 2017), anchored by the international RESI conference. This event will be the first in the series of activities to be developed and executed with partners in the region. Analogs/examples: Globally recognized clusters host large international events. For example, San Francisco is home to the iconic JPMorgan Healthcare Investment conference, around which an entire week of activities has grown, including a partnering conference run by EBD and the RESI (Redefining Early Stage Investment) conference. Other groups have also attempted to create multinational attractions to their regions, such as Basel who recently ran a Life Science Week. In Toronto the Tech community has held an investor event called Venture North, scheduled to coincide with the Toronto International Film Festival, which drew hundreds of people to the region. Similarly, Metro Toronto Convention Center hosts multiple healthcare focused events that draw thousands to the region. Last year, Toronto bid to hold the BIO international convention and was strongly considered for this prestigious conference. Deliverables: Toronto Health Innovation Week successfully launched in 2017 Tracking of metrics key to economic development number of visitors, number of countries sending visitors, number of exhibitors, number and profile of speakers and contributors, number of contacts, deals, hires A measurable increase in social media activity, posts/articles A report on lessons learned and plan for a yearly Toronto Health Innovation Week going forward 41

45 3. HHS International Connection Program: A Health Science focused stewardship program, facilitating inbound and outbound international engagement, hosting global delegations and showcasing the cluster. Description: There currently exists no single, dedicated process or resource to service outside parties in their efforts to connect with companies, researchers, and Health Science organizations, and learn about the opportunities that exist for their businesses in the region. At present, these activities happen in a more haphazard way and depend as much on chance as they do effort from all parties. This is true of for both inbound and outbound opportunities, as multiple organizations are engaged with no organized coordinating, sector specific expert driver for the efforts. While the Cluster Inventory will serve a necessary core function to define the cluster and provide information, we envision a more personal, concierge-type approach is required to create the desired outcome. Our plan includes the identification of a dedicated resource and creating a HHS International Connection Program to drive the profile and connectivity of the cluster globally. When developed, our program will provide services to our stakeholders including being a local Health Science cluster expert and local host for international groups looking to understand the capabilities in the region. The steward of the program will integrate relationships between interested parties planning inbound visits to the Toronto region, and will create targeted agendas for the visit and engage the right parties to showcase our assets. The steward will also create a proactive, targeted outreach program to groups outside the region, building relationships with other regions, cluster groups and international companies by inviting and hosting foreign groups. As part of the program we will create relevant materials that highlight the strengths of the region which will be made available to all stakeholders in the cluster. The steward will provide HHS-specific content to municipal, provincial and federal economic development groups and missions. The steward will also monitor, benchmark and incorporate best international practices into building the connection program in the Toronto region. Analogs/examples: The province of Quebec s Economic Development agency has created an infrastructure of people in Quebec and a network of foreign offices within major clusters, which bring delegations and opportunities to the region regularly in a sector specific manner, focused on seven sectors including Life Sciences. Cluster organizations and economic development groups throughout Europe -- BioCat and Accio in Catalonia are examples -- have created programs the proactively create connections and 42

46 outreach to international groups. They have developed relationships with many regions Europe and abroad through sector specific partnerships like BioXClusters, which support internationalization of companies from four countries in Europe to other geographies. Medical Alley/Greater MSP regional economic development group in Minneapolis has created an organized referral service which makes 10,000 referrals a year to a variety of groups within MInneapolis and create interaction opportunities for groups outside the region with groups in MInneapolis medtech community. Deliverables: Creation of a job description/program and identification of a suitable FTE for the stewardship role An understanding of best practices from other jurisdictions Creation of additional sales resources for the Toronto region, including a complete listing of Global partnerships already in place here. Tracking of metrics key to economic development: value and number of partnerships, profile of contacts made/received (global companies, investors, clusters), mandates and outcomes of meetings held, outbound and inbound visitation and missions supported, referrals, distribution of sales tools 4. HHS Venture Fund: A government-catalyzed, industry matched and administered venture fund specifically focused on Health Sciences. Description: The success of too many companies in Toronto s HHS sector is constrained by insufficient access to clever capital funding that helps transition promising ventures from the proof-of-principle (POP) stage to Series A.This problem is compounded by the fact that the life sciences and biopharmaceutical commercialization time horizon is long and the success probabilities are low. Toronto s HHS sector needs a dedicated HHS Venture Fund, a government-initiated funding vehicle specifically focused on this sector and the needs of its companies at every stage of their financing lifecycle. The fund would be anchored by a foundational investment from the Governments of Ontario and Canada that would, in turn, unlock additional private sector investment of at least 5x. It is important to emphasize that there is a precedent for dedicated, cluster- or sector-oriented venture funds in Canada, including the federal government s Automotive Innovation Fund - which provided $250 million over five years to support large automotive firms in their research and development projects focused on innovative, greener, more fuel-efficient vehicles. This program helped to build the automotive R&D capacity in Canada and encourage companies to promote and support their Canadian R&D operations. 43

47 The fund will have a selection panel that includes experienced and knowledgeable investors with a deep understanding of the HHS sector. The creation of such a fund would significantly support the region s ability to capitalize on our identified technology opportunities, including creating and supporting growing companies in the areas of Regenerative Medicine, Imaging and Digital Health. With an existing significant investment and successes in the region in these areas, attraction of further private capital and expertise will be accelerated. Deliverables: Engagement with partners to create a better understanding of the existing risk capital ecosystem in the Toronto region/ontario/canada An understanding of best practises and other dependencies which would come into play with the creation of an HHS Venture Fund Identification of a Cluster lead for this Tactic and strategic workplan for implementation of an HHS Venture Fund, if such were to be created 5. Commercialization Connection Program and Fund: Resources and streamlined application processes to help local outposts of leading MNEs secure a new wave of investments, partnerships and alliances that align with HHS cluster strengths. Description: As recent history has shown, local companies that secure even modest initial investments in partnership with their global colleagues are often more likely to follow an inaugural commitment with much more significant follow-on investments. Janssen Canada offers one compelling example. We propose to create a Commercialization Connection Program supported by a fund that offers both dedicated financial resources and a streamlined application process to help local outposts of leading MNEs secure a new wave of investments, partnerships and alliances reflecting the assets and opportunities that exist across Toronto s HHS cluster. We will develop the program program in collaboration with MNEs in the region, commercialization organizations and universities. The consortium will target a number of specific opportunities brought forward by partners and develop strategies to execute and bring the opportunities to a close. The consortium would also facilitate the scouting for further opportunities, perhaps in concert with the International Connection program. The Fund could be embedded under the Jobs and Prosperity Act, and will be used by companies looking for the matching funds often required to unlock net new international investments or expanded global research mandates. By creating a dedicated fund, the Ministry of Economic 44

48 Development and Growth and its ministerial partners would signal to leading global companies that Ontario is committed to helping their Canadian affiliates expand and deepen their local footprints. Analogs/examples: In 2015, Janssen Canada the pharmaceutical arm of Johnson & Johnson partnered with the University of Toronto to create the NeuroScience Catalyst Program. The program was designed to merge the collective skills and resources of academia and industry to enable collaborative, opensource, early-stage research in an effort to identify and validate new therapeutic targets. U of T funds the research and creates a structure for soliciting and evaluating proposals from researchers both within the university and throughout the leading research hospitals across the region. A Joint Steering Committee evaluates the proposals, and winning researchers benefit from both funding (up to $250,000) and access to additional R&D resources from Johnson & Johnson Innovation. Planning for the NeuroCatalyst brought leading scientists and executives from across Johnson & Johnson Innovation to the Toronto region on multiple occasions, including the global head of the company s innovation accelerator, JLABS. As connections and discussions blossomed, Janssen Canada was able to leverage a critical mass of partners including the MaRS Discovery District, the University of Toronto and the Government of Ontario to secure the support and resources required to create JLABS@Toronto, the first JLABS to be created outside the United States. Companies like Leo and Roche have also secured global mandates for their Canadian headquarters, and the cumulative result has helped Toronto s HHS cluster to achieve global prominence. Deliverables: Engagement of the ecosystem, Identification of a lead for the initiative and creation of a strategic work plan Identification of a shorter term and longer term list of opportunities and a process to connect these to JPF funds 6. Health Technology Integration Program and Fund (HTIPF): A program further leveraging and optimizing public sector procurement to accelerate the absorption of innovation into the healthcare system. Description: Ontario can pioneer a procurement model that accelerates market adoption and diffusion across the province. In conjunction with the Office of the Chief Health Innovation Strategist (OCHIS) and its linkages to the Ministries of Health and Long-Term Care; Research, Innovation and Science; and Government and Consumer Services this new model can help ensure that that Ontario patients are benefiting from Ontario discoveries and technologies. The Health Technologies Fund (HTF) run by the office of the OCHIS, administered through the 45

49 Ontario Centres of Excellence is dedicated to supporting the development of made-in-ontario health technologies and accelerating adoption and diffusion into the health system. Applicants for the program must be collaborations between a publically funded health service provider, an Ontario based health technology company, and academic researchers. While the HTF program has already become extremely valuable to Toronto s HHS ecosystem, the sector will consider a Health Technology Integration Program and Fund (HTIPF) specifically designed to accelerate the adoption of developed technologies that have already achieved regulatory approval and have the clinical data or Real-World Evidence required to support their use. The HTIF could also use the frameworks developed for social impact bonds (such as the initiative recently unveiled by the Heart and Stroke Foundation) to tie payment more closely to measureable health outcomes, and in so doing inject a component of pay for performance alongside these new interventions. Unlike the HTF, the HTIPF will be most beneficial to Toronto region innovations, but overall will be open to leading interventions that have proven their impact, efficacy, efficiency and value-for-money in comparator jurisdictions around the world. The program requires further developing the requirements and structuring activities based to understand and fill the gaps in existing programs. To do this, we will convene a dialog across ministries and industry stakeholders such as local SMEs and MNEs. We will also engage with similar jurisdictions around the world to understand and learn from best practises. If executed effectively, this tactic will build upon our clusters strengths in all therapeutic areas and drive growth of local medical device, digital and genomics technologies as these are most likely to look for and benefit from a local market before exporting globally. Analogs/examples: MaRS EXCITE is a program designed to collect Real-World-Evidence and complete an economic evaluation of technologies looking to be integrated into the healthcare system in Ontario. This is an industry led program, and may be one of the initiatives to champion development of further infrastructure and resources to accelerate adoption of technologies. WIHV, a program of Women s College Hospital acts as an intermediary between innovations and the hospital, evaluating the impact of technologies in real time within the hospital and with external parties. The expansion of this kind of program could also constitute an embodiment of the above. Health Innovation Manchester is an organization created in order to accelerate the integration of innovations into the healthcare system. We will benchmark systems such as this from outside the cluster to incorporate best practices. 46

50 Deliverables: Engagement of the ecosystem, identification of a lead for the initiative and creation of a strategic work plan 7. Health Data Integration and Access: A plan that prepares the Toronto region to utilize healthcare data to drive better health outcomes and greater economic benefits. Description: Ed Clark s report on the Value and Opportunities Created by Ontario s Digital Health Assets provides an important basis for further policy and action. The HHS cluster is powerfully positioned to take steps that will prepare us to utilize this resource, enhance integration and improve access to relevant groups. The Data and Analytics technology opportunities discussed earlier could be harnessed and brought to bear. One possible embodiment of this recommendation is expanding and enhancing the ConnectingG- TA integration hub that links patients and providers within the 6 Local Health Integration Networks in and around Toronto. The hub could to become a more effective, accessible, and robust tool for researchers, policymakers and entrepreneurs (with all appropriate privacy and confidentiality protocols). We will further convene a coalition of groups interested in contributing to this recommendation and solicit input into best ways forward. The work will be conducted in concert with experts from universities, ministries including MOH, OCHIS and MEDG as well as private sector partners. Analogs/examples: The Movement Disorders Clinic at the University Health Network (UHN) demonstrates the potential of public-private data collaborations. UHN has partnered with the Ontario Brain Institute and IBM s Watson for an exploratory project using the 31 million sources of relevant literature to identify readily-available drugs that could be repurposed to treat Parkinson s disease. This type of industry partnership to use machine learning to further health research should be encouraged through dedicated support of big data initiatives. Another home-grown example that should serve as a useful analog is the Ontario Health Study. This large-scale study has been collecting data on Ontarians health since 2010 and has now compiled survey data from 230,000 respondents. It has now begun collecting physical measures and biological samples. There are currently over 320 scientists and clinicians across the province using the data to explore a wide variety of health issues. As one researcher explained, this study offers an almost unprecedented opportunity to impact health care across a broad range of disease processes, on a Canadian and truly international level. 47

51 While this study has managed to collect a significant amount of data, Ontario continues to lag behind other provinces in its adoption of genetic testing as part of our overall healthcare system. Given Toronto s uniquely diverse population, the genetic data that could be generated here would be an incredible asset to large-scale health research. Furthermore, it could be used provincially by those looking to optimize health care decisionmaking across Ontario. Deliverables: Engagement of the ecosystem, identification of a lead for the initiative and creation of a strategic work plan Review and alignment with the recently-released recommendation from Ed Clark and OntarioMD 8. Executive Access Initiative: A targeted programs that help scaling companies access C-level executives with specialized skills. Description: In order to ease these human capital bottlenecks, Toronto s HHS cluster will create the Executive Access Initiative a new flagship entrepreneurship program that canvasses start-ups and SMEs. It will identify the most acute skill and knowledge gaps, develop a deep roster of experienced and accessible mentors and advisers from within the region and from outside the region (including Canadian ex-pats located abroad) and help broker part-time C-level assignments. By specifically addressing the needs of HHS entrepreneurs and by creating an opportunity to embed experienced advisors within high-potential companies on a part-time basis this program will complement and supplement existing Entrepreneur-in-Residence (EIR) program run by the MaRS Discovery District and the new Innovation Broker initiative launched by the Office of the Chief Health innovation Strategist (OCHIS). The advisors recruited to support these companies will also be engaged to hold education and information sessions designed to increase the cluster s technical subject foundation (particularly in areas such as regulatory affairs and health technology assessment), where many companies could use significant support. Analogs/examples: Entrepreneur-in-Residence (EIR) program run by the MaRS Discovery District and the new Innovation Broker initiative launched by the Office of the Chief Health innovation Strategist (OCHIS) are two examples of programs already existing in the ecosystem. A further supplement to these programs, including a targeted approach to the top talent located outside the region will be included in the initiative. 48

52 Deliverables: Engagement of the ecosystem, identification of a lead for the initiative and creation of a strategic work plan A study including a skills gap inventory and requirements in the region as well as best practices from other clusters to support benchmarking and planning 49

53 The Path Forward 50

54 The Path Forward The eight tactics outlined in the preceding pages are collectively intended to help Toronto s HHS cluster raise its profile both at home and abroad, expand access to risk capital, attract and expand the local footprint of multinational enterprises and attract experienced entrepreneurs to (or back to) the region. Some initiatives can be implemented over the coming budgetary cycle, while the others will require further research and planning before launch. Moving forward, TOHealth! and its cluster partners will be focused on three core mandates: 1. Launching a Core Set of immediate Projects. At least three of the recommendations captured above are ready for immediate action with work on some already well underway: developing an Integrated Cluster Inventory; hosting World-Class Conferences; and creating a Dedicated Program to Expand Global HHS Connections. TOHealth! and its partners will focus on accelerating the momentum behind these ideas and ensuring they have the resources and support required to successfully launch. 2. Refining and Enhancing Longer-term Projects. From a Health Technology Integration Program to HHS Data Access and Integration to creating a HHS Venture Fund, a number of the recommendations in this plan have been deliberately selected to catalyze debate and discussion and generate opportunities for additional research and refinement. TOHealth! and its partners will work diligently to develop detailed implementation plans for those more nascent recommendations. 3. Engaging with key strategic and funding partners. Working through both its HHS Committee and the broad group of cluster leaders whose insights are captured in the pages above, TOHealth! will communicate the cluster plan to public and private sector leaders across the region. Particular emphasis will be placed on engaging with a broader set of ministries across the Government of Ontario beyond MEDG, and working closely with both FedDev and Innovation Science and Economic Development Canada as well as leading municipal government allies and advocates from across the region. The greater Toronto region is already home to what we believe to be an HHS Supercluster, defined by exceptional researchers, world-class innovation institutions and an impressive array of early stage and global companies. All stakeholders including government at all levels must (continue to) recognize this cluster s magnitude and potential. The initiatives and ideas contained in this plan are intended to build on that exceptional foundation to help the cluster achieve its goal of becoming top 5 in 10 years. 51

55 Endnotes 1 The Triple Helix Model for Innovation, Michael E. Porter, Collaborating for Growth: Opportunities for Ontario, Ontario s Panel on Economic Growth and Prosperity, December Note: The geographic scope of the Toronto Region human health and sciences cluster mirrors a global definition of the region. It includes the City of Toronto, Durham Region, York Region, Peel Region and Halton Region. 4 LSO Sector Report, On Competition, Michael Porter 6 Collaborating for Growth: Opportunities for Ontario, Ontario s Panel on Economic Growth and Prosperity, December LSO Sector Report, Ibid. 9 TO Health! website 10 University of Toronto, Faculty of Medicine website 11 University of Toronto, Faculty of Medicine Research Annual Report, CAHO Hospitals Year in Review, Sector_One_Pagers_Life_Sciences_English.pdf 14 City of Brampton website mississauga-strengthens-life-scien es-sector/ 16 Building a Life Science Cluster: A Case for Hamilton. Hamilton Chamber of Commerce, Martin Prosperity Institute, January Transforming Healthcare, Government of Ontario budget, Data derived from Statistics Canada, 2015 (latest available) 20 Data derived from Statistics Canada, 2015 (latest available) 21 The Cluster Initiative Greenbook, Sulvell, Lindqvist, Ketels 22 The Triple Helix Model for Innovation, Michael E. Porter, University of Toronto, Laboratory of Medicine and Pathology website 24 OICR - Annual Report Ontario Cancer Plan IV Neuroscience industry briefing, a review of Ontario s R&D excellence with a focus on aging. MaRS Neuroscience industry briefing, a review of Ontario s R&D excellence with a focus on aging. MaRS Preventing and Managing Chronic Disease: Ontario s Framework Mergent. North America: Medical Equipment Sectors. Fort Mill: Mergent, Inc. March investinontario.com 32 ibid Life Sciences Ontario report 35 Scarpetta, Stefano The Sources of Economic Growth in OECD Countries. Paris, France: Organisation for Economic Co-operation and Development 36 ICP, ICP, OBIO, Institute for Clinical Evaluative Sciences, OCC report, DEEP, OBIO,

56 APPENDICES APPENDIX #1: TACTICS FOR PRIORITIZATION (ROUNDTABLE PRE-READ) The Toronto region is home to the largest geographic concentration of health sciences assets in Canada and strong connections to global centres of health science expertise. This convergence has created a thriving HHS cluster with incredible potential for growth and investment. The cluster is comprised of private and public organizations including pharmaceutical, biotechnology and medical device companies, health IT and digital health companies, hospitals,colleges, universities, community labs, innovators,investors, manufacturers, research organizations, incubators, service providers andmunicipal/regional economic development groups.through the work of the many groups in the ecosystem, four gap areas have been identified for the region s cluster: 1. Branding and promoting of the cluster on a global scale 2. Attracting number of executives and entrepreneurs with experience starting and scaling companies 3. Better utilizing and leveraging of our health science assets 4. Expanding and attracting more public and private investment To address these four gaps, we have grouped the following set of recommendations around four accompanying themes: (1) Marketing the Cluster; (2) Attracting Talent; (3) Leveraging our Assets; (4) Growing Funding and Investment These recommendations are drawn from working group summaries and formal reports generated by TO Health!, the Ontario Bioscience Innovation Organization (OBIO), LifeSciences Ontario (LSO), the Ontario Chamber of Commerce, the Toronto Region Boardof Trade (TRBOT), and other collaborators and stakeholders across the region. MARKETING THE CLUSTER 1. Develop a detailed, integrated cluster ecosystem asset map that provides adescription of the elements of the current cluster. This asset map would showhealth science resources across the cluster and help to show the organizations and activities occurring within the cluster. It would include companies, investor networks, technology and commercialization incubators and accelerators, researchers, collaborative organizations, and more. It would be accessible globally in order to attract international investment, but also be useful to the local audience for regional visibility. This builds on 53

57 work of key partners by assembling all the relevant information in one easily accessible place. 2. Create an integrated program to inventory and leverage opportunities provided to companies in the region. Building on existing work done by key partners, this inventory would be used as a resource for companies, this inventory would cover programs across the entire commercialization pathway with a particular focus on early and expansion stage companies. This inventory would be kept current and cover all the funding opportunities, partnership programs, and tax credits available to stakeholders in the Toronto ecosystem. 3. Attract major existing international trade shows and conferences to Toronto. Hosting these events in the cluster will put a spotlight on the unique assets of the region. Potential events to target could include Advamed, EBD or other biotech partnering events, HIMSS (Healthcare Information and Management Systems Society) Conference and ISSCR (Regenerative medicine conference). To be successful the stakeholders must work closely with municipal and regional partners to ensure that the physical infrastructure it needs to successively compete for large-scale events. 4. Organize a recurring Human Health Sciences event in the Toronto region. By hosting a recurring large Health Science event, the cluster will have an ongoing opportunity to raise its profile and for cluster members to make connections outside of the area. An event of this nature would also allow the cluster and its members to be showcased, create further opportunities for interaction with funders, corporations and governments and highlight the leadership of the Toronto region and the business opportunities resulting from our healthcare sector. 5. Create a full-time position/program for foreign engagement and partnership building for the region. The program will have at least one full time individual responsible for raising the profile of the cluster internationally by working with other cluster groups, building relationships for the region in other regions, service international companies looking for partners in the region as well as create services for our companies to connect with international players. They could also help execute on other recommendations with an international focus. 6. Create a tour guide program to invite and host multinational groups who are looking for opportunities in the Toronto region. This formalized program would provide the necessary structure to show the cluster in the best light when interested groups such as Global executives from Pharma companies who are visiting Toronto (right now, anecdotal evidence suggests there are at least ~6-8 requests a month for this service). The program would incorporate many different elements that could be tailored to the visiting group s particular interests, such as specific meetings with researchers in a particular field, etc. The goal would be to design a visit that is anchored by a deep understanding of what each delegation is looking for and building events and selecting attendees accordingly. 54

58 7. Create turnkey sales packages for the various ambassadors who are thought leaders from Canada, to use when they are presenting at international health events. Slides pre made for a dozen different contexts, with logos, collateral to give away, brochures, signatures for our , Tweets, etc. This will present a unified voice and narration for the region. ATTRACTING TALENT 8. Create a specialized visa program to attract experienced international employees. Potentially operating under the International Mobility Program, this program could be similar to the Senior Executive (Provisional) Visa in Australia and the CONNECT Springboard program in San Diego. Canada is pioneering a program along these lines for start-up founders that could perhaps be expanded. 9. Create a wage subsidy program for companies hiring new graduates. Ontario science graduates between the ages of 20 and 24 with an undergraduate degree face an 18.9% unemployment rate. A wage subsidy program similar to the federal Career Focus program can provide financial incentives for companies to hire new graduates or provide professional internships and apprenticeships that are integrated with higher education. This type of program will help efficiently transition science graduates into their first career-related positions. A related goal would be to find opportunities to get talented, early-career sector leaders concentrated, real-world experience beyond an unpaid internship. 10. Create an executive mentorship exchange program. This program would include mentorship, peer-topeer networking and education. Using existing networks to educate and support the growth of individuals in Toronto, the program would help foster the next generation of successful entrepreneurs. 11. Identify and bring Canadian ex-pats based around the world to Toronto. Incentives for individuals who have grown companies and have management experience will help draw these highly successful people to Toronto. By tapping into individuals already familiar with Canada and our unique environment, the program is likely to have a higher rate of success at reaching individuals willing to invest their effort into Toronto s ecosystem Create a Shared CEO/CFO/COO program. Several small companies in the human health sciences sector in Toronto would collectively pay to hire one individual with extensive management experience. This senior leader would be able to advise the partner companies through multiple phases of their growth. By pooling their resources, the companies would be able to attract more experienced individuals while lowering their individual cost. Lessons could be gained from similar programs in Canada and abroad. 55

59 LEVERAGING OUR ASSETS 13. Leverage public sector procurement to accelerate the absorption of innovation into the healthcare system while supporting the development of local firms. Ontario should pioneer a reimbursement model that accelerates reimbursement and market adoption while linking payment levels more closely to measurable health outcomes. Supporting procurement reform would not only ensure that Ontario patients are benefiting from Ontario discoveries but also attract health innovations from other jurisdictions. These goals mirror the mandate of Ontario s Chief Health Innovation Strategist and strengthening that office and expanding its mandate to include a wider range of health technologies would help accelerate its impact on the broader system. 14. Offer training sessions for hospital executive management on design and innovation. These training sessions would help the individuals involved to better understand the value of innovative procurement. By engaging individuals at the management level and showing them the potential to bring Ontario innovation to Ontario patients, you could raise the likelihood of the implementation of this type of procurement. 15. Create a Business Model Innovation R&D Centre. One challenge impacting the cluster is the lack of established and pressure-tested business models for buying/financing innovative technology. Instead, we have fixed payment models that simply don t work in the 21st century. Although there are promising developments in the world of procurement, business model innovation has to be a complementary area of focus. One specific example would draw on the Smal Business Innovation Research Program (SBIR) in the US, which encourages domestic small businesses to engage in Federal Research/Research and Development (R/R&D) that has the potential for commercialization. 16. Create a data-driven cluster that better integrates diagnostics and therapeutics. Ontario s lab system is currently undergoing significant reforms, but it remains to be seen whether the changes being considered will significantly support the advent of precision or personalized medicine as promised by the latest wave of molecular diagnostic tests. We should create a program to take advantage of the strength in the region for development of diagnostics and create a pilot program for integration of molecular diagnostics and personalized medicine testing. 17. Prepare the GTA region for convergence medicine and precision medicine. We need to commit to turning Ontario into Canada s leader in compiling, analyzing and leveraging the power of big data for health at a time when, as one HHS leader put it, Ontario is considerably lagging other provinces in its adoption of genetic testing as part of the overall care stream. The sector needs programs to provide a structure for investment in electronic medical records, patient databases and big data analytics that are inclusive, expansive, integrated and both accessible and affordable to industry. A common data asset 56

60 could be used not only to optimize health care decisions in Ontario but also as a platform for building products for the rest of Canada, leveraging the Toronto region s strengths in deep learning/machine learning and in mobile applications in health sciences. 18. Modernize the Ontario lab sector to better integrate diagnostics and therapeutics. Ontario s lab system is currently undergoing significant reforms, but it remains to be seen whether the changes being considered will significantly support the advent of precision or personalized medicine as promised by the latest wave of molecular diagnostic tests. Create a program to take advantage of the strength in the region for development of diagnostics and create a pilot program for integration of molecular diagnostics and personalized medicine testing. 19. Utilize Toronto s diverse population and electronic health records to drive research and clinical trials. Toronto has a large and diverse population that can be used as a unique asset. Further, the standardized OHIP medical records from this population create a volume of data that enables research in small populations of patients. This combination of assets has the potential to drive research and clinical trials in rare diseases and be a significant resource for the cluster. 20. Create an Investor Incubator program. Similar to an Innovation incubator, create a space and programming to support investors who are located or who are coming through the Toronto region. The program would provide a platform for identifying opportunities and creating syndics between groups with services like temporary office and meeting space for investors, networking events and opportunities for investors to meet one another as well as companies. GROWING FUNDING AND INVESTMENT 21. Create targeted tax credits that incentivize R&D between industry, universities, and public institutions. An example of a program that encourages collaboration is the Binational Industrial Research and Development (BIRD) model operated between the US and Israel since The program allows two high-tech companies, one registered in the US and one in Israel, to apply jointly for BIRD funding to support product development and commercialization costs. Proposals often come from firms of different sizes, allowing SMEs to gain the advantages of the sales and service expertise of the larger firm. 22. Reinvigorate SR&ED by allowing firms to instead choose a refundable R&D wage tax credit in order to help attract and retain talent. Ottawa should open the program to foreign firms who establish or expand their commercial development research in Canada and make the application process more predictable and easy to navigate. 57

61 23. Expand the availability of refundable tax credits beyond research to encompass the entire continuum of invention to commercialization. Lead the dialog to direct tax policy to focus on creating a balanced and competitive tax environment across the entire innovation value chain, from initial R&D through commercialization to the development and production of new products and services. Expand the scope of R&D credits to later stage development activities. 24. Create a flow-through share approach that allows firms to pass along tax deductions to their investors. This structure helps to mitigate the risk that that investors are taking on when they support innovative ventures and would help incentivize investment. Given that the start-up firms in the health sciences have no taxable income for many years, the benefits of extending flow-through shares to this sector will be substantial. This is a system currently used by the mining and extraction sector in Canada. If it were to be extended to the Health Sciences sector, the guidelines for SR&ED tax credit may need to be revised. 25. Adopt and expand the British Columbia Angel Investor Tax Credit. BC provides a 30% refundable tax credit to investors who invest up to $200,000 into eligible businesses (a maximum of $60,000 in credits per investor holding the principal for at least five years). This change could lead to greater tax revenues, more jobs, and capital leverage for companies. The program would support angel investors who provide patient capital and in turn be of particular benefit to health science entrepreneurs, a sector where the average development cycle lasts 17 years. 26. Restructure the Venture Capital Access Plan (VCAP). The Government of Canada should encourage local institutions such as pension funds, banks, and telecommunications firms to include small, high-risk innovation portfolios in their investments. These changes could encourage organizations like the Ontario Teachers Pension Plan and the Ontario Municipal Employees Retirement Savings Plan (OMERS) to invest in ventures in the health sciences sector. In order for this plan to have an effect, the VCAP would need to be renewed in Create a federal sector fund for the Health Sciences. Similar to the Automotive Innovation Fund and the aerospace initiative and along similar lines to the core recommendation of the 2015 Naylor Report this fund would be structured to recognize the various stages and sizes at which companies require investment, all the way from research to adoption. 28. Allow charitable foundations to invest in companies. By allowing charitable foundations, especially those that have a specific disease focus, to invest in companies, foundations can contribute to an expanding pool of available capital. These investments are already common practice in the US. However, in order for charitable foundations to make these investments, there would need to be changes to the Canada Revenue Agency regulations. 58

62 29. Consolidate government funding programs and simplify application and review processes. At the provincial level alone, funding and other resources are scattered across multiple divisions at multiple ministries (including, but not limited to, MOHLTC, MRI, MEDG). Better coordinating and integrating those programs and creating a single unit dedicated to helping companies and collaborators navigate them would be significant. 30. Establish an industry-led research funding program. Using the CQDM program of Québec as an example, this program would support early stage research that industry leaders feel would make a health system and commercial impact. The funds would help catalyze research projects while the IP would stay with researchers and respective institutions. 59

63 APPENDIX #2: BIBLIOGRAPHY FOR ROUNDTABLE PRE-READ Deloitte: (2105) Global health care outlook Common goals, competing priorities Hamilton Chamber of Commerce, Life Sciences Sub-Committee. (2014). Building a Life Sciences Cluster: A Case for Hamilton Institute for Competitiveness and Prosperity. (2016). CLUSTERS IN ONTARIO: Creating an ecosystem for prosperity Jones Lang Lasalle. (2015). Life Science Outlook United States 2015 KHJ. (2014). Toronto Region HHS Cluster Initiative Brand Identity Presentation KHJ. (2014). Toronto Region Human Health Sciences Cluster Positioning platform KPMG. (2016). Site Selection for Life Sciences Companies in Europe Life Sciences Ontario. (2015). Life Sciences Ontario Sector Report 2015 Ontario Bioscience Innovation Organization. (2016).How Canada should be Engaging in a $9 Trillion Dollar Health Economy Ontario Chamber of Commerce. (2016). Part III of the Ontario Chamber of Commerce s 2016 Health Transformation Initiative Ontario Chamber of Commerce. (2016). PRESCRIPTION FOR PARTNERSHIP: How New Models of Collaboration in Health Care Can Make Outcomes a Priority Ontario Chamber of Commerce. (2016). TRANSFORMATION THROUGH VALUE AND INNOVATION: Revitalizing Health Care In Ontario Ontario Health Innovation Council. (2014). THE CATALYST: Towards an Ontario health innovation strategy Toronto Board of Trade (2012) Life Sciences Cluster: Background Material Toronto Board of Trade. (2013) Minutes of the working group meetings held June 24-25, 2013 Yaletown. (2016). Canada s Technology Investment Gap Unlocking the sector s key growth opportunity 60

64 APPENDIX #3: ROUNDTABLE DISCUSSION SUMMARY On October 4 and 5, TOHealth! convened and hosted two roundtables that brought together more than 50 sector leaders. Attendees ranged from multinational executives, government policymakers, and investors to startup entrepreneurs, university tech transfer leads and association representatives. The group came together to engage in a robust conversation designed to help identify a core set of strategies and tactics with the collective potential to move our local HHS cluster to one of the world s top 5 over the next decade. The prioritized ideas and initiatives that emerged across the two days of discussions would then be integrated and improved and shared with municipal, provincial and federal policymakers with a shared commitment to advancing Toronto s HHS sector as part of a structured CLUSTER ACTION PLAN The discussions built on approximately 30 recommendations that had been shared with attendees in advance. As the discussants analyzed and assessed the recommendations an ongoing process supported by a follow-on on-line survey a number of key themes, conclusions and questions emerged: 1. WITH IMPORTANT FOUNDATIONAL POLICY WORK ALREADY DONE, IT S TIME TO GET OPERATIONAL The discussions that occurred at both Roundtables underscored one of the key conclusions that emerged from the background research TOHealth! conducted earlier this fall: there is no shortage of compelling policy ideas and recommendations focused on how best to improve the region s HHS cluster and the broader provincial and national health innovation landscape. From the Ontario Biotechnology Industry Organization (OBIO) and the Ontario Chamber of Commerce (OCC) to Life Sciences Ontario (LSO), the MaRS Discovery District, the Toronto Region Board of Trade and the Martin Prosperity Institute at the University of Toronto, a wide range of inclusive and innovative organizations have been engaged in answering a shared set of key policy questions. Extend the frame beyond the province s borders and the list grows to include groups like BIOTECanada, the Advisory Panel on Healthcare innovation (chaired by Dr. David Naylor) and Innovative Medicines Canada. The goal of the two roundtables was to provide leaders from across the region s HHS community including representatives from many of the groups listed above with an all-too-rare opportunity to come together in person to review, refine and combine ideas from multiple sources, with a goal of developing a core set of prioritized actions and initiatives. Roundtable participants emphasized that many of the building blocks to an effective and impactful cluster plan is already in place; the opportunity lies in identifying concrete actions that build on the robust foundation that already exists. 61

65 2. THE RIGHT CRITERIA WILL DRIVE THE BEST RECOMMENDATIONS Any prioritization exercise is only as good as the filters it uses. With this in mind, Roundtable attendees assembled a core set of key questions that could be used to narrow a laundry list of possible tactics to a manageable set of potential initiatives, including: How impactful will the idea be? How feasible will it be? How expensive will it be? How long will it take? How big is the gap or the opportunity? Can we move the needle locally? Can we engage local senior-level supporters for an ambitious enough goal? Will a critical mass of leader coalesce around the idea? Are we starting from scratch or has foundational work already been done? Will the broadest swath of the sector benefit? Is there a bite-sized role for TOHealth to play? Will the ideas align to the established and emerging policy priorities of the municipal, provincial and federal governments? Is there a role for government to play? This last criteria question reflects a powerful consensus in the room on both days: that the interest and engagement of all three orders of government in the development of the cluster and its future prospects had never been higher. Participants also noted that the tactics chosen should include both short-term, more incremental actions that could result in early wins for the cluster and some moon shots for which we could plan and prepare and that would make the largest impact in the longer-term. Participants also noted that some of the tactics under discussion were already getting underway, and that it would be imperative to ensure that any new initiatives catalyzed by TOHealth! complemented and reinforced the important work already underway. 3. FEDERAL AND PROVINCIAL PARTNERS WILL CATALYZE A TORONTO HHS STRATEGY Passed in 2015, the Government of Ontario s Partnerships for Jobs and Growth Act is designed to strengthen connections between businesses, research institutions, governments, and other organizations to make Ontario s industries 62

66 more productive, innovative and globally competitive. 1 A cornerstone of this legislation is a sustained commitment to economic clusters, with a particular focus on creating plans that will enhance the global competitiveness of the province s cornerstone clusters. From the discussions that TOHealth! led earlier this month, it became clear that Toronto s HHS cluster has the assets, the reputation and the growth trajectory to place it firmly on the radar screen of the Ministry of Economic Development and Growth. At the same time, the Government of Canada s push for a new Innovation Agenda is picking up steam. One of the six Areas for Action identified by Innovation, Science and Economic Development (ISED) identifies the need for Canada to develop World-leading Clusters and Partnerships, defined as Superclusters for business innovation and global reach, from idea generation to value creation. 2 Ottawa s efforts are intended to accomplish four core goals: 31. Build critical mass and enhance commercialization outcomes 32. Create self-sustaining technical centres of excellence and strengthen value chains 33. Bring the best talents and capabilities from the public and private sector 34. Proving ground for cutting-edge technology testing and application At the same time, FedDev Ontario the federal body dedicated to expanding and accelerating the Ontario economy has identified 12 cornerstone existing and emerging clusters, including Regenerative Medicine, Biopharmaceuticals and Big Data Analytics. As FedDev itself states in a recent presentation, Southern Ontario is the hub of the Canadian biotech industry in Canada - over 140 Biotech companies, 21 research institutions, and 112 manufacturing facilities in southern Ontario. More than 58% of Canada s R&D spending on life sciences occurs in Ontario. 3 Factor in the recent release of the first few recommendations of the Advisory Council on Economic Growth and it s clear that the Trudeau Government s embrace of innovation and the knowledge economy has only begun. The resources and commitment of the federal government will be indispensable to the long-term viability of Toronto s HHS cluster and roundtable attendees were united in their push to ensure that the cluster action plan emerging from this consultation process should also be shared with ISED Minister Navdeep Bains and his senior staff An Inclusive Innovation Agenda: The State of Play. ISED slide deck, June 12, The Regenerative Medicine Cluster in Southern Ontario. FedDev slide deck, October 13,

67 4. CAPTURING AND LEVERAGING OUR EXISTING ASSETS IS ESSENTIAL The Roundtable discussions were deliberately designed to focus participants on the region s impressive assets not its challenges or issues. Attendees rose to the challenge by identifying a number of notable areas of therapeutic and institutional strength that should serve as the foundation for any forthcoming cluster plan. Four cornerstones of our future success were identified multiple times on both days: THE UNIVERSITY OF TORONTO As Canada s leading research university and home to thousands of research scientists and multiple incubators and accelerators U of T has the size and scale to simultaneously invent and innovate within and across multiple disciplines. The University also possesses a strong global reputation and an extensive network of alumni across the country and around the world both significant assets to leverage. OUR RESEARCH AND TEACHING HOSPITALS One of the roundtables in particular spent a considerable discussing the pivotal role played by the region s academic health sciences centres. Although other world-leading HHS clusters have been catalyzed by the creation and expansion of an anchor company (think of Genentech in San Francisco or any number of Boston-based biotechs) Toronto may be better served viewing hospitals as the anchor institutions with the ability to serve as linchpins of the local economy through their goal of making the region, in the words of one attendee, healthier, wealthier and smarter. OUR COMMERCIALIZATION HUBS Toronto s HHS cluster is home to an array of innovation intermediaries and research networks from the Centre for the Commercialization of Antibodies and Biologics and the Canadian Centre for Regenerative Medicine, to the Ontario Brain Institute, the Ontario Institute for Cancer Research and Ontario Genomics, to the MaRS Discovery District and MaRS Innovation. OUR CLINICAL TRIAL INFRASTRUCTURE Yes, their cost-effectiveness is under siege and yes, they re not as fast as some competing regions, but the quality of Toronto s clinical trials remains widely-acknowledged, and the global biopharmaceutical industry continues to look to the Toronto region as key source for late-stage research studies. Beyond these obvious assets, participants also identified industry or technology areas in which Toronto excels, including Regenerative Medicine, Imaging and Medical Devices and Data Analytics. At the same time, however, a number of attendees shared their frustration at the lack of a single, integrated, dynamic and up-to-date source of information about the cluster and its assets. 64

68 5. PRIORITIZATION IS CRITICAL BUT CHALLENGING Attendees discussed the importance of two complementary forms of prioritization: prioritizing assets, and prioritizing metrics. On the question of assets, it will be important for leaders across the cluster to begin identifying those finite and defined areas where Toronto s HHS sector can become truly world class (if it isn t already) and also those opportunities that will be deprioritized as resources and energy are directed toward alternatives that are more compelling or imminent or impactful. As one participant put it: When I lived in Halifax I knew what we were good at, and we all described that strength the same way. Now that I live here we keep trying to convince ourselves we re good at everything. Perhaps the best approach to this prioritization question came from the attendee who advocated for the utility of trying to answer one simple question: What can we execute on here better than anywhere else? On the subject of measurement, there was broad endorsement of TOHealth s overarching goal for the region: to become one of the world s top 5 HHS sectors within the next 10 years. What was less clear was how best to measure our collective progress toward this goal. Attendees at the Roundtables offered multiple relevant metrics to track the cluster s progress wages, jobs, investments, companies, patents etc. but it s clear that work remains on how best to benchmark the region and then define and measure our success over the medium-term. Despite these complexities, there was a broad consensus at both Roundtables that Toronto s HHS sector needs to feel comfortable identifying and investing in a subset of opportunities rather than dedicating too much money, time and energy to too many priorities. 6. THE UNIQUE CHARACTERISTICS OF THE HHS SECTOR REQUIRES DEDICATED CAPITAL AND EXPE- RIENCED PEOPLE Beyond marketing, the areas of challenge that most drove both discussions were capital and talent. On the financing side of the equation, there was broad alignment in the room round three core realities: 1. The sector doesn t have enough capital. This is especially true in the mid-late stages of commercialization, where the funds required are larger and the time frames are longer. 2. The sector doesn t have the right kind of capital. Many attendees noted the need for more patient capital or creative capital or specialized capital from investors with some combination of an increased appetite for risk, an investment horizon that extended out beyond traditional sources of funding and knowledge of and experience in the sector itself. 65

69 3. Some of the capital we do have is poorly deployed. A number of participants outlined the perceived weaknesses of the Venture Capital Action Plan (VCAP) and suggested that the entire ecosystem for raising capital was immature, too concentrated and too illiquid. A number of participants expressed the belief that the role of government in building the capital pool should be a catalyzing one, providing the kind of first in funds sufficient enough to attract significantly larger pools of capital from private sources. The capital challenge facing Toronto HHS cluster starts when traditional early stage investors stop. The solution? We need smarter programs to drive capital deployment. And since capital targets talent, in the words of one participant, both Roundtables also spoke about the importance of attracting and retaining experienced business leaders who have built and run companies. Beyond this need to expand and enhance the region s pool of serial entrepreneurs, attendees also spoke about the desire of many expatriate Canadians to come home and the need to better connect those who have left with emerging and maturing opportunities. Identifying and leveraging Canadian champions working in the world s leading HHS clusters and within the world s leading health technology and life sciences companies is an idea that resonated with many participants. 7. TORONTO S HHS CLUSTER WILL STRUGGLE WITHOUT MORE LOCAL MARKET PULL The Toronto region receives upwards of $1.2B a year. This funding supports thousands of researchers, universities, numerous hospitals and research centres, commercialization hubs and other innovation intermediaries. Together, these institutions generate an impressively deep and broad supply of innovation. The region is constipated with innovation, in the words of one roundtable participant. Unfortunately, Toronto and Canada more broadly is challenged by insufficient demand for innovation. All too often, policymakers and practitioners working in the worlds of economic development and health care operate in distant silos. This divide can be seen in the number of HHS start-ups struggling to lock down their first Canadian customer and the number of hospital, LHIN or provincial RFPs that disproportionately emphasize cost today over outcomes tomorrow. However, the arrival of Ontario s first Chief Health Innovation Strategist (OCHIS) and the decision to formally connect the office to the Ministries of Health and Long-term Care; Research, Innovation and Science; and Government Services is a powerful sign that the province is willing to explore harnessing the power of public sector procurement in service of both improved patient care and a stronger cluster. Roundtable attendees were united in their endorsement of the emerging momentum for innovative or value-based procurement, which has the tremendous potential to transform the way healthcare is delivered as well as support the growth of local, innovative companies and technologies. 66

70 8. THERE IS A MAJOR NEED TO BETTER MARKET THE REGION AND TOHEALTH! HAS A KEY ROLE TO PLAY One of the opportunities that most galvanized the group related to the need and the potential to better market the region. As one attendee put it, We need to get our story straight not just to the outside world but to ourselves. Marketing was identified as a pressing challenge by multiple speakers in multiple contexts; it was clear to both roundtables that the Toronto HHS cluster is continuing to weave together and communicate a compelling narrative about what we have and why it matters. A better story will require a number of core components. First, a clearer and more comprehensive sense of just what assets we possess as a cluster: What are we really good at? How do we know? Second, a much more integrated and robust approach to Brand Journalism described by one attendees as What have you done already, what were the strengths that drive that success, and what do you plan to do next? Third, a critical mass of world-class events that will attract national and global collaborators to the region on a regular basis. Picking up on these themes, attendees were clear in their view that marketing the cluster needs to take two forms: 1. Welcoming the World to Toronto. Attendees remarked that recent or upcoming delegations included groups from Boston, Korea, France, Germany, Brazil and India among others. Although the number of interested and engaged partners and investors finding their way to our door underscores the strengths of the assets outlined above, the success of these visits is undermined by at least two factors: insufficient coordination in the run-up to these visits, and insufficient follow-through when they re over. As one discussant aptly put it, we re pretty good at getting people here, we re good at selling Toronto when they re here but we re bad at stewarding the relationships. Or as another attendee suggested, we re lacking best practices in delegation management. 2. Taking Toronto to the World. Leading HHS clusters are scattered around the world, from Boston and San Francisco in the United States, to Cambridge in the UK and Singapore and Shanghai in Asia. Accelerating Toronto s regional development will require leading representatives of the ecosystem to engage with prospective partners on their home turf in a way that is more coordinated and more strategic than a current approach that saw representatives from multiple Toronto innovation intermediaries show stumble across each other in Boston earlier this fall. 67

71 Beyond the importance of better marketing the region, many roundtable attendees also identified TOHealth! as one of the organizations best positioned to fill this gap and in so doing help support the virtuous circle based on the notion that as we build our brand, we attract investment to augment our brand, the brand gets stronger and our voice gets louder and more effective. NEXT STEPS The Roundtable discussions were anchored by almost 30 potential policy recommendations that TOHealth! provided to attendees as a pre-read. After the Roundtables concluded, TOHealth! used the insights and themes outlined above and the direct feedback shared during the discussions themselves to revise and refine the recommendation list to 15 proposed initiatives (included in Appendix #4). Roundtable attendees and leaders from across the sector will now have the opportunity to review and prioritize this final 15 and their responses will form a cornerstone of a Cluster Action Plan that TOHealth! will be pulling together over the coming weeks. The ideas at the core of the plan and the inclusive and dynamic process that led to their assembly will be shared with the Government of Ontario and the Government of Canada, as well as municipal leaders from across the Toronto. TOHealth! hopes and believes that this work will provide policymakers in all orders of government with a concise and compelling array of options for actions that have been vetted and improved by the dozens of entrepreneurs, researchers, investors, advisors and executives who are dedicating their professional lives to supporting and strengthening the cluster. 68

72 APPENDIX #4: CLUSTER ACTION PLAN TOP 15 RECOMMENDATIONS FOR PRIORITIZATION MARKETING THE CLUSTER 1. Develop a detailed, integrated cluster inventory that includes an asset map of organizations in the cluster and programs and opportunities across the entire commercialization pathway. This asset map would show health science resources across the cluster and help to show the organizations and activities occurring within the cluster. It would also potentially cover all the funding opportunities, partnership programs, and tax credits available to stakeholders in the Toronto region. This resource would be accessible globally in order to attract international investment, but also be useful to the local audience for regional visibility. The development of this inventory builds on work of key partners by assembling all the relevant information in one easily accessible place. 2. Host high profile conferences in the Toronto region, including hosting a recurring Health Sciences conference and attracting existing major conferences. Hosting these events in the cluster will put a spotlight on the unique assets of the region and give the cluster an ongoing opportunity to raise its profile and make connections between companies, investors, ecosystem and healthcare leaders. To be successful, the stakeholders must work closely with municipal and regional partners particularly as it relates to the physical infrastructure needed to be successful in competing for large-scale events. 3. Create a full-time program for foreign engagement and partnership building for the region, including offering a tour guide program and creating a turnkey sales package. The person/people running this program would be responsible for raising the profile of the cluster internationally by building relationships with other regions and cluster groups and international companies. They would invite and host groups looking for opportunities in the Toronto region and develop a sales package to be used by members of the cluster in order for the region to be able to present a unified voice. 69

73 DEVELOPING AND ATTRACTING TALENT 4. Create programs to identify and attract experienced international employees and Canadian ex-pats. A specialized visa program, potentially operating under the International Mobility Program, would allow companies to hire employees with specialized experience. In conjunction to attracting international experts, attracting ex-pats will bring in individuals already familiar with Canada and our unique environment. This program could be similar to the Senior Executive (Provisional) Visa in Australia and the CONNECT Springboard program in San Diego. Canada is pioneering a program along these lines for startup founders that should be reviewed and potentially expanded. 5. Expand wage subsidy programs. Currently wage subsidy programs similar to the federal Career Focus program provide financial incentives for companies to hire new graduates and in so doing efficiently and effectively transition graduates into their first career-related positions and help companies attract and retain talent. However, demand for these programs far exceeds the funding for available positions and leaves too many early-career sector leaders struggling to find concentrated, real-world experience beyond an unpaid internship. 6. Create targeted programs that help emerging companies access executives with specialized skills. These programs would include mentorship, peer-to-peer networking, education, and executive sharing between smaller companies. Too many emerging companies are held back by insufficient access to either experienced managers or to specialized, technical knowledge from regulatory affairs to health technology assessments (HTAs) to pharmacoeconomics. LEVERAGING OUR ASSETS 7. Leverage public sector procurement to accelerate the absorption of innovation into the healthcare system while supporting the development of local firms. Ontario can pioneer a reimbursement model that accelerates reimbursement and market adoption while linking payment levels more closely to measureable health outcomes. Supporting procurement reform would not only ensure that Ontario patients are benefiting from Ontario discoveries but also attract health innovations from other jurisdictions. Innovative procurement can be championed through partnerships with Ontario s Chief Health Innovation Strategist and through education and training sessions with and for hospital executives. 70

74 8. Create a Research Centre focused on Business Model Innovation. Along with development of innovating procurement, business model innovation can encourage small businesses to engage in research that has the potential for commercialization. A research centre could develop pressure-tested business models for buying/financing innovative technology. 9. Prepare the Toronto region to utilize healthcare data to drive better health outcomes and greater economic benefits. We need to commit to turning Ontario into Canada s leader in compiling,analyzing and leveraging the power of big data for health at a time when, as one HHS leader put it, Ontario is considerably lagging other provinces in its adoption of genetic testing as part of the overall care stream. The sector needs programs to provide a structure for investment in electronic medical records, patient databases and big data analytics that are inclusive, expansive, integrated and both accessible and affordable to industry. Toronto has a large and diverse population that can be used as a unique asset, an asset that could be used not only to optimize health care decisions in Ontario but also as a platform for building global products leveraging the Toronto region s strengths in deep learning/machine learning and in mobile applications in health sciences. GROWING FUNDING AND INVESTMENT 10. Create an investor incubator program. This program would create a space and programming to support investors who are located in Toronto or coming through the region. It would provide a platform for identifying opportunities and creating connections among investors and between investors and companies. 11. Create targeted tax credits focused on the Development side of the R&D continuum. Tax policy needs to focus on creating a balanced and competitive tax environment across the entire innovation value chain, from initial R&D through commercialization to the development and production of new products and services. Expand the scope of R&D credits to later stage development activities. These could take multiple forms, including collaborative tax credits, flow-through shares, or tax credits to de-risk VC investment 71

75 12. Create a government-led venture fund specifically focused on Health Sciences. Similar to the Automotive Innovation Fund and the aerospace initiative, this fund would recognize the various stages and sizes at which companies require investment from research to adoption and be designed to take into account the long lifecycles of many HHS commercialization projects. An initial investment of public funds and selecting experienced and knowledgeable investors with deep sector experience would attract private investment well beyond the initial government contribution. 13. Better integrate and streamline strategy and spending between MOHLTC, MRIS and MEDG. Better coordination and integration of programs across several ministries and multiple divisions would help companies and collaborators navigate the system. Although the creation of the OCHIS has helped to break down traditional ministerial silos, building even stronger ties between the three ministries listed above would help Ontario make a compelling and integrated case for increased foreign direct investment in the HHS sector. 14. Better leverage the local presence of MNEs by supporting industry-led R&D hubs. The Canadian offices of multinational enterprises are always looking to attract a disproportionate share of the investment funds being allocated from their global headquarters. The Government of Ontario should create a streamlined process that helps companies secure the matching funds often required to unlock net new international investment or expanded global research mandates. Small amounts of initial funding raise the likelihood of follow-on investments at a much larger scale. Witness Janssen, which first supported the NeuroScience Catalyst Program at the University of Toronto, before deciding to create JLABS@Toronto. 15. Create structure and regulation to allow charitable foundations to invest in companies. By allowing charitable foundations, especially those that have a specific disease focus, to invest in companies, foundations can contribute to an expanding pool of available capital. These investments are already common practice in the US. However, in order for charitable foundations to make these investments, there would need to be changes to the Canada Revenue Agency regulations. 72

76 APPENDIX #5: ROUNDTABLE ATTENDEES OCT. 4TH ROUNDTABLE ATTENDEES NAME ORGANIZATION TITLE Akin Alaga MEDG Director Sector Strategy Andrea Mulder Mississauga Life Sciences Lead Dana Haddad MEDG Senior Program Advisor Don Simmonds Faydon Enterprises Ltd Chairman and CEO Dvorah Richler Roche Senior Manager, Government Relations and Health Care Policy Eileen McMahon Torys Partner Elaine Campbell IMC Interim CEO Farzian Aminuddin OBIO Manager, Capital Access Advisory Program Judy Blumstock MaRS Senior Director, Strategic Planning Karen Michell CAHO Executive Director Katherine Lal Johnson and Johnson Manager, Government Affairs and Health Policy Kathy Nicolay Leaders Circle/MTCC Leaders Circle Manager Mark Kohler Exelerate Capital Managing Director Nancy Johnston Brampton Business Development Coordinator Ricky Chan OBI Industry Relations Rosemary Hannam Rotman Senior Research Associate Ryan Lock GSK Manager, External Affairs Sasha Lisovsky KPMG Senior Consultant Scott Kaplanis Epic Capital Partner and Portfolio Manager Sharon Vanin TAHSN Manager Suzanne Drisdrelle Global Affairs Canada Trade Commissioner Todd Leach CTO Public Relations and Communications Vivek Goel University of Toronto Vice President Research and Innovation Zayna Khayat MaRS Senior Advisor 73

77 OCT. 5TH ROUNDTABLE ATTENDEES NAME ORGANIZATION TITLE Andrew Guy MEDEI Manager Akin Alaga MEDG Director Sector Strategy Cassandra Baccardax Brampton Senior Advisor International Investment Chris Carson Lifelabs Vice President, Partner Relations and Transformation Chelsa Gryglewicz Invest Toronto Investment Services Derek Newton U. of Toronto Assistant Vice-President, Innovation, Partnerships Ian Stewart CCAB Vice President, Business Development Jason Field LSO President and CEO Jennifer Robinson U. of Toronto Executive Director, Communications Partnerships John Preece City of Toronto Sector Development Officer, Life Sciences Lisa Boreanaz OCHIS Policy Lead, Industry Melicent Lavers -Sailly Medtronic Communications & PR Dept. Manager Niloo Boroun Ontario Senior Policy Advisor Norm Berberich EMD Serono Director, Market Access & Government Relations Natasha Apollonova TRBOT Senior Manager of Policy Randee Pavalow TOHealth! Risk Capital Working Group Sarah Shephard Novartis Director, Health Policy Sriram Raman Brampton Policy Advisor Stephen Zrudlo BioTalent Canada Leader in Operations & Sales Management Weiru Shi MEDG Senior Sector Policy Advisor 74

78 APPENDIX 6: TO HEALTH! FOLLOW UP SURVEY RESULTS ABOUT THE RESPONDENTS 22 respondents chose to identify themselves, 8 remained anonymous Name Sean Holt Gail Garland Rosemary Hannam Elaine Campbell Sharon Vanin Garth Smith Jon Feairs Shanna Brisebois Sarah Shephard Ryan Lock Scott Kaplanis Andrew Haller Katherine Lal Sue Paish Frank Florio Ainslie Little Randee Pavalow Andrea Mulder Ian Stewart Kathy Nicolay John Preece Karen Michell Organization Impact Angel Alliance OBIO Rotman School of Management Innovative Medicines Canada Toronto Academic Health Science Network OBI AstraZeneca Canada Novartis Novartis Pharma Canada Inc GSK Epic Capital Management TOHealth! Janssen Inc. LifeLabs Torys LLP City of Mississauga - EDO CCAB Leaders Circle/MTCC City of Toronto CAHO 2/3 of respondents had attended one of the Roundtable sessions. 75

79 IMPACT AND FEASIBILITY Respondents were asked to rank each idea either 1 (low), 2 (medium), or 3 (high) on its potential impact and on its feasibility. The graph below represents the average ratings. 76

80 INITIATIVES THAT OTHER ORGANIZATIONS ARE ALREADY WORKING ON: 1. Develop a detailed, integrated cluster inventory that includes an asset map of organizations in the cluster and programs and opportunities across the entire commercialization pathway. Sharon Vanin, Toronto Academic Health Sciences Network Garth Smith, Ontario Brain Institute Andrew Haller, TOHealth! Andrea Mulder, City of Mississauga Ian Stewart, CCAB John Preece, City of Toronto 2 anonymous 2. Host high profile conferences in the Toronto region, including hosting a recurring Health Sciences conference and attracting existing major conferences. Garth Smith, Ontario Brain Institute Scott Kaplanis, Epic Capital Management Andrew Haller, TOHealth! Andrea Mulder, City of Mississauga Ian Stewart, CCAB Kathy Nicolay, Leaders Circle/MTCC 1 anonymous 3. Create a full-time program for foreign engagement and partnership building for the region, including offering a tour guide program and creating a turnkey sales package. Garth Smith, Ontario Brain Institute Scott Kaplanis, Epic Capital Management Andrew Haller, TOHealth! Andrea Mulder, City of Mississauga Ian Stewart, CCAB John Preece, City of Toronto 1 anonymous 4. Create programs to identify and attract experienced international employees and Canadian expats. 5. Expand wage subsidy programs. 6. Create targeted programs that help emerging companies access executives with specialized skills. 7. Leverage public sector procurement to accelerate the absorption of innovation into the healthcare system while supporting the development of local firms. Andrea Mulder, City of Mississauga Gail Garland, OBIO Garth Smith, Ontario Brain Institute Sean Holt, Impact Angel Alliance Gail Garland, OBIO Garth Smith, Ontario Brain Institute Andrea Mulder, City of Mississauga 1 anonymous Jon Feairs, AstraZeneca Canada Ryan Lock, GSK Andrea Mulder, City of Mississauga Karen Michell, CAHO 77

81 8. Create a Research Centre focused on Business Model Innovation. Andrea Mulder, City of Mississauga Ian Stewart, CCAB 9. Prepare the Toronto region to utilize healthcare data to drive better health outcomes and greater economic benefits. 10. Create an investor incubator program. Sean Holt, Impact Angel Alliance Sharon Vanin, Toronto Academic Health Sciences Network Garth Smith, Ontario Brain Institute Sue Paish, LifeLabs Karen Michell, CAHO 2 anonymous Sean Holt, Impact Angel Alliance Garth Smith, Ontario Brain Institute Andrea Mulder, City of Mississauga 11. Create targeted tax credits focused on the Development side of the R&D continuum. 12. Create a government-led venture fund specifically focused on Health Sciences. 13. Better integrate and streamline strategy and spending between MOHLTC, MRIS and MEDG. 14. Better leverage the local presence of MNEs by supporting industry-led R&D hubs. Gail Garland, OBIO Andrea Mulder, City of Mississauga Gail Garland, OBIO Andrea Mulder, City of Mississauga Garth Smith, Ontario Brain Institute Jon Feairs, AstraZeneca Canada Katherine Lal, Janssen Inc. Sue Paish, LifeLabs Karen Michell, CAHO Garth Smith, Ontario Brain Institute Katherine Lal, Janssen Inc. Andrea Mulder, City of Mississauga 1 anonymous 15. Create structure and regulation to allow charitable foundations to invest in companies. Sean Holt, Impact Angel Alliance Garth Smith, Ontario Brain Institute 78

82 THESE ARE THE INITIATIVES THAT PEOPLE WOULD PERSONALLY BE INTERESTED IN WORKING ON ACHIEVING: 1. Develop a detailed, integrated cluster inventory that includes an asset map of organizations in the cluster and programs and opportunities across the entire commercialization pathway. Sean Holt, Impact Angel Alliance Elaine Campbell, Innovative Medicines Canada Sharon Vanin, Toronto Academic Health Sciences Network Garth Smith, Ontario Brain Institute Sarah Shephard, Novartis Pharma Canada Ryan Lock, GSK Andrew Haller, TOHealth! Ainslie Little, Torys LLP Randee Pavalow Kathy Nicolay, Leaders Circle/MTCC John Preece, City of Toronto Karen Michell, CAHO 3 anonymous 2. Host high profile conferences in the Toronto region, including hosting a recurring Health Sciences conference and attracting existing major conferences. Sharon Vanin, Toronto Academic Health Sciences Network Jon Feairs, AstraZeneca Canada Shanna Brisebois, Novartis Sarah Shephard, Novartis Pharma Canada Scott Kaplanis, Epic Capital Management Andrew Haller, TOHealth! Frank Florio Ainslie Little, Torys LLP Kathy Nicolay, Leaders Circle/MTCC John Preece, City of Toronto 1 anonymous 3. Create a full-time program for foreign engagement and partnership building for the region, including offering a tour guide program and creating a turnkey sales package. Garth Smith, Ontario Brain Institute Shanna Brisebois, Novartis Scott Kaplanis, Epic Capital Management Andrew Haller, TOHealth! John Preece, City of Toronto 3 anonymous 79

83 4. Create programs to identify and attract experienced international employees and Canadian expats. Sarah Shephard, Novartis Pharma Canada Frank Florio Ainslie Little, Torys LLP 5. Expand wage subsidy programs. 6. Create targeted programs that help emerging companies access executives with specialized skills. Gail Garland, OBIO Gail Garland, OBIO Elaine Campbell, Innovative Medicines Canada Garth Smith, Ontario Brain Institute Frank Florio 7. Leverage public sector procurement to accelerate the absorption of innovation into the healthcare system while supporting the development of local firms. Gail Garland, OBIO Rosemary Hannam, Rotman School of Management Elaine Campbell, Innovative Medicines Canada Jon Feairs, AstraZeneca Canada Ryan Lock, GSK Andrew Haller, TOHealth! Sue Paish, LifeLabs Randee Pavalow John Preece, City of Toronto Karen Michell, CAHO 8. Create a Research Centre focused on Business Model Innovation. 9. Prepare the Toronto region to utilize healthcare data to drive better health outcomes and greater economic benefits. Sean Holt, Impact Angel Alliance Gail Garland, OBIO Elaine Campbell, Innovative Medicines Canada Sharon Vanin, Toronto Academic Health Sciences Network Garth Smith, Ontario Brain Institute Ryan Lock, GSK Frank Florio Karen Michell, CAHO 1 anonymous 80

84 10. Create an investor incubator program. 11. Create targeted tax credits focused on the Development side of the R&D continuum. Sean Holt, Impact Angel Alliance Garth Smith, Ontario Brain Institute Shanna Brisebois, Novartis Scott Kaplanis, Epic Capital Management Frank Florio Ainslie Little, Torys LLP Randee Pavalow 1 anonymous Gail Garland, OBIO Garth Smith, Ontario Brain Institute Ryan Lock, GSK Scott Kaplanis, Epic Capital Management 12. Create a government-led venture fund specifically focused on Health Sciences. Gail Garland, OBIO Garth Smith, Ontario Brain Institute Ryan Lock, GSK Scott Kaplanis, Epic Capital Management Andrew Haller, TOHealth! John Preece, City of Toronto Karen Michell, CAHO 2 anonymous 13. Better integrate and streamline strategy and spending between MOHLTC, MRIS and MEDG. 14. Better leverage the local presence of MNEs by supporting industry-led R&D hubs. Rosemary Hannam, Rotman School of Management Garth Smith, Ontario Brain Institute Jon Feairs, AstraZeneca Canada Shanna Brisebois, Novartis Ryan Lock, GSK Katherine Lal, Janssen Inc. Sue Paish, LifeLabs Randee Pavalow John Preece, City of Toronto Karen Michell, CAHO Garth Smith, Ontario Brain Institute Andrew Haller, TOHealth! Katherine Lal, Janssen Inc. John Preece, City of Toronto 15. Create structure and regulation to allow charitable foundations to invest in companies. Sean Holt, Impact Angel Alliance Garth Smith, Ontario Brain Institute Randee Pavalow 81

85 OTHER FEEDBACK: TO Health has identified a number of good marketing ideas to promote the region. OBIO is happy to support TO Health s marketing efforts. Gail Garland, OBIO We at Rotman are very interested in the education component of any of these activities. Please keep us in mind for that. And, to echo the words of my colleague, professor Will Mitchell, we need to be sure we are continually developing knowledge about the demand side (who will be buying?), both locally and globally. Rosemary Hannam, Rotman School of Management I liked the idea of profiling our members to one another through occasional s, company profiles, spot light on a company at our events and show how the greater community is helping this entity grow. Sarah Shephard, Novartis Pharma Canada Inc I don t understand the ecosystem well enough to answer these questions as accurately as I would have liked; did my best! Anonymous These questions again fail COMPLETELY to even address the private sector Venture Capital community and its impact on successful commercialization. A missed opportunity (again). Scott Kaplanis I am very sorry that I missed the round tables. There is a long list here. I think if we are going to deliver something meaningful we need to be ruthlessly focused and targeted: ie no more than 2 or 3 (max)? Sue Paish, LifeLabs All 15 topics are worthy, but I m unclear how TO Health could make a tangible actionable contribution of many of them (e.g. changes in various gov t programs). That s likely why I rated the marketing and attracting talent sections more favourably - I think TO Health is better positioned to achieve deliverables in those spaces. Ainslie Little, Torys LLP 82

86 CONTACT ELLA KORETS-SMITH Executive Director, TO Health!