This article was originally published in Life Sciences Magazine. Read the full digital edition here.
Dr. Allen Eaves’s commitment has always been deeply rooted in researching better solutions for people’s health, especially in the area of cancer. It is why he launched Stemcell Technologies 30 years ago – to have more money to fund his team’s research.
But back then, he probably didn’t expect it would grow into British Columbia’s largest biotechnology company. Stemcell celebrated its 30th anniversary earlier this year.
“My interest is in cancer research and of course, there’s never enough money to do all the research that you want to do, so we started selling some of our products that were some of the reagents that we used in our research,” Eaves recalls.
“And they were to grow blood-forming stem cells, which were critical to understanding how cells go wrong in leukemia. So we started selling this tissue culture media and started to make some money and we’ve just kept going.”
After being encouraged by other team members, Eaves, who was the co-founder and director of the Terry Fox Laboratory for Hematology and Oncology Research, mortgaged his house and took a government loan, and founded Stemcell in 1993.
Today, the company has around 2,300 employees and is the global standard for growing blood-forming stem cells. It sells more than 2,500 other products including specialized media, growth factor monoclonal antibodies, cell separation reagents, instruments, plastic ware and contract assay services.
Stemcell, as a privately held company, has averaged 20 per cent annual growth since its inception, and has managed to put its profits back into research, facilities and sustainability initiatives, according to Eaves.
“We have a very clear mandate, which is to make products to support cancer and other researchers to do their jobs better.… I don’t want to make money, I want to make these really good products,” he says.
“These products help people do their research in their labs. We’re not going after some big therapeutic cure that’s going to cure some disease. We’re providing the tools for the infrastructure of the health-care industry.”
In addition to a very clear mandate that has guided the company from the beginning, Eaves also attributes his business success to having no investors, because some investors have short attention spans, and may pressure companies to generate results without having the time to set up a “serious company.”
“Just be patient. It takes a long time to get a company going,” Eaves says, adding that it’s important for a company to start with a profitable product at first so it can make profits, and reinvest them to support the growth of the company.
“Stemcell rose from its resources, from its profits – all its profits are put back into the company to grow it. That makes us very successful over the long term, it just takes longer than throwing a whole lot of money at a company for a short period of time, where only one in 10 is successful. I mean, it’s highly wasteful.
“We are very careful, risk adverse, we just want to take our time to do everything right. It’s all about the quality of our products.”
Balancing profits and long-term goals
Stemcell’s model, which has proven very successful for the company, is not necessarily applicable to all life sciences ventures. Not every company is able to make profits at an early stage, or invest their profits in the company’s growth, says Gordon McCauley, CEO of adMare BioInnovations, a Vancouver-based organization that specializes in raising capital to help build strong life sciences companies.
“Allen is a unicorn. He is somebody who has been able to figure out how to grow our business that way, very methodically over the course of 30 years and do that without investment. I’m not sure that translates to the rest of the industry,” says McCauley.
“I don’t think you can do traditional drug development, which demands something like a billion and a half and two billion [dollars] without reining in external investment.”
But he says it is important for businesses to stay focused on their goal and not let external factors get in the way.
“I think the focus is understanding what your purpose is, what your mission is and being focused on it,” says McCauley, adding that there are biotech companies that have raised billions of dollars of capital and have been very focused on what they are doing.
“We all have pressures in our lives from external forces all the time. It’s understanding what’s the internal driver that’s causing you to focus and being able to deliver results, so you can say, ‘Okay, I understand that, but look at the results we’re generating here. That’s why we’re going to continue to do that.’”
He adds there are three key factors adMare BioInnovations looks at while deciding whether to invest in a company.
“The first is the willingness of the scientists to be engaged in the commercial activity. Second, if the science is really innovative. Thirdly, is the commercial potential of that science.”
Funding and good leadership boost businesses
Government funding can be a boost to a life sciences business, especially if it’s made available at the right time, according to Norma Biln, CEO of Augurex Life Sciences Corp., a Vancouver-based biotech company focused on research around the 14-3-3η protein, a novel biomarker involved in the joint damage process.
Earlier this year, the company, along with nine other local firms, received a total of $25.7 million in funding through the Government of Canada’s Pacific Economic Development Canada (PacifiCan) initiative to help them commercialize new technology, grow their operations and reach new global markets.
“We’re actually in the process of applying to one of the larger grants, also with PacifiCan, and it’s a really good source of non-diluted funding for companies as we scale,” said Biln.
“And the whole core concept there is that if you’re able to fuel the growth of companies, when they’re at a very specific point in terms of their growth trajectory, you can really help accelerate that by fueling it with enough capital, with the right plan and the right people.”
She added that for companies like Augurex that are going through a transition from the startup and pre-clinical phase to having products in the clinic, and moving from having one product to becoming a multi-product company, funding like this is critical to scaling up and accelerating growth.
However, she points out that although the current support and funding available in B.C. from both the public and private sectors are good at helping companies survive in their very early stages, it is not great at helping them thrive once they pass that stage.
“Because we don’t have a lot of venture capital in Canada. If we’re going to go to the U.S., we need to really expand our thinking in terms of the size of the funding that we want to get.… We have a very scarcity mindset instead of an abundance mindset.”
She said being “innovators” plays an essential role in Augurex’s success not only in the technology, but also in how to conduct business, go to market and address unmet needs.
“Whether it’s through our promotional material, the social media routes that we use, even with our contract, research organizations, or contract manufacturing organizations that we work with, we’re very innovative in terms of shortening the product manufacturing lifecycle and introducing new processes into our approach so that we can expedite anything that we’re doing,” says Biln.
“One of the really important things is that as CEOs we continue to learn how to run a company, not just how to start a company. We also have to think bigger, to not have a scarcity mindset. That’s what differentiates a lot of successful companies in Canada versus the ones that are less successful, but it also is was what differentiates Canada as a whole from the United States’ ventures.
“And the truth is, a lot of things die, even though they’re well-funded, but if you really have a great technology, and it’s properly funded, it’s more likely to succeed. So I think that’s a really critical thing as far as something bigger for us.”
This article was originally published in Life Sciences Magazine. Read the full digital edition here.
