Welcome to Biotechnology Focus Podcast. I’m your host Shawn Lawrence.

We kick things off this week with the release of our latest issue of Biotechnology Focus and as such we thought we should give you our listeners a rundown or sneak peak of all the stories you’d see. As most or our listeners know, there are comprehensive changes to the way the Federal Government supports science and innovation in Canada coming with consultations on Canada’s Innovation Agenda drawing to a close and this issue reaches your desk with this Call to Action in mind, beginning with our cover story on the results from our latest Hot Button Issue Survey. The survey was open to everyone in both the private and public sectors and at all organizational levels, from the c-level right on down. In all, 163 of you got back to us with what you’d like to see from the Innovation Agenda. Under the microscope for many of you was one of the biggest sources of government cash for private sector research and innovation in Canada, the Scientific Research and Experimental Development program or SR&ED’s as they are more commonly known. It was interesting to see how many of you rely on this program, and why many of you feel this program needs not only to be maintained but expanded upon. Be sure to check out this and what other priorities were included in our special report. And for further reading on the SR&ED program, Elizabeth Pringle, the National Life Sciences Industry Lead for Ernst & Young LLP’s Business Tax Incentives Practices, discusses recent changes to the program itself while suggesting more alternatives to strengthening the overall tax credit regime for life science companies in Canada, including looking south of the border for some inspiration. Moreover, she highlights some of the recent CRA programs added to help increase tax claim certainty and reduce the administrative burden of applying for SR&EDs including the Pre-Claim Consultation program which launched on June 29 and the Pre-Claim Review (PCR) pilot project which launched August 2. In addition to underlining your priorities that you’d like to get before

As most or our listeners know, there are comprehensive changes to the way the Federal Government supports science and innovation in Canada coming with consultations on Canada’s Innovation Agenda drawing to a close and this issue reaches your desk with this Call to Action in mind, beginning with our cover story on the results from our latest Hot Button Issue Survey. The survey was open to everyone in both the private and public sectors and at all organizational levels, from the c-level right on down. In all, 163 of you got back to us with what you’d like to see from the Innovation Agenda. Under the microscope for many of you was one of the biggest sources of government cash for private sector research and innovation in Canada, the Scientific Research and Experimental Development program or SR&ED’s as they are more commonly known. It was interesting to see how many of you rely on this program, and why many of you feel this program needs not only to be maintained but expanded upon. Be sure to check out this and what other priorities were included in our special report. And for further reading on the SR&ED program, Elizabeth Pringle, the National Life Sciences Industry Lead for Ernst & Young LLP’s Business Tax Incentives Practices, discusses recent changes to the program itself while suggesting more alternatives to strengthening the overall tax credit regime for life science companies in Canada, including looking south of the border for some inspiration. Moreover, she highlights some of the recent CRA programs added to help increase tax claim certainty and reduce the administrative burden of applying for SR&EDs including the Pre-Claim Consultation program which launched on June 29 and the Pre-Claim Review (PCR) pilot project which launched August 2. In addition to underlining your priorities that you’d like to get before government, this issue also spotlights what makes Canadian biotech great, and highlights some of the areas we can become stronger. It starts with Wayne Schnarr’s roundup piece, “Looking for success stories in Canadian Healthcare.” As he explains, measuring success in Canada’s health technology sector is no easy task, and varies depending on one’s perspective. His article looks at the Canadian biotech landscape from the viewpoint of an investor and reminds us that they judge successful companies differently than government, economic development offices and the companies themselves. With the investors wish list in mind, he highlights some Canadian companies to keep an eye on, including one who is featured later in this podcast Cynapsus.

Unfortunately, investors may have missed the boat on that company, but we’ll get to that later.

Next in our editorial lineup TO Health’s Ella Korets-Smith, Montreal In Vivo’s Frank Beraud and Teralys Capital’s Cedric Bisson cowritten piece “Canada Poised to be best in the World in Life Sciences Sector” recognizes Canada as a world class biotech hub whose greatest strength is working together to promote our successes in this arena. However, they add that there is still room to grow, and we must begin by looking to other jurisdictions for best practices especially in areas such as venture capital investment.

Next, Zymeworks lead man Ali Tehrani, no stranger to success, and perhaps the type of entrepreneur we need to hear more ideas from on how to improve the industry, asks the question why isn’t Canadian biotech with all its great science, visionary entrepreneurs and angel investors, ranked among the best in the world. In addition to posing the question, he endevors to answer it, offering three near and long-term solutions. We have all this and more packed into this issue, so be sure to sign up for our digital edition service to see this issue and past issues as well.

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Our first news story this week is a science story, and features a breast cancer research breakthrough. Specifically, a team of researchers in Canada have discovered that mutations found outside of genes that accumulate in estrogen receptor positive breast tumours throughout their development act as the dominant culprits that drive the disease.

The multi-institutional research team collaborated with the Princess Margaret Genomics Centre and Bioinformatics group to analyze changes in the DNA sequence that accumulate in patients’ tumours with respect to the epigenetic identity of estrogen receptor-positive breast cancer cells..

The research, published online in Nature Genetics, focuses on the most common type of breast cancer, estrogen receptor positive, and was led by principal investigator Dr. Mathieu Lupien, senior scientist, Princess Margaret Cancer Centre, University Health Network and associate professor in the Department of Medical Biophysics, University of Toronto. His team investigated acquired mutations found outside of genes through the power of epigenetics, and identified that functional regulatory components can be altered to impact the expression of genes to promote breast cancer development.

Dr. Lupien discusses the study in the following audio provided by UHN Toronto

Dr.Lupien’s research builds on a previous study that identified why 44 known genetic variations increased breast cancer risk (Nature Genetics, Sept. 23, 2012). He adds that the convergence of more knowledge about inherited risk variants and the role of acquired mutations should readily enable translating the science into more precise clinical tests to diagnose and monitor patients.

His work was funded by The National Cancer Institute at the National Institute of Health, The Princess Margaret Cancer Foundation, Canadian Cancer Society, Susan G. Komen Foundation, the Ontario Institute for Cancer Research, the Canadian Institute of Health Research and a

Movember Rising Star award from Prostate Cancer Canada.

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Enerkem Inc., a Canadian headquartered waste-to- biofuels and chemicals producer, has obtained certification from the International Sustainability and Carbon Certification (ISCC) system and will now be able to begin biomethanol production at its Biofuels full-scale facility in Edmonton,AB. According to the company the third-party certification confirms that Enerkem meets high ecological and social sustainability requirements. Enerkem makes biofuels and renewable chemicals from non-recyclable municipal solid waste. The company owns a full-scale commercial facility in Alberta as well as a demonstration plant and a pilot facility in Quebec.

The company is also developing additional biorefineries in North America and globally, based on its modular manufacturing approach. With the certification, the Edmonton biorefinery is now the first ISCC certified plant in the world to convert municipal solid waste into biomethanol.

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In business news, Laval’s ProMetic Life Sciences has entered into a binding agreement to acquire Belleville, Ontario’s Telesta Therapeutics in an all share transaction. By way of a plan of arrangement under the Canada Business Corporations Act, ProMetic will acquire all of the share capital of Telesta at a share price of $0.14 payable in ProMetic common shares. The number of common shares to be issued by ProMetic will be based on the volume-weighted average closing price (VWAP) of ProMetic’s common shares for the five (5) trading days prior to the closing date of the acquisition. According to ProMetic, the deal gives the company the opportunity for further integration of its manufacturing capabilities and longer term capacity expansion in a 150,000 sq. ft. facility in Belleville, ON. At the same time it gives  ProMetic  a significant foothold in Ontario, consolidating its presence as a major player in the Canadian market. Completion of the deal is subject to the approval of Telesta’s shareholders and a number of customary closing conditions including court and regulatory approvals (such as the approval of the Toronto Stock Exchange). The acquisition is expected to close in early November, 2016.

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Rapid infectious disease test developer bioLytical Laboratories has filed two patent applications with the U.S. Patent and Trademark Office relating to its multiple colour rapid detection assay systems for the detection of antibodies to pathogens including Zika and other flaviviruses. The two new patent applications are based on the company’s INSTI platform and describe methods and kits allowing either simultaneous or sequential detection of different antibody classes to multiple pathogens using a single sample of blood or blood product. The first patent application describes a method for detecting active or past infection using Zika as an example. The second patent application describes a method for differentiating early from later stages of infection.

According to the company, these technology breakthroughs could revolutionize point-of- care rapid assays for detection of acute infections including Zika. The Flaviviridae family has become a major concern in many areas of South America and more recently in the continental U.S.  As of early February 2016, the Brazil Ministry of Health has estimated that 500,000 to 1,500,000 cases of Zika virus disease have occurred since the beginning of the outbreak. The company says that with the high degree of cross-reactivity within the flaviviridae family, a diagnostic assay that can rapidly detect and differentiate between them, and determine new vs old infection, is of upmost importance.

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Our final, and perhaps biggest story this week is a Canadian biotech business news story with Marlbourough, MA based-Sunovion Pharmaceuticals announcing that it is buying Toronto’s Cynapsus Therapeutics Inc. for approximately CDN$820 million. The transaction is the biggest the industry has seen in awhile for sure and has already received unanimous approval by the board of directors of both companies and The acquisition will be funded with cash on hand and is expected to close in the fourth quarter of 2016 (third quarter of Sunovion’s fiscal year). Pursuant to the terms of the agreement, and upon closing of the proposed transaction, shareholders of Cynapsus will receive US$40.50 per common share in cash, and holders of warrants and stock options will receive a cash payment equal to the difference between US$40.50 and the exercise price of such warrant or stock option. The offer of US$40.50 per common share in cash represents a premium of 123 per cent based on the volume weighted average closing price of Cynapsus’ common shares on the NASDAQ Global Market for the last twenty trading days. As part of the acquisition, Sunovion is getting Cynapsus’ lead product candidate, APL-130277, a sublingual thin film formulation of apomorphine designed to be an easy-to- use on-demand treatment option for managing OFF episodes associated with Parkinson’s disease (PD), a chronic, progressive neurodegenerative disease that affects more than four million worldwide. One of the biggest benefits of the sublingual thin film delivery of apomorphine is that avoids the normal gastrointestinal route of delivery used by most PD medications. Prior to the deal, Cynapsus had just announced that the Phase 3 clinical program for APL-130277 was nearing completion and that the company had plans to submit a new drug application (NDA) to the FDA in the first half of 2017.Nobuhiko Tamura, chairman and CEO, Sunovion said that his company sees APL-130277 as a novel late-stage candidate with the potential to make a real difference for patients and their families. He adds that Sunovian has high regard for the Cynapsus team led by Anthony Giovinazzo, president and CEO of Cynapsus and the work they have done with the APL-130277 program. For Cynapsus, the deal culminates years of dedicated work, and Anthony J. Giovinazzo, president and CEO, Cynapsus believes Sunovian is the ideal company to take APL-130277 forward. values Cynapsus at approximately CDN$820 million. The transaction will be completed by way of a plan of arrangement under the Canada Business

Corporations Act. The arrangement will require approval of at least two-thirds of the votes cast by Cynapsus shareholders and warrantholders voting together as a single class at a special meeting of such securityholders of Cynapsus. This meeting will be held in October.

With that we’ve come to the end of this week’s program. We hope you enjoyed it. A big thanks to our production manager Laskey Hart and the rest of the Biotechnology Focus team. You can find past episodes online at www.biotechnologyfocus.ca and we’re always looking for your feedback, story

ideas and suggestions so we’d love to hear from you. Simply reach out to us on twitter:

@BiotechFocus or by email [email protected].