COVID catalyst: Inside Ottawa’s life science firms’ war against the virus


This article originally appeared in The Ottawa Citizen by James Bagnall.

When Ontario declared a COVID-19 health emergency last spring, the first instinct of Ottawa entrepreneur Peter O’Blenis was to preserve cash.

“We basically stopped our discretionary spending,” said O’Blenis, the co-founder and CEO of Evidence Partners, which makes software for accelerating the review of scientific and medical literature, using artificial intelligence. “We cut investments in things meant to help us grow.”

It was a defensive posture born of experience. O’Blenis had 12 years earlier nearly been crushed by the global financial crisis. Another looked to be on the way.

In 2008, O’Blenis and his colleagues, Jonathan Barker and Ian Stefanison, hit a brick wall with their first venture, TrialStat, which helped hospitals manage patients’ electronic data. While TrialStat had secured $5.5 million in venture financing just a couple of years earlier, the founders had burned through most of it during a rapid expansion. When the financial world collapsed, so did their firm.

The trio played things far more conservatively with Evidence Partners, which has relied almost exclusively on customer revenues to finance expansion.

The caution proved unnecessary. Like so many other businesses, O’Blenis underestimated the government’s willingness to keep the economy afloat with easy money. Nor did he anticipate that COVID-19 would prove a significant catalyst for the firm’s revenues so soon.

Evidence Partners is hardly the only local firm with technology particularly suited for the war against COVID-19. Spartan Bioscience and DNA Genotek adapted existing products to create technology for identifying the SARS-CoV-2 virus that causes COVID-19. Ottawa-based units of Abbott Laboratories and Siemens Healthineers make portable blood analyzers that diagnose patients afflicted by the virus.

Imants Lauks — who founded the firms that underpin local operations at Abbott and Siemens — is organizing his third startup, Questat. He’s not saying much about it yet, other than to note it’s devoted to building a new generation of point-of-care technology.

It’s a fascinating moment for Ottawa’s diminutive, export-driven life sciences industry, which has long languished in the shadow of the city’s other technology stars in telecom and enterprise software. As horrific as the virus has proved to be, it has instilled fresh energy in those equipped to engage it.

Evidence Partners specializes in software — dubbed DistillerSR — for searching and assigning priorities to published medical studies. Its customers, which include the globe’s largest pharmaceutical and medical device firms, must bring government regulators up to speed about the current state of research when seeking approval for drug candidates or new medical technologies. DistillerSR allows them to do this more quickly while conforming to regulatory standards, a key advantage in the case of literature related to COVID-19. At the peak last year, more than 200 papers per day were being published on the subject of the virus.

When Evidence Partners last March opened its platform for anyone conducting COVID-19 research, organizations around the globe took it for a trial run. Many began to appreciate DistillerSR’s speed and power.

“This was free until the end of 2020,” O’Blenis said, “but now our existing customers are expanding their use of DistillerSR and new organizations are signing up.”

The result: Evidence Partners is generating sufficient new revenues to justify significant expansion. The company expects to double its staff to 100 by yearend. As recently as January 2019, its head count was just 34. Nearly 90 per cent of its revenues are generated outside Canada.

Spartan Bioscience, which makes a portable DNA analyzer, took a huge commercial risk last year when it converted its underlying technology into a lab-in-a-box for identifying COVID-19. Initial versions of the device did not pass muster with Health Canada because the swabs did not collect sufficient DNA samples. Spartan resolved the technical issues after more than seven months of re-engineering and has resumed shipments of its test kits to the federal government and the provinces. Revenue this year could approach $200 million, nearly all of it in Canada.

Spartan’s not the only local firm building mobile test kits. DNA Genotek obtained Health Canada approval in January for its saliva-based COVID-19 detection system. The company, a unit of Orasure Technologies of Bethlehem, Pa., was co-founded in 2002 by Dr. Chaim Birnboim, then a researcher with The Ottawa Hospital Research Institute. Birnboim came up with a way of collecting and preserving DNA from saliva at room temperature.

DNA Genotek last fall adapted its collection kits so these could be used to test for COVID-19 in people’s homes. Of course, these aren’t as accurate as those that rely on DNA samples from deep in the throat. Nevertheless, tests at The Ottawa Hospital’s COVID-19 assessment centre at Brewer Park suggested saliva-based kits turned up positive results often enough to make them useful.

The links within Ottawa’s life sciences sector are tight. For instance, LD Tool & Die — a major subcontractor for Spartan Bioscience — was one of the early investors in DNA Genotek.

Evidence Partners earlier this week announced it had hired Katy McFee as its top sales executive. McFee spent nearly a decade at Spartan earlier in her career.

Less well known in the corporate fight against COVID-19 are the contributions being made by Abbott Laboratories and Siemens Healthineers.

The two firms, which make portable devices that use different methods of analyzing blood gases such as oxygen and carbon dioxide, employ more than 1,000 combined in the Ottawa area. Blood gas testing is considered crucial for COVID-19 patients suffering respiratory distress. Not only does it help inform decisions about treatments, test results are available in a matter of minutes. Another bonus, samples do not have to move out of the quarantine area.

One notable aspect of Ottawa’s life sciences sector is that so many of its startups have been acquired by well-capitalized multinationals. It’s a reflection of just how much money is required to keep technology at the leading edge in this demanding industry, and of the advantages that accrue to corporations with worldwide distribution. Economies of scale are important.

Governments and customers are at the moment willing to spend a fortune on fighting COVID-19. The same may not be true this time next year. Fortunately, Evidence Partners and Spartan Bioscience have created technology platforms that can be adapted for new uses. Whether that’s enough to build standalone businesses with staying power is unclear. For now, it means they have enough new business to at least try. 

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